On Thursday, the Governor of the Tripoli-based Central Bank of Libya (CBL), Al-Siddiq Al-Kabir and his counterpart at the eastern CBL branch, Ali Salim Al-Hibri signed an agreement on a four-stage plan for reunification, including the appointment of an external consultant.
The two banks said they had taken important steps, such as unifying their boards of directors, and adding that work by the technical committees has begun.
Last month, Al-Kabir told Reuters after a meeting with Al-Hibri that he hoped the first stage of unification could be accomplished by July. Economic divisions have added to Libya’s chaos, and led to differing exchange rates, liquidity shortages, and ballooning public debts that further hurt the battered economy.
In December, the CBL announced a plan to end the 7-years of division between the eastern and western banks. It said in a statement that the two officials had met in Tunisia, and agreed on a detailed plan to unite the bank.
They discussed the stages of the unification in accordance with the roadmap proposed by the international accounting firm Deloitte, with the completion of the international financial audit review for the Central Bank in July.
“The division complicates access to foreign exchange, impedes monetary reform, and undermines the integrity and oversight of the commercial banks,” the UN Support Mission in Libya (UNSMIL) said.
The review seeks to create the conditions and provide recommendations to unify the CBL, thereby improving public confidence, transparency, and integrity of the banking sector.
Notably, UNSMIL facilitated the process that included concluding the terms of reference for the review with both CBL branches.
To ensure independence and best practice, the United Nations Office of Project Services (UNOPS) managed the procurement process that resulted in the selection of Deloitte as the independent auditor.
“The unification of the CBL is no longer simply recommended but required. The division complicates access to foreign exchange, impedes monetary reform, and undermines the integrity and oversight of the commercial banks. The division, in combination with the lack of a unified budget, contributed to both banks accruing debt to finance the respective former governments,” Deloitte’s review noted.