It is Time to Sanction those Responsible for State Capture in Libya

Calling the shots: General Khalifa Haftar attends a conference with other Libyan leaders on 5 September 2024

Calling the shots: General Khalifa Haftar attends a conference with other Libyan leaders on 5 September 2024. Image: dpa picture alliance / Alamy


As Libya struggles with deep-seated issues of state capture and corruption, the international community must take action against those who are plundering the country’s money and resources.

The possible reinstatement of Sadiq al-Kebir as governor of the Central Bank of Libya (CBL) will not resolve the country’s problems. One of the solutions being proposed is that Kebir should resume his position temporarily until the Benghazi-based House of Representatives and the Tripoli-based High State Council – which together form a kind of joint legislature – select his replacement.

Unfortunately, even if such a resolution is possible, it will not begin to fix the problem of state capture into which Libya has fallen under Prime Minister Abdel Hamid al-Dabaiba in the west, and the warlord General Khalifa Haftar in the east.

The crisis began when the Tripoli-based Presidential Council dismissed Kebir at Dabaiba’s request. Dabaiba had become frustrated at Kebir’s refusal to provide ever more funds from the CBL to support the prime minister’s profligate administration.

Kebir is the longest serving official in Libya. He became governor of the CBL in 2011. In this role he has presided over the division of oil and gas revenues which has been the driving force in the country’s politics since the fall of the Qadhafi regime. Over this time, periods of civil conflict have been interspersed with other periods of approximate stability achieved by buying off the instigators of violence and disruption.

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Kebir's removal by Dabaiba can be approximated to the captain of a football team attempting to unilaterally replace the referee in the middle of the game

Kebir has been correctly described as the lynchpin of this system. At times he has moderated its worst excesses. But he has also been its chief enabler and enforcer. His removal by Dabaiba can be approximated to the captain of a football team attempting to unilaterally replace the referee in the middle of the game. Not surprisingly, Dabaiba’s opponents have refused to accept this gambit. But this should not be mistaken for an endorsement of the departed governor.

In April 2021, a body named the Libyan Political Dialogue Forum elected Dabaiba and the three-person Presidential Council on a single ticket to form a Government of National Unity (GNU). The intention was to fix a divide between east and west Libya which opened soon after the anti-Qadhafi revolution. The new government’s mandate was to organise elections by December 2021 and then to stand down.

In the last stage of voting, the UN uncovered evidence of bribery, but it decided to allow the process to continue. When the government established by this flawed procedure failed to organise elections and instead clung onto power, the only surprise was that anyone was surprised about the outcome. More than three years on, Dabaiba’s GNU has continued as it started.

The most egregious example of its abuse is its treatment of $11 billion in emergency budgets awarded to National Oil Corporation (NOC) with the stated objective of increasing oil production from about 1.2 million barrels per day (b/d) to 2 million b/d by 2025. At the current oil price of $80/barrel, this would have added nearly $16 billion/yr to national income for as long as it could be sustained. In 2023, the country earned $33.6 billion from the export of oil, natural gas and condensate. This could go up to $50 billion/yr.

But while the billions have been spent, oil output has not increased. NOC has also handed over control of its sovereign resources. Since May 2024, a privately owned Benghazi-registered company has exported five 1 million barrel cargoes of crude oil from the Marsa al-Hariga terminal at Tobruk with the corporation’s approval. Chairman Farhat Bengdara has yet to explain how or why it has transferred title to approximately $400 million of crude to this entity, whose ownership and background are obscure. The imposition of blockades on oil export facilities across Libya by forces commanded by General Haftar has not interrupted this unprecedented sequestration of national resources, and provides a strong indication of who is benefiting from it.

NOC has also been implicated in allegations of illegal oil for military drone deals with China which breach international sanctions. General Haftar’s son Saddam Haftar was briefly detained at Naples airport in August under a Spanish arrest warrant related to illicit weapons imports into Libya.

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By stealing Libya’s oil, its oil revenues and its oil and gas development budget, those responsible are not just stealing money and resources; they are stealing their own country’s future

The smuggling of imported fuel back out of Libya has been a billions of dollar-scale drain on state resources since as early as 2015. But the problem has become much worse. The amount of gasoline being imported into Libya has doubled since 2020 with no apparent increase in economic activity. NOC is losing hundreds of millions of dollars via many other instances of corruption and maladministration.

By stealing Libya’s oil, its oil revenues and its oil and gas development budget, those responsible are not just stealing money and resources; they are stealing their own country’s future.

When South African President Jacob Zuma faced allegations of state capture, they were investigated by a special commission led by deputy chief justice Raymond Zondo. One of the outcomes was that Zuma himself was imprisoned for contempt of court when he failed to cooperate.

Does the Libyan judiciary have the capacity, stomach or strength to carry out a similar process? Almost certainly not without international support. There is, however, a lot that responsible actors in the international community can do to support this necessary step. Most importantly, it is time to impose sanctions on those who are abusing Libya’s sovereign interests.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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WRITTEN BY

John Hamilton

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