Analysis by Region - Africa - Libya

Analysis by Region - Africa - Libya

The past quarter, and the month of July in particular, have seen some negative risk signals on the political front. In early July, Field Marshal Khalifa Haftar, who commands an army in the east of Libya, threatened force to extort more money from the Central Bank of Libya (CBL). The CBL demanded a full accounting of how the National Oil Corporation (NOC) spent an exceptional allocation of LYD34bn ($7bn) in 2022. Osama Hammad, the new prime minister named by the House of Representatives (HoR) in the east of the country in May, insisted that his parallel government is entitled to 27% of government expenditure. These are signs that Prime Minister Abdelhamid Dbeibah, who heads the Tripoli-based government that has been able to maintain a degree of order since last September, is losing control. The usual way for militias to exercise pressure on the NOC and CBL is to shut down oilfields, as the Zawi tribal confederation did for three days in mid-July. To take into account more sabotage of this kind, we have lowered our oil production forecast, which has affected the overall macroeconomic outlook.