Libya’s Rival Camps Clash Over Central Bank Control, Putting Oil Revenue and Salaries in Doubt
A move by Libya’s eastern-based parliament to accept the central bank governor’s resignation in principle and name a replacement has intensified a struggle with Tripoli over who controls billions in oil revenue and the state payroll.
A renewed fight over Libya’s Central Bank is raising questions about who controls the country’s oil income and who gets paid.
On 22 October, the House of Representatives in Tobruk, in eastern Libya, said it had accepted the resignation of Central Bank of Libya governor Naji Issa in principle. It also moved to name board member Fawzi Abukhza as his successor.
This step challenges the authorities in Tripoli, where the current central bank leadership is based and where most foreign governments and institutions conduct financial business with Libya.
The central bank manages the proceeds from Libya’s oil exports, oversees foreign reserves, and disburses funds for public salaries and subsidies. In an economy dominated by oil, it sits at the center of the state’s financial system.
If competing authorities issue different instructions to banks and ministries, payments can stall. Past institutional splits in Libya have led to delayed civil servant wages, pensions, and transfers, with direct impact on families who depend on state income.
Foreign oil companies and buyers are also exposed to the uncertainty. They need clarity on which Libyan institution is authorized to receive payments and sign export-related documents. A contested central bank raises the risk that contracts could be questioned later on.
Control of the central bank has long been a core objective in Libya’s fragmented politics. The institution’s formal independence is limited in a system where armed groups and regional blocs have significant influence.
If the Tobruk-based parliament succeeds in installing its own governor and that appointment gains practical effect, it would shift financial leverage toward eastern actors and could deepen Libya’s existing political divide.
The timing is sensitive. Libya has been trying to stabilize oil production and attract investment after years of conflict, shutdowns, and blockades. Any perception that revenues could be diverted or frozen can unsettle both domestic stakeholders and international partners.
In Libya’s rent-based economy, whoever controls the main flow of oil money can shape patronage networks and the funding available to security forces. The current dispute again raises the question of whether these funds will be managed as a national resource or used as a tool in political bargaining.
Key signals in the coming period will be how Tripoli responds to the Tobruk move, whether foreign governments or financial institutions recognize or reject any change at the central bank, and whether the standoff begins to disrupt salary payments or oil export operations.
Sources
- OSINT