The Washington Times newspaper published a report about corruption in the Libyan financial system. It reported that corruption within Libya’s financial system continues to be a major stumbling block, threatening to block Libya’s path towards a more stable and secure future.
The report in the Washington Times said that Libyan businesses and private citizens are too often unable to carry out basic financial transactions. According to the report, the Governor of the Central Bank of Libya (CBL), Sadiq al-Kabir and his allies, control significant amounts of revenues. They have built a network of businessmen-enablers who exploit the black market and shadow economy for illicit profits.
Together, they undermine the Libyan economy and channel cash to the covert militias, which foments unrest in the country.
The newspaper quoted a Reuters report saying that, “during the past seven years, a parallel administration emerged in the east with its own central bank, a rival oil company chief and other state institutions, claiming legitimacy from the Tobruk-based parliament that was elected in 2014.”
Accounting company, Deloitte conducted an audit of the CBL at the request of the United Nations Office for Project Services (UNOPS). Deloitte stated that the reunification of the bank was not only highly recommended, but also required — a position that Governor al-Kabir has firmly rejected.
In February 2021, the international NGO, Global Witness released a report alleging widespread fraud in the CBL. The report detailed how abuses in the CBL’s letters of credit system are diverting millions of dollars from the government’s coffers while also being used to fund militias and other hostile actors seeking to destabilise the country.
Since the 2011 revolution, Libyan businesses and government agencies have relied on letters of credit as the only official source of foreign currency to purchase food, medication, equipment, and services from abroad.
For the sake of Libya’s future, elections are the best means to ensure proper accountability and badly needed reform policies.
The Washington Times report added that United States (US) Ambassador to Libya, Richard Norland, recently stressed that, “Libyans do not wish to see a repeat of the civil conflict of the past. The best hope for stability lies in the elections scheduled for December. Political leaders on all sides bear a responsibility for agreeing immediately on a compromise solution that will enable those elections to take place as scheduled. The US will support them in this process.”
The report pointed out that it is in the national security interests of the US, and especially its allies on the Mediterranean, that Libya steps forward smartly towards an honest, functioning government, one that can deliver better security, economic growth, and political stability.