Libya’s Ministry of Finance announced a new Public Financial Reform Program on Tuesday in a major step to regulate and reform Libya’s public financial management systems.
The announcement is the first step in a program of essential reform initiatives planned by the Ministry of Finance, part of its overall commitment to ensure fiscal prudence through efficiency, transparency, accountability and good governance.
Through its Chapter One budget, Libya currently suffers the highest wage bill as a percentage of GDP in the Middle East and North Africa region. This is estimated at 55% of GDP as a result of paying between 1.8 million – 2 million public sector salaries.
An initial assessment by Libya’s Ministry of Finance has identified several areas and opportunities for vast improvement. The reform program has been developed to directly tackle systematic wastage, creating streamlined processes across the whole of government. The reforms will comprise the following measures:
- Integration and connectivity – development of a chart of account and an integrated IT database to improve financial reporting.
- Payroll system – an upgraded integrated payroll system to eliminate wastage caused by, for example, inaccurate data and duplication.
- Provide tighter controls and capabilities – a comprehensive program of capacity building among the civil service at the Ministry of Finance.
Commenting on the reform program, Libya’s Finance Minister Faraj Boumtari said:
“Since taking public office a year ago I immediately set about identifying essential areas for improvement, and today we present these solutions in the form of a robust reform program.”
Minister Boumtari said that by tackling inefficiencies within the Chapter One budget, he is confident the Ministry can “make cost reductions of up to 10% within the program’s first year.”
The Minister continued:
“The Ministry of Finance is committed to continue to work with the international community who have provided much needed technical assistance.’’
This program of reform is expected to not only create significant savings and much needed efficiencies within Libya’s public sector finances, it will also pave the way for a renewed culture of transparency, accountability and governance within Libya’s public financial management systems.
(Source: Ministry of Finance)