Lebanon is in its sixth year of a protracted <a href="https://www.thenationalnews.com/mena/lebanon/2023/08/17/lights-back-on-in-lebanon-after-prime-minister-promises-payment/" target="_blank">financial and liquidity crisis</a>, facing security challenges on its borders with Israel and Syria, but appears to be on the <a href="https://www.thenationalnews.com/mena/lebanon/2023/03/08/no-liquidity-in-lebanese-banks-says-chief-of-countrys-banking-association/" target="_blank">cusp of recovery</a>. The country is battling <a href="https://www.thenationalnews.com/business/economy/2023/02/03/lebanons-business-conditions-improve-in-january-but-economy-impeded-by-political-deadlock/" target="_blank">several economic challenges</a> – a plunge in gross domestic product per capita by about 40 per cent, a <a href="https://www.thenationalnews.com/news/mena/2025/04/04/lebanons-new-central-bank-chief-vows-to-combat-money-laundering-as-cabinet-discusses-bank-reforms/" target="_blank">zombie banking sector</a>, a highly dollarised, increasingly informal, cash-based economy, high multidimensional <a href="https://www.thenationalnews.com/business/economy/2025/03/13/lebanon-must-do-more-to-address-economic-crisis-imf-says/" target="_blank">poverty and unemployment levels</a>, increased inequality, plunge in its currency’s value by 97 per cent, high inflationary pressures (an average of 127 per cent over the past five years) and a collapse of public finances. The new pro-reform president and prime minister along with a cabinet that has parliament’s backing inspires confidence and appears committed to long-delayed economic reforms. Stability and recovery will require political and judicial reforms, along with institutional and structural reforms to ensure the rule of law and accountability, allowing the country to emerge from the heavy legacy of failed policies. Whether the incumbent parliament will enable the deep reforms given municipal and parliamentary elections in 2025 and 2026 respectively, adds uncertainty. A new governor of the central bank has been appointed. Reforms are required to re-establish trust in the banking and financial sector and convince the world to risk investing in its recovery and reconstruction. The first step should be to restructure the Banque du Liban (BDL) and its governance, appoint a new team of vice governors, restrict the powers of the governor to prevent past abuses, ensure public reporting, monitoring and accountability. This is a unique opportunity to have a new reform-minded, effective BDL for the next six years. Given the severe monetary and real shocks Lebanon faces and the legacy of failed policies, the policy agenda should include: This is a moment of opportunity to undertake multipronged reforms to revive confidence and economic activity, attract back human capital, improve long-term growth prospects, and strengthen and restore linkages with the GCC. Lebanon faces reform or continued decay. <i>Nasser Saidi is a former economy minister and deputy governor of Lebanon's central bank</i>
