Round and round on the carousel of big egos we go
Libya is once again being pulled apart at the seams by its rival administrations.
Kiri Rupiah
The end may be in sight for a standoff that plunged Libya into chaos last month, after the country’s two governments reached an agreement over who will lead the central bank.
On Tuesday, the Benghazi-based House of Representatives and the High State Council in Tripoli released a statement saying they had agreed to jointly appoint a central bank governor and board of directors within 30 days, potentially ending a saga that saw the previous governor of the Central Bank of Libya, Saddiq al-Kabir, fleeing the country to parts unknown.
Whoever governs Libya’s central bank must serve two masters: Commander Khalifa Haftar in Benghazi and Prime Minister Abdulhamid al-Dbeibah in Tripoli.
Haftar, a notorious warlord who has been accused of war crimes, commands the Libyan National Army and is the de facto leader of eastern Libya. Dbeibah is the leader of Libya’s internationally recognised government, based in Tripoli in the country’s west Since 2014 Libya has been split between these two administrations. A short-lived unity ended after a year in 2022 when the Benghazi-based parliament withdrew its confidence in Dbeibah’s government, appointing its own prime minister, Osama Hammad. International governments and institutions still recognise Dbeibah’s Tripoli government.
The central bank in Tripoli is the only internationally recognised repository of Libya’s oil revenues, but most of the oil wells are in eastern Libya. Of the 1.18-million barrels of oil Libya produces a day, only 130,000 are from an oil well outside Haftar’s territory, according to Reuters. Oil constitutes 97% of Libyan exports, more than 90% of government revenues, and 68% of GDP, according to the African Development Bank.
In the months leading up to August, central bank governor Kabir had become increasingly vocal in his criticism of Dbeibah’s spending. In a recent interview with The Financial Times, Kabir had accused the prime minister of being a spendthrift who had “painted a misleadingly ‘rosy’ picture of the economy in his speeches”. This made him unpopular with the Tripoli government, a rift that came to a head on 18 August.
On that day, an unidentified group of armed men abducted the bank’s head of IT, Musab Msallem, from his house. In response, the bank suspended all operations. Msallem was released unharmed, a few hours later. The Al Monitor newspaper reported that Richard Norland, the UN’s special envoy to Libya, had said the abduction was an attempt to get Kabir to resign.
The next day, the Dbeibah-allied Presidency Council, headed by Mohammed al-Menfi, announced it was dismissing Kabir. The move was quickly rejected by the Haftar-allied parliament, even though, according to Claudia Gazzini of Crisis Group, for the past eight years, it has been trying to kick Kabir out. Kabir’s firing was unilateral, illegal and in violation of United Nations accords that require consensus between the eastern and western governments on the appointment of a central bank governor, Gazinni said.
Citing “force majeure” with Kabir’s f iring, Haftar began oil blockades halting production at the El Feel, Amal, Nafoora and Abu Attifel fields. By 28 August Libya’s oil production was down to 590,000 barrels per day and this week and on Monday exports at major ports were halted, Reuters reports.
Short of all-out war, oil blockades are a favourite tactic of the Benghazi administration, to bring the Tripoli faction to heel, political scientist Jalel Harchaoui told The Continent.
Pro-Haftar protesters blockaded oil ports for months in 2022, after Benghazi withdrew confidence in the Tripoli administration.
During the current crisis, the central bank has not been able to conduct transactions until the matter of its leadership is resolved. According to Harchaoui, this uncertainty has led financial institutions that use the US dollar for transactions to take a wait-andsee approach – and the dinar is tanking slowly on the black market.