OCCRP: Libyan Central Bank Failed to Account for Billions of New Bills

OCCRP: Libyan Central Bank Failed to Account for Billions of New Bills
OCCRP: Libyan Central Bank Failed to Account for Billions of New Bills

The Organized Crime and Corruption Reporting Project (OCCRP) revealed a leaked financial review claiming that the Central Bank in Libya (CBL) failed to account for the delivery of US$4.8 billion worth of dinar banknotes, from a British printing company.

Libya has two competitor central banks run by two rival governments, in the east and west of the war-torn country.

Documents provided by the Tripoli-based central bank showed a major discrepancy in the amount the institution should have received, according to its contracts with De La Rue, and the amount accounted for in receipts it issued.

Deloitte found that 6.5 billion dinars (worth about $4.8 billion) were unaccounted for in the paperwork.

Patrick Bond, a political economist at the University of Johannesburg, told the OCCRP that the financial review may indicate “Deloitte’s discovery of huge losses” of currency. He added that the finding –– if proven to be true –– could show “dubious practices” on the part of De La Rue, which has currency printing contracts with more than a dozen central banks in Africa.

Deloitte noted that its findings were limited by the circumstances around its research.

“During our Financial Review and based on the documentation that we were provided with by the (central banks) we were not in a position to make any conclusion or determination as to whether any fraud or misappropriation of assets may have taken place,” the report said.

The CBL controlled by the rival government in eastern Libya did not fare any better in its review. It has contracted a Russian state-owned company to print Libyan currency.

These are findings in a pair of “confidential” reports reviewing activities of central banks on opposing sides of Libya’s conflict, which were produced by the global accounting firm Deloitte and obtained by OCCRP.

In 2019 and the first half of 2020, the unbacked currency in circulation accounted for 70% of eastern Libya’s “off-balance sheet” debt, meaning debt that was not disclosed to authorities.

“If these two half-central banks can’t restrain themselves, and they decided to pay outsiders to print bushels of currency that have no ground of value, then they will end up like Argentina or any number of other worthless-currency countries,” said James S. Henry, a lecturer at Yale University and former chief economist for the global management consulting firm McKinsey & Company.