The two legislative bodies in Libya agreed on Tuesday to appoint a governor for the Central Bank of Libya, which may end the battle over control of the country’s oil revenues that has significantly reduced production.
The Libyan House of Representatives, based in Benghazi in the eastern part of the country, and the High Council of State in Tripoli in the west, signed a joint statement after two days of talks hosted by the United Nations Support Mission in Libya.
Both sides agreed to appoint a governor for the Central Bank and a board of directors within 30 days. The Central Bank of Libya is the sole legal entity responsible for Libyan oil revenues and pays the salaries of state employees across the country.
The two legislative bodies also agreed to extend the consultation period by an additional five days, ending on September 9. Libya has not enjoyed stability since the NATO-backed uprising in 2011, and the country split in 2014 between two factions, one in the east and the other in the west. A prolonged war ended with a ceasefire agreement in 2020, and despite attempts at reunification, divisions still exist.
The House of Representatives and the High Council of State were internationally recognized in a 2015 political agreement, despite their support for different sides throughout most of the Libyan conflict.
The confrontation began when the head of the Presidential Council in Tripoli moved last month to oust the veteran Central Bank governor, Sadiq al-Kabir, and replace him with a rival board of directors. This prompted factions in eastern Libya to declare a complete halt to oil production, threatening to end four years of relative stability.
Some oil production has resumed since then, and oil prices fell about five percent on Tuesday to their lowest levels in about nine months, indicating that traders expect the recent agreement to lead to an increase in oil flow.
Operations at the Libyan Central Bank have been halted due to the conflict over its control, rendering it unable to conduct transactions for more than a week. The underlying issue is the divided political landscape in the country between competing governing institutions with weak claims to legitimacy.
