“Highest price” in the civil war
Libya’s central bank ceases operations
18.08.2024, 15:48
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In the power struggle between the two rival governments in Libya, the central bank plays an important role in maintaining public order. Among other things, it manages the revenue from oil exports. The fact that the bank now has to close is a worrying sign.
In Libya, the central bank has stopped working after an employee was kidnapped. The bank’s IT manager was kidnapped by “unknown groups” and work was therefore stopped, it was said. Other employees have also received similar threats. Until their IT manager is released, all banking transactions and the work of all departments will be suspended. The step also affects the deposit for revenues from the state oil business.
This further escalates the new crisis between the two rival governments in the country. In the desert state in North Africa, a battle for influence and resources has long been going on between two large camps. They are led by Prime Minister Abdel Hamid Dbaiba in the west and Field Marshal Chalifa Haftar and his sons in the east of the country. There are two governments and administrations working in parallel.
Revenues from the oil and gas business, which account for around 95 percent of state revenues, are paid into the central bank. The central bank is responsible, among other things, for paying public salaries, including in the east. It is the “highest price” for the groups fighting in Libya, namely the “largest foreign exchange reserves in Africa and the bubbling heart of the Libyan oil-driven economy,” wrote expert Wolfram Lacher from the German Institute for International and Security Affairs (SWP). According to figures from the International Monetary Fund, the Libyan central bank has reserves of almost 90 billion US dollars.
The conflict in the country is being fueled by other countries that are also vying for influence in the oil-rich state. Haftar is supported primarily by Russia, while the Dbaiba government is supported by Turkey. In 2020, Turkey also helped to repel an offensive by Haftar’s self-proclaimed Libyan National Army (LNA) on Tripoli. Since then, the country has been effectively divided, and there have been no major battles since the summer of 2020. Now, however, there is a renewed build-up of arms and fears that a new phase of major fighting could be imminent.