2 October 2024: HoR and HSC approve agreement to appoint Naji al-Essa as new CBL Governor
This week we look at the CBL agreement, as well as several arrests of Tripoli militiamen involved in torture and abduction plus indications the oil blockade could be lifted soon.
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HoR and HSC approve agreement to appoint Naji al-Essa as new CBL Governor, board to be appointed within 2 weeks; move welcomed by the PC and GNU
Incident: After weeks of division and a worsening economic crisis, this week United Nations Support Mission in Libya (UNSMIL) oversaw the signing of an agreement between the House of Representatives (HoR) and the High State Council (HSC) to appoint a new Governor for the Central Bank of Libya (CBL).
On 25 September, UNSMIL held a fresh round of consultations about the CBL crisis between representatives from the HoR and the HSC, resulting in a compromise being reached on appointing new leadership for the bank. UNSMIL said that two parties initialled an agreement on the procedures, criteria, and timelines for appointing a Governor, Deputy Governor, and Board of Directors for the CBL, in accordance with the provisions of the Libyan Political Agreement (LPA). Presidential Council (PC) Deputies Musa al-Koni and Abdullah al-Lafi both welcomed the agreement, stressing that it would contribute to economic stability in Libya and will help with the political blockage as well.
The agreement is firmly rooted in the provisions of the LPA and comprises seven points. The HoR and HSC agreed to:
1) Nominate Naji al-Essa Belqasim as CBL Governor and Marei al-Barassi as Deputy Governor; 2) Appoint these two candidates based on Article 15 within one week of signing the agreement; 3) Within two weeks of assuming office, the Governor – in consultation with the legislative authority – shall nominate the Board of Directors; 4) In the absence of the Board of Directors, the Governor and Deputy may not exercise any of the board’s powers; 5) Any decision on the management of the CBL that conflicts with the LPA and the content of this Agreement shall be abrogated; 6) UNSMIL will work with all relevant parties to revoke all decisions and actions in conflict with the implementation of the Agreement; 7) the Agreement shall be deemed in forces once signed by both the HoR and HSC representatives.
On 26 September, UNSMIL hosted a signing ceremony attended by HoR and HSC representatives plus, PC Deputy al-Lafi, in the presence of various international diplomats and media representatives (as well as streaming the ceremony). At the event, Acting UN Envoy to Libya Stephanie Koury explained how in line with Article 15 of the LPA, the agreement provides for consultations by the HSC and appointment of the Governor and Deputy Governor by the HoR within one week from the signing of the Agreement, and a Board of Directors to be appointed within 2 weeks from the appointment of the Governor. The Agreement also includes provisions on good governance, transparency, and independence in relation to the CBL.
Koury called for dialogue to address outstanding issues, unify institutions, and reach ‘a broad political consensus leading to credible, inclusive and transparent general elections.’ She also called for the oil blockade to be lifted and for a unified budget to be agreed.
Although the PC and Menfi have accepted the agreement, they maintain they were justified in removing Kabir and insist they have a role in agreeing to the new CBL board.
On 25 September, a letter written by PC Head Muhammed al-Menfi’s advisor and the PC’s representative in the CBL talks Ziyad Daghim to Koury circulated on social media. In the letter, Daghim said the PC supports the agreement provided the new governor is elected in a public session in line with Article 15. However, he said that the PC has the authority to appoint the Board of Directors according to Article 8, Paragraph 2 of the LPA, stressing that the issuance of parliamentary legislation in agreement with the PC that specifies the identity of the board will contribute to resolving the crisis once and for all.
In interview published on 27 September, Menfi said in an interview with the Guardian during his trip to New York for the UN General Assembly that the main motivation for this decree replacing Kabir was to remove him because he had been managing the CBL’s funds ‘without any form of accountability’ and ‘had exploited the state of division’ in the country. ‘It was an abnormal and unsustainable situation,’ he said. Menfi also claimed he had issued his decree ‘to spare the capital, Tripoli, from a certain war that would directly target the Central Bank after the failure of months of negotiations between the dismissed governor and the parliament.’
The HSC and HoR both subsequently approved the agreement in official sessions, with GNU PM Abdul Hameed Dabaiba also welcoming these moves.
On 29 September, the HSC said that 112 of its members had passed the CBL agreement during an official session. On 30 September, the HoR held an official session attended by 108 representatives in which it ‘unanimously’ voted to appoint Naji Essa as Governor and Marei al-Barassi as his Deputy, stating the Board of Directors would be formed within 10 days, so by 10 October.
Following the HoR’s approval of the agreement, PM Abdul Hameed Dabaiba congratulated ‘all the efforts made and the positive steps that corrected the situation at the Central Bank and worked to create an independent professional institution for all Libyans.’
On 1 October, Essa and al-Barassi swore their legal oaths in front of the HoR.
The international community welcomed the signing of the CBL agreement and its approval by the HoR and HSC, stressing the need for a credible and technocratic board.
