October 17, 2019 / 3:56 PM / a month ago

Libya estimates 2020 budget at less than $34 billion: GNA economy ministry

TRIPOLI (Reuters) - Libya’s 2020 budget is estimated at slightly less than 48 billion Libyan dinars ($34 billion), the U.N.-backed administration said on Thursday, a day after it sharply hiked kerosene prices as part of a reforms program.

In a statement to Reuters, the economy ministry said the budget, to be ready in December to take effect when the year starts, “will be balanced and there is no deficit or public debt”.

Imbalances will be addressed within the budget itself without borrowing, the ministry said. The budget for 2019, or “financial arrangement”, was $33.83 billion - agreed after months of wrangling.

In a written statement responding to Reuters questions, the ministry said an offensive on Tripoli by eastern Libyan forces has had “a significant and negative impact” on economic reforms since the fighting began in April.

The Libyan National Army (LNA) assault on Tripoli has stalled in the face of resistance from local armed groups aligned with the U.N.-recognized government there.

“It [the offensive] also delayed the implementation of the economic reforms program as it was expected to start reforming fuel subsidies by the end of April,” the ministry said.

The reforms program, agreed last year by the internationally recognized Government of National Accord (GNA), imposed a 183% fee on sales of hard currency, decreased to 163% in July.

It was also meant to reform fuel subsidies, starting in April, by replacing an in-kind subsidy with a cash payment. On Wednesday, it sharply raised the price of kerosene for commercial and industrial use - the first of those fuel subsidy reforms.

The impact of the assault had affected the prices of agricultural commodities and meat. But ports are operating normally and there are reserves sufficient for up to four months, it also said.

It added the 3,000 dinars reward for fighters, announced during the Muslim Eid holiday in August for fighting against the LNA, has not been implemented yet due to many “bureaucratic procedures”, and the spending on war is “unsteady and increases the longer the offensive continues”.

Since the fall of dictator Muammar Gaddafi’s regime in a 2011 NATO-backed uprising, oil-rich Libya has slid into chaos and has had no proper budget as rival administrations vie for power.

Reporting by Ahmed Elumami and Aidan Lewis in Tripoli; Writing by Ahmed Elumami; Editing by Yousef Saba and Sonya Hepinstall

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