USAID Libya Public Financial Management (BAB AL TAMKEEN) Program Quarterly Report FY 2021 Quarter 2

The program aims to address critical macro-fiscal, electricity sector, and enabling environment constraints facing the post-Arab Spring Libyan economy. Public Financial Management (PFM) is a key component of the program, focusing on improving the financial management capacity of municipalities and the Ministry of Finance (MoF). At the subnational level, the PFM team assisted nine more of its first-generation partner municipalities to achieve mayoral approval of their 2021 Own Source Revenue (OSR) budgets. This brings the total number of first-generation partner municipalities that have achieved mayoral approval of their OSR budgets to 20 out of 21. The PFM team also assisted 11 of its 25 second-generation municipalities to develop and obtain mayoral approval of their 2021 OSR budgets. In the remaining 14 second-generation municipalities, the team conducted a Public Expenditure and Financial Accountability (PEFA)-based needs assessment of their PFM capacity. The assessment evaluated the municipalities' current institutional structure, available staffing, and the adequacy of processes and procedures in relation to OSR budgeting. The team then began building their PFM capacities to prepare them to initiate development of their 2022 OSR budgets in May. The PFM team also made progress advancing the municipal pilot programs in the areas of solid waste management, primary health care, and primary education. At the national level, the Macro-Fiscal (MF) team continued to build the capacity of the Macro-Fiscal Unit (MFU) to track and analyze macro-fiscal trends, conduct policy-relevant research, produce cogent monthly macro-fiscal reports, and engage in rigorous macro-fiscal policy analysis exercises. The team assisted the MoF in advancing the development of a national medium-term budget for the solid waste management, primary health care, and primary education sectors. The MF team also initiated work to improve the budget execution and monitoring process. The Electricity Sector (ES) team played a leading role in developing the Libya Emergency Grid Stabilization Program (LEGSP), a 24-month plan for restoring GECOL's generation capacity, implementing a transparent and equitable load shedding scheme, and increasing energy conservation and renewable energy development. GECOL experienced dramatic improvements in revenue, reporting collections of 221 million LYD in January and February, nearly a six-fold increase over the 38 million LYD collected during the same period last year. The Business Enabling Environment (BEE) team advanced the development of Libya's Memorandum of Foreign Trade Regime (MFTR), the first substantive document Libya must submit to the WTO to launch the accession process. The MFTR is expected to be finalized and submitted to the GNU for approval next quarter. The team also worked intensively with the Libyan Customs Authority (LCA) on amendments to the Customs Law, the introduction of modern risk management practices, restructuring the LCA's organization, and assessing its capacity building needs.