14 August 2024: Battle for political supremacy and control of Libya’s coffers intensifies
This week we look at attempts by the GNU and HoR/GNS to seize control of Libyan state funds, clashes in Tajoura amid wider insecurity, and an arrest warrant against the acting GNU oil minister.
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Battle for Libya’s coffers intensifies as HoR hands over budget to GNS, Norland stands with Kabir, and HoR delegitimises GNU and PC
Incident: The Central Bank of Libya’s (CBL) role in disbursing the state’s funds has once more become a major issue within the Libyan political and security landscape.
On 7 August, House of Representatives (HoR) Speaker Aqeela Saleh formally handed over the approval of the 2024 state general budget to Government of National Stability (GNS) Prime Minister Osama Hammad to begin implementing it. They discussed the budget implementation mechanism to allow the GNS to provide services to citizens in various fields, though no details were given. The same day, US Special Envoy to Libya Richard Norland met with Saleh and discussed the economic track, stressing the need for a unified budget, with input from stakeholders in Tripoli and the East. Norland reiterated that the US ‘supports an inclusive Libyan-led and Libyan-owned political process facilitated by UNSMIL to achieve this consensus.’
On 8 August, Norland met with Central Bank of Libya (CBL) Governor Sadiq al-Kabir to discuss the ‘latest developments in the unified budget, the efforts of the Central Bank to rationalize spending, the path of unification and maintaining the sustainability of the state,’ as well as issues such as the closure of Sharara. Norland highlighted ‘the urgent need for a consensus-based agreement on a unified east-west budget’. The same day, Norland met with Presidential Council (PC) head Muhammed al-Menfi. Norland’s read out of the meeting did not mention economic issues, but Menfi said that they discussed ‘the need to work with a clear financial mechanism to monitor and rationalize spending and increase disclosure and transparency, while emphasizing adherence to national sovereignty in managing resources.’
In the following days, and amid growing security and political pressures on the Government of National Unity (GNU), reports began circulating that Menfi intended to remove Kabir, by force if necessary. The reports indicated that Menfi is under pressure from Prime Minister Abdul Hamid Dabaiba to find a way to remove Kabir, or create a mechanism which bypasses the CBL and HoR budget, in order to secure funds for the GNU once more. Menfi is seemingly motivated to back Dabaiba’s efforts to remove Kabir because he fears that any moves to remove the GNU and replace it with a new government could also see the removal of the PC as an entity – the PC in its current form was created at the same time as the GNU under the Libyan Political Dialogue Forum (LPDF) agreement in 2021.
This led to a build-up of pro-Dabaiba armed groups around the CBL building in downtown Tripoli – the building and wider area are controlled by the Special Deterrence Force (Rada), who are close allies of Kabir.
Norland confirmed the reports and gave clear support to Kabir in a follow-up statement. On 12 August, Norland said he had met that day with Kabir ‘to discuss the concerning armed group mobilizations around CBL headquarters. The emergence of yet another set of confrontations between armed groups in recent days highlights the ongoing risks posed by the political stalemate in Libya. Threats to the security of the CBL staff and operations are unacceptable. Like Libya's other sovereign institutions, the CBL's integrity must be protected. In this case, attempting to replace the leadership of the CBL by force can result in Libya losing access to international financial markets. Disputes over distribution of Libya's wealth must be settled through transparent, inclusive negotiations toward a unified, consensus-based budget.’
The HoR then added fuel to the fire by voting to effectively delegitimise the PC and GNU. On 13 August, the HoR spokesman Abdullah Bilhaq said the HoR had voted unanimously ‘to end the term of the executive authority [the GNU and the PC] that came in the preliminary stage [the LPDF] and to consider the government of Osama Hammad as the legitimate government until a unified government is chosen, and to consider the Supreme Commander of the Army to be the Speaker of the HoR [instead of the PC] as stated in the constitutional declaration.’
Comment: Despite their historic enmity, Kabir and Saleh have continued to solidify their alliance of convenience, which began several months ago as the hostilities between Kabir and Dabaiba escalated. Kabir is unhappy with how Dabaiba and his cronies have been managing the state funds and therefore refused to disburse funds for development or emergency projects, severely limiting Dabaiba’s ability to use state funds to shore up and expand his patronage networks (both locally and internationally). Kabir has instead been working with Saleh to lay the groundwork for economic reforms (such as the controversial 27% tax on foreign exchange to de facto devalue the dinar) and for a ‘unified’ budget. This saw Kabir and Saleh meet for the first time in early July, before the HoR passed the 179 billion LYD budget for 2024 for the GNS just days later.
