The governor of Libya’s central bank said he has fled the country following threats against his life by armed militias amidst a new political crisis.

Governor Sadiq Al-Kabir and the Central Bank of Libya are at the center of a new conflict in a country that has been battered by sectarian division and political instability since Muammar Gaddafi’s overthrow. Libya’s central bank controls billions of oil revenue generated by oil sales.

Libya is divided between two governments battling for legitimacy, the Tripoli-based internationally recognized government, led by Prime Minister Abdul Hamid Al-Dbeibeh, has been pushing for the removal of Kabir. Kabir had accused Al-Dbeibeh of “overspending and painting a misleadingly ‘rosy’ picture of the economy in his speeches.”

The Tripoli government has overtaken the Central Bank’s headquarters in the capital.

However, Kabir has the support of the unrecognized eastern government in Benghazi and its Prime Minister Osama Hammad. Following Al-Dbeibeh’s removal of Kabir, Hammad announced that his government would shut down oil production.

Kabir, in an interview with the Financial Times, said that efforts to replace him are illegal and do not conform to the U.N.’s negotiated agreement between the Western and Eastern governments.

Although lacking international recognition, the Benghazi government controls most of the country’s oilfields, oil represents 95% of Libya’s exports. Ever since Hammad’s announcement, Libya’s oil output has fallen by more than half, to now 591,024 barrels, as reported by Reuters.

The Benghazi-based government did not specify how long the oilfields will be closed. Al-Dbeibeh has said that oil production should not shut down “under flimsy pretexts.”

The spat over control of Libya’s monetary authority has also caused the banking system in Libya to halt. Libyans are currently unable to transfer or withdraw money and the country is facing a liquidation problem.

The disruption in Libyan central bank operations also means that the country would not be able to pay salaries to its civil servants and public officials.

United Nations Support Mission in Libya (U.N.S.M.I.L.) released a statement on 26 August 2024, expressing the mission’s “deep concern over the deteriorating situation in Libya resulting from unilateral decisions.” The statement said that U.N.S.M.I.L. is convening an emergency meeting with all parties involved in the central bank crisis.

U.N.S.M.I.L. has called for the suspension of “all unilateral decisions related to” Libya’s central bank and “lifting force majeure on oil fields.”

It is taking the entire country’s oil production and its major source of income hostage. Libya’s eastern internationally unrecognized government’s action follows the historical trend of using oil production for political gains.

Combined with rising political tension and the lack of a unified government, Libya’s political crisis is likely to transition into a new civil war that would further decimate the country and tumble the fragile peace following the 2020 status quo.

Indubitably, the lack of stability in Libya necessitates the creation of a new geopolitical alliance. Countries such as Turkey, Egypt, Algeria, and Switzerland must employ their influence in Libya to collectively pressure Al-Dbeibeh and Hammad to stand down and de-escalate.

The geopolitical stability of North Africa depends on the stability of Libya. Therefore, stakeholder countries that will be affected by Libya’s cut in oil production should convince the two governments to continue the important stabilization process.