Libyan fiscal crisis and foreign currency deficit

Libya is experiencing a significant fiscal crisis driven by high levels of parallel spending and a widening foreign currency deficit. Central Bank of Libya Governor Naji Issa highlighted that parallel spending has reached approximately 69 billion dinars, raising concerns about a lack of financial oversight and the inability to unify the national budget.

By late August 2026, the Central Bank reported that foreign currency usage had exceeded oil revenues and royalties by approximately $4.9 billion during the first eight months of the year. Total revenues for this period were roughly 99 billion dinars, with oil revenues and royalties accounting for 80.8 billion and 15.3 billion dinars, respectively.

Expenditures have been heavily weighted toward current costs, with salaries alone representing 46.9 billion dinars. The bank also allocated over 2.58 billion dinars to support the General Electricity Company. Consequently, the bank’s foreign assets declined from $99.4 billion at the end of 2025 to approximately $96 billion by the end of August 2026.