Libyan central bank reserves to fall 20 per cent

Falling oil revenues are largely to blame for the crash

Oil terminals in the east of the country have been shut off since January. AFP

Libya's central bank reserves are predicted to fall by about 20 per cent this year because of a blockade on energy exports in the east of the country that has slashed revenues, the audit bureau said.

Annual oil revenues are expected to fall to $5 billion from $31 billion last year, dragging the central bank reserves down to $50 billion, it said.

Oil exports were shut down by protesters allegedly with the backing of armed groups in January. Global oil prices have also crashed as the coronavirus pandemic hits demand, with no prospect of a quick recovery in sight.

The fiscal deficit is forecast to reach $19 billion this year compared to a surplus of $7.82 billion in 2019, the Tripoli-based audit bureau said in a video posted on Facebook on Friday.

Libya has been split since 2014 between the internationally recognised Government of National Accord (GNA) in Tripoli and a rival administration in Benghazi that controls eastern Libya and has set up parallel institutions.

Protesters in the east argue they have not received their fair share of the revenue from the oil.

Although most oil production and export facilities are in the east, international agreements mean it can only be sold by the National Oil Company (NOC) in Tripoli, with revenue flowing through the Tripoli-based Central Bank of Libya (CBL).

The oil revenue is then used to finance state operations across the country, including the salaries of public sector employees in the east as well as areas controlled by the GNA.

Eastern-based forces shut off exports in January and the oil price has since crashed, leading to an immediate reduction in revenue.

The GNA earlier this year issued a state budget with forecast spending but without giving figures for expected revenues