Libya’s eastern-based government, led by Prime Minister Osama Hammad, has unveiled a proposed budget of approximately $13 billion for the fiscal year, intensifying the ongoing dispute over oil revenue distribution with the Tripoli-based Government of National Unity (GNU).
The budget proposal, announced earlier this week, aims to address the fiscal needs of the eastern administration, which controls significant oil-producing regions of the country. However, the move has sparked concerns over the equitable allocation of oil revenues, as the Central Bank of Libya (CBL), headquartered in Tripoli, remains the sole institution authorized to manage and distribute the nation’s oil income.
Prime Minister Hammad emphasized that the proposed budget is designed to reduce the fiscal deficit, enhance oil revenue management, and enforce a unified salary structure across the eastern territories. He also called for updated customs regulations, revised corporate taxation, and strengthened oversight of state institutions. Hammad expressed openness to direct negotiations with GNU Prime Minister Abdul Hamid Dbeibah to prioritize national interests over political rivalry.
The CBL has been actively engaging both administrations to unify the national budget and restore macroeconomic stability. Governor Naji Issa has held meetings with both Prime Ministers, warning that current spending patterns—characterized by high public wages, unsustainable subsidies, and weak oversight pose significant threats to the Libyan economy.
Despite these efforts, the political divide remains a central obstacle. The eastern government’s control over most of Libya’s oilfields, coupled with the CBL’s authority over oil revenues, has led to a complex power struggle. In recent months, the eastern administration has threatened to halt oil production and exports in response to disputes over the central bank’s leadership and revenue allocation.
The international community continues to urge both sides to reach a consensus on a unified budget and equitable revenue sharing to prevent further economic deterioration. As Libya grapples with these challenges, the path to political and economic stability remains uncertain.
