Tripoli— The Central Bank of Libya (CBL) says the influx of illegal migration drains the country of $7 billion annually, according to an official statement published by the bank on 6 April.
The CBL has sounded the alarm regarding the current Libyan deep economic and financial crisis saying that the bank’s “responsibilities towards the nation and citizens deem it necessary to clarify all painful facts and challenges facing the CBL’s management and the current reality of the Libyan economy”.
One of the formidable challenges and obstacles that hinder the bank from achieving its desired goals is the unprecedented expansion of dual public spending as two governments one in the west, the Government of National Unity (GNU), and one in the east, the Libyan Government, are running Libya.
“The inability to combat and limit the phenomenon of goods and fuel smuggling has contributed to the worsening of the crisis, due to the increased demand for importing goods and fuel and the depletion of the foreign currency available to the CBL,” it added.
Libya is witnessing a huge rise in the number of informal migrant workers and illegal immigration, which drains approximately $7 billion annually, said the CBL. This has further increased the consumption of goods and the demand for foreign currency in the parallel market. This parallel market now fuels all illicit activities and propagates Money Laundering operations and Financing of Terrorism through it,” the bank said.
The Libyan Interior Ministry has recently said that there are over 5 million informal migrant workers and illegal migrants in the country.
“The volume of dual public spending during 2024 reached 224 billion LYD, including 123 billion LYD in expenditures by the Government of National Unity, 42 billion LYD for oil swaps, and approximately 59 billion LYD in spending by the Libyan Government, compared to oil and tax revenues amounting to 136 billion LYD,” the CBL said.
This dual public spending has led to a significant increase in the money supply, reaching 178.1 billion LYD, leading in turn to several negative economic effects and pose challenges to the CBL considering the limited tools available to contain it, the bank stressed.
According to the CBL, the uncontrollable public spending “will further increase demand for foreign currency, continue to pressure the Libyan dinar exchange rate against foreign currencies in the parallel market, elevate inflation rates, and risk undermining confidence in the local currency”.