On 30 September, UNSMIL called on ‘all relevant parties to ensure a smooth handover to the newly appointed CBL leadership in line with existing laws and customary practices in Libya, and to swiftly proceed with the appointment of a credible and professional Board of Directors within two weeks.’ EU Ambassador to Libya Nicola Orlando said ‘We are optimistic that this pivotal agreement will pave the way for further progress towards transparent and accountable management of Libya’s wealth and revenues, ensuring benefits reach citizens across the country. In this spirit, we urge all concerned parties to ensure the prompt resumption of oil and gas production.’ He stressed that ‘selecting a qualified, technocratic leadership, including the Board of Directors, is essential to rebuild trust in the institution and safeguard Libya’s economic and financial stability.’ The US and UK Embassies echoed very similar sentiments.
Comment: At the signing ceremony, Koury noted ‘how the dispute over the CBL leadership has seriously threatened Libya’s financial and economic stability, fragile security and livelihood of all Libyans.’ Koury said that, ‘Although the consultations took time, the outcome today is both positive and promising. It highlights the ability of the Libyan parties to overcome their many challenges when goodwill prevails, and the interests of Libya and its citizens are prioritised above all else.’
Koury said UNSMIL emphasized the importance of a solution that focuses on the ‘procedures, principles, and criteria that ensure the independence, professionalism, good governance, and neutrality of the Central Bank of Libya. At no point did we endorse or oppose any candidate for CBL leadership positions.’ She reiterated that this crisis has shown ‘the imperative for all parties to refrain from unilateral decisions’ as they escalate tensions and deepen the institutional divisions. She said she, along with the international community, looks forward ‘to the reversal and suspension of all unilateral decisions whose harmful impacts persist or may arise in the future.’
As previously reported by L-A, the key sticking point between the PC and the HoR/HSC had been around the PC Resolutions No. 19 and 20 of 2024, passed in mid-August which removed Kabir and appointed the new interim CBL management and triggered this crisis. The HoR and HSC insist the PC revoke the decision, on the basis that it is not legitimate based on the LPA as it is not a legislative authority. In turn, the PC has refused to revoke the decision precisely because it wants to protect the precedent that is has such legislative powers, most likely so it can try to use this to remove the HoR and HSC further down the line. Points 5 and 6 of the agreement seek to address this by saying UNSMIL will work with relevant parties to revoke legislation in conflict with the implementation of the agreement – a clear though indirect reference to the PC’s decisions.
Significance: This agreement is undoubtedly a positive development, signalling the beginning of the end of the current CBL crisis (albeit there are several hurdles left to jump). However, it is primarily an agreement of convenience and does not mean that Libya’s status quo actors will now be willing to agree on a political solution. It seems all parties have been able to agree on Naji Essa as CBL Governor because he is essentially a ‘continuity’ candidate from the perspective of the East (being close to Kabir and having pre-existing relations with key eastern actors), while the PC and Dabaiba have agreed as they are able to highlight that they removed Kabir – even though their initial aim to have a Dabaiba ally running the CBL failed. Furthermore, the appointment of a functioning CBL Board and the clause which says the Governors may not wield the Board’s powers will help to limit the power and influence of the Governor as an individual, theoretically creating more checks and balances to his power.
On the flipside, this increases the importance of the board members, with the selection of these individuals likely to be hotly contested in the coming days. The extent to which the board will act as a stabilising, technocratic force will largely depend on who is selected and on what basis. Prior to the board being appointed, the next big test will be whether Naji Essa can enter and take control of the physical CBL HQ in Tripoli. Given PM Dabaiba has welcomed his appointment, and Tripoli’s armed groups are operating under a loose truce agreement at present, this should be straightforward. In addition, Abdul Ghaffar is there only because of the PC and Dabaiba, so presumably he will hand over control to Naji Essa without any issues.
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Various Tripoli militia members arrested by the Attorney General for involvement in torture, abduction and murder
Incident: On 26 September, the Attorney General initiated criminal proceedings against the perpetrators of an incident of torture that resulted in the death of a Libyan citizen. The leader of the Special Deterrence Force (Rada) sent a notification of the victim's death after he suffered injuries that led to his death on 22 September at the Rada Headquarters at Mitiga.
The Attorney General's Office conducted an investigation, the results of which revealed that the victim was subjected to violence consisting of a beating with a hard object, which resulted in bleeding and kidney failure, which led to complications that the victim did not survive. The investigator then questioned those who had been entrusted with the victim's evidence and found that five security officers were responsible, so the Attorney General decided to detain them pending investigation.
Oil blockade expected to be lifted in the wake of the CBL agreement
Incident: Since the HoR and HSC agreed the CBL deal on 25 September, there have been indications that the oil blockade would be lifted soon.
On 25 September, the US and Italy released a statement as the co-chairs of the 2024 UNGA Libya Senior Officials Meeting (representing Algeria, Egypt, France, Germany, Italy, Morocco, Qatar, Türkiye, United Arab Emirates, UK, and the US) in support of the consensus around the CBL leadership, urging ‘all Libyan parties to allow oil production to resume in full without disruption, interference, or politicization, as well as to ensure that oil and gas revenues are managed in a transparent, equitable and accountable manner with effective Libyan oversight.’
At the signing of the HoR-HSC agreement on the new leadership of the CBL on 26 September, UN Envoy Stephanie Koury emphasized ‘the urgent need to end the closure of oil fields and disruption of oil production and export’, adding she appreciates ‘the commitment made by the authorities in the East to lift the closure.’
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Various Tripoli militia members arrested by the Attorney General for involvement in torture, abduction and murder
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