The Legal Framework for Public Loans in Libyan Legislation

Abstract

This research investigates the legal framework of public loans within the Libyan legislative system, exploring their nature, definitions, and the criteria governing their issuance. As public loans have evolved from exceptional financial resources into fundamental instruments of monetary policy, the study examines their role in managing economic challenges, mitigating budget deficits, and fostering development. Utilizing an analytical and deductive methodology, the research reviews the provisions of Law No. 15 of 1986 concerning public debt, analyzing the stages of loan issuance, legal guarantees, and the legal nature of public loan contracts. The study argues that public loans are administrative contracts rather than acts of sovereignty, emphasizing the necessity of binding legal regulations to ensure transparency and accountability. Findings reveal that while the Libyan legislator has established a framework for public debt, there is an urgent need for comprehensive, modern legislation to regulate all aspects of borrowing effectively. The study recommends directing loan proceeds toward productive investments and supporting small projects, which have proven essential for achieving sustainable economic development in developing nations. Furthermore, it highlights the importance of distinguishing between various types of loans—internal vs. external, and voluntary vs. forced—to optimize their impact on the national economy and maintain the state's financial stability and credibility.