Building greater efficiency in public financial management needed for inclusive growth and stability
Decades of authoritarian rule, instability, and violence have left Libyan institutions fragmented and struggling to meet the needs of citizens. Libya has been unable to effectively manage its oil wealth, heavily subsidizes electricity and gasoline, and has a massive public sector payroll, all of which puts pressure on the country’s fiscal health and burdens its citizens. Modern public financial management (PFM) is almost completely lacking in Libya as seen by Libya’s inability to budget for basic services.
To achieve the project’s goal of strengthening Libya’s macroeconomic and fiscal foundations for sustainable and inclusive growth, the project focuses on three objectives:
- Capacity for public financial management at the national and sub-national levels is strengthened
- Libya’s electricity sector is modernised and commercialised
- Economic governance and business enabling environment is improved
ASI’s role as a subcontractor to the prime implementor, the Pragma Corporation, was to lead Objective 1: Capacity for public financial management at the national and sub-national levels is strengthened. We lead activities supporting fiscal planning, medium-term budgeting, budget execution, state-owned enterprises budget planning and monitoring, wage-bill rationalisation, macro-fiscal policy analysis, intergovernmental finance, and sub-national PFM policy and institutional reform and capacity building.
What the project achieved
- Helped set up the Medium-Term Expenditure Framework for the Government of Libya to use resources more effectively
- Developed the budget planning and monitoring unit of State-Owned Enterprises (SOE) for the Ministry of Finance, which will improve SOE governance and transparency
- Assisted 46 municipalities with preparing own-source revenue (OSR) budgets that are decentralised and transparent, and provide extra resources for public services
- Assisted in the development of regulation that authorised the decentralisation of funding to municipalities and the collection of OSRs, a legal mandate widely regarded as a major achievement for the project
- Supported selected municipalities with preparing medium-term budgets for operations and capital budgets covering health care, education, and solid waste management