Governor of Central Bank of Libya meets with House of Representatives in Consultative Session
The Governor of Central Bank of Libya (CBL), HE Mr Saddek Elkaber, has taken part in a consultative session with the House of Representatives in Tripoli to present an update on the state of the Libyan economy and respond to questions by parliamentarians.
The Governor opened the session with a presentation setting out the main challenges facing the Libyan economy and detailing the pivotal role played by the CBL providing essential economic and financial stability for the country.
He stressed that the CBL is an independent monetary authority that has distanced itself from political polarisation and rivalries, and manages and protects Libya's financial resources and assets for the benefit of all Libyans regardless of where they live.
Following the session CBL Governor HE Mr. Saddek Elkaber remarked that collaboration between all the major economic actors in Libya is necessary if long term financial sustainability is to be achieved. He added, "Members of the House of Representatives are working very hard to find solutions to the problems that Libya faces, and today's session was a valuable opportunity to brief them on the vital work that the CBL carries out in a quiet but committed manner. In this spirit I called on the President of the Presidential Council of the Government of National Accord to convene an urgent meeting to review the challenges facing us and work constructively to find solutions. As a top priority we must act as a united front to end the oil embargo that has caused significant damage to Libya's economy and foreign reserves".
The Governor highlighted the suspension of oil production and exports during the period 2013-2020 as the most significant factor facing the country's economy, which has resulted in losses of more than $180 billion USD. Oil revenues decreased from $53.2 billion USD in 2012 to $4.8 billion USD in 2016, and currently stand close to zero in 2020. He warned that should the embargo continue the result will be a catastrophic blow to the CBL's declining foreign reserves as well as the state's ability to cope with crises.
The CBL estimates that the oil embargo has caused the GDP to shrink by 55 percent. Direct revenue losses to the end of September 2020 amounted to $10 billion USD, and oil revenues for September 2020 were a mere $35 million USD, compared to $2 billion for September 2019.
The Governor talked of the CBL's plans for financial reform and role as the economic adviser of the State. He briefed the session that the Bank is preparing a comprehensive economic and financial reform program that addresses the structural imbalances and distortions in the national economy.
The measures taken, in line with international best practice, by the CBL to counter fraud and Anti-Money Laundering were presented. The CBL has developed cross-discipline expertise in the form of the reactivation and expansion of the National Anti-Money Laundering/Counter Financing of Terrorism Committee. It also adherences to the standards and recommendations set by Financial Action Task Force ("FATF"), the global money laundering and terrorist financing watchdog. In 2017, the Central Bank of Libya participated in a Technical Assistance Program together with the International Monetary Fund; and with assistance and support from the United States Treasury Department. With their input and advice, the Bank worked extensively to develop the Libyan Anti-Money Laundering ("AML") and Counter Financing of Terrorism ("CFT") regime in keeping with international standards, which included developing a framework for compliance, processes and procedures.
The House of Representative members asked what initiative has been made to resolve the issue of the parallel Central Bank. The Governor remarking that under his direction the legitimate CBL has aimed to resolve the situation since 2016. He stressed that the CBL has adhered to the Security Council's decision regarding international auditing of its operation and has begun cooperating with the international auditor. He welcomed the role of the Office of the Attorney General as supervisor, and reaffirmed the CBL's commitment to disclosing information requested by the auditor.
On the issue of Corona-virus, the Governor remarked that the CBL has issued all foreign exchange requests made by the Ministry of Finance for medical purposes, with a total of roughly 1 billion LYD by the close of September 2020, and for the Medial Supply Authority (on the basis of the Chapter 4 "subsidies" of the financial arrangement), with a total of 638 Million LYD. The CBL has also issued foreign currency exchange to the value of $489 USD for private sector import of medical equipment and medicine.
The Governor was joined by 12 members of the CBL executive management team, who also participated in the session and gave presentations on the Bank's operations.
The session concluded with a discussion of the accusations made against the CBL by the Minister of Finance and Economy, Mr. Faraj Boumatari. The Governor expressed his regret at Mr. Boumatari's actions that have sought to mislead the Libyan public and damage trust in the financial system, and his subsequent refusal to issue a correction when informed of the damage caused by his media interviews. The CBL has been left with no choice but to refer the matter to the office of the Prosecutor General and resolution through legal means.
To build trust the CBL is operating with a high degree of transparency and is committed to publishing a monthly statement on revenue and public expenditure in Libyan dinars and foreign exchange, in addition to a weekly statement on documentary credits for commercial purposes.