In cash-strapped Libya, leaning on the Libyan Investment Authority (LIA), the nation’s sovereign wealth fund, looks to some like an easy way to cover a 70 percent of GDP budget deficit. After all, with assets valued at approximately USD 67 billion, the LIA is the country’s largest source of ready money.

Since 2011, most of these assets have been frozen by United Nations resolution. Today, Libyan policymakers and the international community are debating whether to unfreeze them. However, there might be good reason to stay the course.

Government wages and fuel subsidies currently make up nearly 90 percent of government spending. Unfreezing funds could finance recurrent expenditures instead of sustainably improving Libyans lives or targeting projects that could help end the conflict. What’s more, if LIA assets are transferred to the treasury without constraint, they could be used to finance recurrent expenditure rather than being invested for the long-term benefit of the country. Simple arithmetic suggests that the fund would be depleted in approximately two years.

There are other drawbacks. Given the current lack of transparency, external oversight and internal monitoring of LIA activities, unfrozen assets could conceivably be mismanaged and end up financing conflict, either through withdrawals or asset allocation.

In the past, financial losses and investments based on patronage rather than financial returns have also been chronic problems. This is largely due to inadequate policies on risk taking, asset allocation and external manager recruitment and oversight. Unfreezing the LIA’s assets is likely to escalate these problems.

While U.N. Security Council sanctions have safeguarded Libyans’ money since the revolution, these restrictions on LIA operations are flawed. The LIA is losing millions—if not billions—of dollars annually in foregone income, lost assets, and high management fees that cannot be renegotiated. For instance, since the LIA is not able to honor cash calls, it risks losing assets outright. Of equal concern, the LIA is neither allowed to reinvest returns nor repurchase fixed income coupons once they come to term. Thus the principal on debt that has matured and returns on investments sit idly in bank accounts. In some cases, commercial banks charge the LIA to hold this cash.

The Security Council could modify the relevant resolutions to allow for “smart sanctions”—meaning sanctions that allow the LIA to maintain asset value, honor cash calls and avoid unnecessary management fees—while keeping assets largely frozen.

Newly appointed LIA chairman Ali Mahmoud is on a mission to tackle these problems. At an October meeting in Tunisia, the LIA outlined a reform agenda to create safeguards and address some systematic challenges it has faced since its inception. LIA management and staff called for greater compliance with the Santiago Principles, a set of accepted good governance guidelines for sovereign wealth funds.

Management and staff also agreed that there should be clearer rules governing asset allocation and the roles and responsibilities of staff. The group advocated for greater communication with Libyan citizens to dispel rumors about the fund’s management.

On 25 November, NRGI signed a memorandum of understanding with the LIA to provide technical assistance over the course of 2017 to assist in improving Santiago Principle adherence. Much work lies ahead in transforming the LIA into a world-class institution. Yet, reassuringly, the current leadership seems committed to this goal.

Andrew Bauer is a senior economic analyst with NRGI. Yusser AL-Gayed is NRGI’s senior advisor for the Middle East and North Africa. He is also a core governments functions and stabilization advisor at the United Nations Development Programme.