The Central Bank of Libya has become a new arena for political conflict between the country's rival parties. Talks sponsored by the United Nations Support Mission in Libya have been ongoing to resolve this crisis, which has led to the cessation of oil production and threatens to plunge the country into its worst crisis in years. The situation escalated after the Speaker of the Libyan House of Representatives, Aguila Saleh, threatened to continue closing oil and gas fields until the Governor of the Central Bank, Al-Siddiq Al-Kabir, returned to his position. The crisis erupted following a decision by the Presidential Council to dismiss Al-Kabir, leading to armed factions raising their readiness for confrontations. The Prime Minister declared a state of force majeure on the oil sector, halting crude oil production and exports in protest against the alleged storming of the Central Bank headquarters by a handover committee assigned by the Presidential Council.
The conflict over the Central Bank's governance highlights deeper issues within Libya's political framework. The appointment of the governor is contested, with the House of Representatives asserting that it falls under their jurisdiction. The Presidential Council argues that the new board is necessary for enhancing the bank's operational efficiency and economic stability. Experts indicate that this crisis is not solely about leadership but stems from long-standing contradictions in Libya's political agreements. The lack of organization following the Geneva Agreement in 2021 has exacerbated tensions, leading to a personal dispute among political factions.
Political money has also played a significant role in intensifying the conflict, with accusations that the Dabaiba government is using financial resources to gain political leverage against rival factions. The International Crisis Group warns that the ongoing struggle for control of the Central Bank is dire and could severely impact Libya's humanitarian situation. The Central Bank's role in regulating transactions and approving imports means that the crisis could disrupt essential services and development projects, particularly in remote areas. As talks continue under the UN's auspices, the potential for an imminent agreement remains uncertain.
