Libya’s central bank lends $2bn for emergency budget

Photo: Libya’s central bank lends $2bn for emergency budget / Arab World

Libya's central bank has made a 2.55 billion Libyan dinar ($2bn) emergency loan to keep the government running in the absence of a regular budget, a parliamentary spokesman said on Tuesday, Al Arabiya reported.

Parliament has so far failed to pass a budget for 2014 because the country's oil exports have fallen to a trickle due to a wave of protests at oil ports and fields since last summer. It agreed an emergency budget on Tuesday worth 2.5 billion dinars, which will be funded by the central bank loan.

Oil and gas exports are Libya's only source of budget revenue and funding for basic food imports.

Tripoli is struggling to end a blockade of three oil ports by rebels, one of many challenges facing the central government, which has failed to secure the North African country three years after the fall of Muammar Gaddafi.

Earlier this month, a rebel militia managed to load crude onto a tanker that was later returned by the U.S. navy to the Libyan government.

Analysts say the central bank has built up foreign currency reserves from times of high oil reserves, but there is no data on how much the bank holds.

Parliamentary spokesman Omar Hmeidan said 1.3 billion dinars of the loan would go to the defense and interior ministries, while 600 million dinars would cover basic services such as health, electricity and water.

More than half of government spending typically goes on public salaries and subsidies for bread, petrol or other basic services, items difficult to cut without fueling unrest.

Parliament also extended the mandate of Prime Minister Abdullah al-Thinni for another two weeks, Hmeidan said.

He was installed two weeks after lawmakers had fired his predecessor Ali Zeidan after rebels humiliated the government by loading crude onto the tanker, which fled from naval forces.

Diplomats doubt Thinni will make a big difference, given squabbling between the government and the transitional parliament that has paralyzed decision-making in the OPEC producer for months.

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