First Test of the Budget: Why Are Development Funds Stalled Between Tripoli and Benghazi?

Despite being approved months ago under U.S. sponsorship as Libya's first unified budget, the financial agreement between rival factions has not been implemented, sparking debate over its implications.

After more than 13 years of division, Libya's rivals reached an agreement in April that called for unifying financial spending, but this agreement faces obstacles in implementation, particularly regarding reconstruction and development funding.

Reflection of Division

Political analyst Khalid Muhammad Al-Hajjazi commented, saying, "Discussing a unified budget in Libya should not stop at announcing the agreement or unifying expenditure items; the real test begins with the harder question: who actually controls the decision to disburse state funds?"

Al-Hajjazi told "Erem News" that "Over recent years, the financial divide was not merely a dispute between institutions in Tripoli and Benghazi; it was a direct reflection of the political and institutional split that has affected Libya’s state."

He added: "Therefore, agreeing on a unified spending framework is a significant step, but it does not necessarily mean that tools for controlling public money have become fully unified. It is precisely here that the issue of development funds emerges as the first true test."

He explained that "salaries and basic expenses can be managed through clear financial schedules, but development is entirely different, as it involves projects, their locations, priorities, the entity endorsing them, the body issuing financial authorization, who disburses the funds, and who monitors implementation."

He continued: "Therefore, when development funds stall or are delayed, the question shouldn't just be: who blocked them? We must ask: who actually holds the decision-making power? If Tripoli holds part of the financial decision-making tools while Benghazi oversees and manages a large number of development projects, we face a problem that goes beyond accounting procedures to the core of the political crisis: Do we truly have one budget, or merely unified figures while the keys to implementation remain scattered across different institutions and centers of influence?"

Al-Hajjazi noted that "The most dangerous aspect is that development funds are not just money spent on projects; they transform into roads, hospitals, schools, airports, facilities, and services, and thus also into public trust and political influence. Therefore, any party capable of blocking or accelerating a project, or determining spending priorities, effectively holds part of the country’s political decision-making power."

He stressed that success of the unified budget requires more than agreement on numbers. Libya needs a clear, publicly announced mechanism defining: who approves the project? Who issues authorization? Who transfers the funds? Who implements it? Who monitors it? Only when this chain is unified can we say Libya has genuinely begun integrating its financial institutions.

Lack of Standards

Meanwhile, political analyst Ibrahim Aswati believes the failure of Libya’s unified financial spending agreement stems from factors such as the absence of agreed-upon distribution standards for allocating around 40 billion dinars designated for development under this agreement.

Aswati clarified in a special statement to "Erem News" that another crucial point lies in the struggle over legitimacy: the Government of National Unity led by Abdul Hamid al-Dbeibah insists that all agreed-upon funds must flow through its channels—such as the Ministry of Finance and the Central Bank—while eastern authorities insist these funds must be disbursed through their own channels, such as the Government of Stability and the Reconstruction Fund.

He pointed out that this file is complex, and given current circumstances, the April agreement will remain mere ink on paper.