Although in the past the US has been at the forefront of calls for the PC’s High Financial Committee (HFC) to be revived – it held a few meetings in summer 2023 but then essentially disintegrated – Norland now seems to be pushing for greater consensus on a unified east-west budget rather than a separate mechanism. This leaves significant power in Kabir’s hands. Although Kabir himself is a highly problematic figure, the US has long held the view of ‘better the devil you know’ with regard to his leadership of the CBL, concerned that his removal could precipitate significant economic instability and conflict, with potential international ramifications.
Significance: The apparent move by Dabaiba and Menfi to use aligned Tripoli armed groups to try to forcibly remove Kabir as CBL Governor highlights that Dabaiba feels he is being backed into a corner by his opponents, especially as Kabir appears to be disbursing funds to the GNS. Without access to state funds, Dabaiba is unable to satisfactorily sustain his patronage networks or buy support, weakening his position. However, if pro-Dabaiba groups were able to wrestle physical control of the CBL building from Rada then Kabir could be replaced. If Rada’s control is challenged or removed, this is likely to ignite a major escalation of conflict between pro- and anti-Dabaiba armed groups in and around Tripoli, a conflict which could quickly engulf the country and could open the door to a complete reshuffle of the political landscape, one which will likely also lead to major changes in the economic and security landscape as well.
Meanwhile, the HoR’s vote to end the term of both the GNU and PC, and formally recognise the GNS, is intended to add to the pressure on Dabaiba and create space for a new political order to emerge. The HoR ceased recognising the GNU after it appointed the GNS back in 2022, therefore this is more about being seen to strengthen the GNS’s legitimacy further. However, the vote also withdraws the legitimacy of the Presidential Council – which is considered the Supreme Commander under the LPDF. This is more significant as it indicates that the HoR intends to completely disregard the current status quo. Of course, holding a vote on something and implementing it are two very different things. By meeting with Kabir and condemning attempts to intimidate the CBL staff, Norland is sending a clear signal that the US continues to back Kabir, potentially at the expense of Dabaiba. Nevertheless, the US, UN and other western internationals remain very unlikely to recognise the GNS in its current form, and will continue to engage with the GNU and PC as the legitimate executive authorities. However, if the GNU and PC become unviable or Dabaiba is forced out of Tripoli for example, this could change.
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Heavy fighting breaks out between al-Bugra and Sabria in Tajoura, pulling in Misrata and leading to mobilisations around the capital
Incident: An assassination attempt in Tajoura this week led to inter-militia clashes, mobilisations and several deaths. On 9 August, an assassination attempt was made on Bashir Khalaf Allah (aka al-Bugra), the commander of the Rahbat al-Daraa Brigade, in Tajoura – east of Tripoli - but failed. An armed group from the Martyr Sabria Brigade opened fire on al-Bugra and wounded him seriously. Subsequently, very heavy fighting between the Rahbat al-Daraa Brigade and the Martyr Sabria Brigade took place and the Rahbat al-Daraa Brigade succeeded in taking possession of the Martyr Sabria Brigade HQ, Camp Sabria in al-Hamidiyah. The camp of the Misrata Joint Force, located in the same place, was also attacked. The fighting drew in Misratan forces and saw other Tripoli groups mobilise, with the conflict temporarily shifting eastwards to Garabulli.
Attorney General issues arrest warrant for acting oil minister Abdul Sadiq over illicitly directing nearly 500 million Euros to benefit a foreign company
Incident: On 7 August, the Attorney General (AG) ordered the detention of the acting GNU Minister of Oil and the Director of his Office. He is accused of illicitly directing nearly 500 million Euros for ‘the benefit of a foreign company’. In the original statement, the AG’s office simply said ‘the Oil Minister’ creating some confusion regarding the identity of the person in question – it was unclear whether he was the dismissed Minister, Muhammed Aoun, or the acting Minister, Khalifa Abdul Sadiq. Later it emerged that the AG referred to Abdul Sadiq.
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On 6 August, The Guardian published an analysis article by diplomatic editor Patrick Wintour, titled ‘Oilfield slowdown exposes political volatility in Libya and beyond’. The article looks at the recent shutdown of the Spanish-operated Sharara oil field, which was said to be...read more
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Heavy fighting breaks out between al-Bugra and Sabria in Tajoura, pulling in Misrata and leading to mobilisations around the capital
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