LIBYAN CRISIS: Haftar’s Assault Sparks Mass Protests Across Country

Financial Crisis Ignites Protests Across Libya

Tripoli/Misrata - The financial crisis sparked by Haftar’s assault on Eastern Libya has sent citizens pouring into the streets of Tripoli, Misrata, and other major cities to protest against a lack of healthcare, power outages, and rampant corruption.

Background: A Divided Central Bank of Libya

Since 2014, the Central Bank of Libya (CBL) has been split between its Tripoli headquarters and eastern operations. The Government of National Accord (GNA) and the House of Representatives recognize different governors, with the CBL’s Tripoli branch controlling the foreign exchange reserve accounts, LC approvals, and SWIFT codes essential for exporting currency from Libya.

The Power Struggle

Tensions between the GNA government and the CBL over monetary policy and spending have escalated into an open power struggle for control of oil revenues, LCs, and the CBL’s overseas network of banks. The Kaniyat tribe eventually joined Haftar’s forces, and the loss of Tarhuna in June 2020 effectively ended the Libyan Central Bank’s control over eastern Libya.

Consequences of the Crisis

• A significant shortage of foreign currency has led to a decline in imports.
• Human remains have been exhumed from mass graves in Tarhuna, while the CBL rejects allegations of fraud and corruption.
• The crisis has far-reaching implications for Libya’s economy, security, and political stability.

The LC System: A Source of Concern

In April 2020, the CBL reopened the LC system for goods worth up to $3 million, sparking fears that armed groups may be using the system to fund their activities. Critics argue that the information published by the CBL on successful LC applications is difficult to access and lacks key details.

Global Witness Database Reveals Concerns

Global Witness has created a consolidated database of LCs issued between April and July 2020, revealing hundreds of companies and representatives receiving millions of dollars in LC money despite having limited online presence. The database tracks LCs by company, bank, and location, allowing users to identify potential fraud or armed group connections.

Citizens Demand Accountability

As Libya struggles to recover from years of conflict and instability, citizens are demanding greater accountability and transparency from their leaders. The crisis has ignited widespread protests across the country, with citizens calling for change and an end to corruption.