Government Official: Borrowing and Grants Law Temporary, Not Permanent Budget Alternative

The Prime Minister's financial advisor, Mazhar Mohammed Saleh, confirmed on Tuesday that the adoption of the Borrowing and Grants Law represents a temporary measure to ensure the continuity of government spending until the general budget is approved, stressing that it does not serve as a permanent alternative. Saleh indicated that fluctuating oil prices and the expansion of expenditures reinforce the need for borrowing to cover deficits and secure necessary funding. Saleh added that if the Borrowing and Grants Law is activated as a temporary substitute for the budget, the government will adopt an exceptional financing mechanism enabling it to cover essential expenses and meet its financial obligations pending the approval of the general budget. He explained that this mechanism includes domestic borrowing through the issuance of treasury bills or bonds subscribed to by local banks and national financial institutions. Financing may also involve external borrowing from international financial institutions or donor countries, in addition to benefiting from international grants provided by regional and international bodies to fund specific projects or sectors. The financial advisor clarified that the nature of financing is not necessarily limited to internal sources but is determined by the volume of financial needs, the availability of liquidity, the cost of borrowing, and the legal framework that permits the government to utilize these financial instruments. Saleh further stated that resorting to the option of borrowing and grants instead of approving a budget law is often linked to delays in budget approval, which results in the absence of legal cover for government spending. This prompts the government to seek urgent funding avenues to ensure the continuous disbursement of salaries, financing of public services, and the execution of urgent financial commitments. He also affirmed that weak liquidity or a decrease in general revenues, especially amidst fluctuating oil prices and increasing expenditures, can be an additional factor increasing the necessity for borrowing to bridge the gap and secure the required funding. In conclusion, Saleh emphasized that the Borrowing and Grants Law does not constitute a sustainable alternative to the budget; rather, it is an emergency and temporary measure aimed at ensuring the continuity of state institutions until the constitutional and legislative procedures for approving the general budget are completed.