Turmoil over axing of top bank official

Libya’s powerful central bank governor has been fired as tensions between the two governing factions continue to grow. And Legalbrief reports that the UN has warned that the situation in Libya is marked by fragmentation, competing power centres, and a lack of an effective central authority. The presidential council in Tripoli, which is allied with the Government of Prime Minister Abdul Hamid Dbeibah that controls western Libya, removed Governor Sadiq al-Kabir, according to a decree issued on Sunday, reports africanews. In his place, the council appointed Mohamed Abdul Salam al-Shukri, an economist and former deputy governor, as the new governor for the Central Bank of Libya (CBL). Al-Kabir had led the central bank since October 2011 – the year that Libya was plunged into chaos after a Nato-backed uprising toppled long-time dictator Muammar Gadaffi. During that time, he accumulated significant influence and power but also faced criticism from officials on both side of the country's political divide in allocating Libya's oil money. In recent months, that criticism has turned into calls for his removal. Oil-rich Libya has been split between a UN-supported government in the capital, Tripoli, and rival authorities based in the east. Different armed groups and foreign governments have backed each side. The Central Bank is the repository for billions of dollars annually in oil revenue as well as foreign reserves. In 2014, it splintered along the country’s political fault lines.

Libya’s House of Representatives (HoR) has condemned attempts to storm the headquarters of the CBL by ‘committees from illegitimate and unrelated parties’. Legalbrief reports that the the UN Mission in Libya (UNSMIL) and the embassies of the US and UK have called on various actors to de-escalate in the wake of security tensions. The UNSMIL has expressed ‘grave concern’ about reports of mobilisation of forces in Tripoli, including the threats to use force to resolve the crisis surrounding the CBL. The Libyan Herald reports that the HoR said it holds these persons and entities fully, legally and morally responsible for such illegal acts and the consequent damage to the Libyan citizen and the country’s economy. It called on the Attorney-General to urgently investigate this attack and bring ‎‎those responsible to justice.‎

The UN Economic and Social Commission for Western Asia (Unescwa) last week said the risk of conflict in Libya was ‘significant’. It said the country’s history of conflict and political instability are key drivers of vulnerability. In the past decade, the country has experienced upheavals including civil war, foreign intervention and factional power struggles. A 2020 ceasefire brought some respite, but delayed elections in 2022 fuelled tensions. Limited territorial integrity contributes to low resilience. Weak state institutions foster a fragmented political landscape and allowing armed non-state actors to flourish. Prolonged displacement and migrant risks exacerbate the humanitarian crisis. Unescwa notes that Libya is facing ‘moderate’ social risk. The situation has improved marginally since 2010. High unemployment, especially among young people and women, contributes to economic disenfranchisement. Limited resilience stems from low participation of women in the labour force. Health coverage and water and sanitation services have been improving, but deteriorating infrastructure and a lack of co-ordination pose challenges. The country’s healthcare system faces obstacles including inadequate resources, limited access in certain areas, and the lingering effects of conflict.