Anas El-Gomati

Shadow State-lords: Infrastructure and Influence

Libya’s economy is heavily dependent on the oil sector. Oil receipts account for nearly 95% of the country’s budget, with between 60-80% of the country’s workforce on the public payroll: oil remains the backbone of the economy, whilst paradoxically fuelling the conflict that brought it to its knees.

The country’s nascent private sector exists in theory behind a facade of small and medium retail and commercial enterprises, but in practice Libya’s most lucrative industry is the illicit smuggling of commodities by a network of warlords and armed groups.

Subsidised commodities and goods available in Libya, particularly refined fuel imported and paid for by the Libyan state ostensibly for the benefit of its citizens, are smuggled by a complex network of traders and traffickers into neighbouring countries to be sold for a profit, at the cost of Libya’s ordinary citizens who wait from hours to weeks in queues for fuel.

Uninhabitable areas across the Sahara hosting Libya’s critical infrastructure of pipelines and remote crossing points quickly became enviable pockets of territory following the fall of the Gaddafi regime, as revolutionary armed groups staked their claim to exploit the early disorder.

Libya’s National Oil Corporation estimated that 30-40% of Libya’s imported fuel is stolen and sold on the black market or smuggled out of the country at an estimated cost of USD 750 million,6 much of which makes it back into the hands of the very armed groups tasked with the security of Libya’s critical infrastructure.

Whilst this smuggling remains an important aspect of wealth extraction by armed groups, it is also a means of influence. The bulk of Libya’s socio-economic infrastructure has long been fought over by a variety of armed groups, social, and ethnic constituents eager to acquire leverage over the government.

Disruption to Libya’s oil and gas production had become the norm in the early post revolution years, but was not limited to the energy infrastructure. Bolstered by widespread socio-economic grievances across the country and a prevailing narrative of political marginalisation by the centralised authority in Tripoli, protestors would often turn to disrupt Libya’s infrastructure and secure concessions from Tripoli.

In 2013, vulnerable ethnic groups, for instance the Tebu, disrupted operations at the Sarir power station, turning the lights off in much of eastern Libya to secure their activists an audience with the Tripoli administration to request that their town, Rubyana, be linked to the national electricity grid.

The Megarha tribe in the south blockaded Libya’s water supply for 72 hours to secure the release of the daughter of Libya’s former intelligence chief Abdullah Senussi after her abduction in Tripoli. Protests were not limited to tribes or ethnic groups. Even a group of striking teachers disrupted one of Libya’s refineries in Zawia in order to secure long-delayed payments to the education sector.

This evidences a widespread tendency to rely on this technique to accelerate the demands of any social, ethnic or professional group to the top of the Government’s agenda. However, it was not until the summer of 2013 that a new pattern of behaviour became the new normal.

Ibrahim Jadhran’s Petroleum Facilities Guard, (PFG) a militia group tasked with protecting Libya’s oil terminals, sustained a blockade of the terminals and transformed Libya’s infrastructure into a political bargaining chip to gain political access to the state.

Foreign Support: From Warcraft to Statecraft

Jadhran’s blockade would cost the Libyan government and NOC billions of dollars in losses, but the Skhirat process, brokered by the United Nations in 2015 under their former envoy to Libya Bernardino Leon, would end up costing more.

In December 2015, Leon established a Presidential Council (PC), an executive nine-member body to lead the Government of National Accord, whose composition was selected on the basis of inclusivity and representation of Libya’s warring rival parties. Leon appointed Fathi Al Majbari, an associate of Ibrahim Jadhran, as one of PC’s

deputy Presidents, in order to secure his buy-in to the GNA in the process, setting a precedent to accomodate warlords. Leon’s decision formally crossed a political threshold: spoil a little and you will secure political concessions, spoil a lot and you will secure a portion of the state.

Jadhran’s transition to a shadow state lord would be short-lived as he lost control of the PFG and the oil crescent following their negotiated defection to Khalifa Haftar in 2016, who would go on to win control of much of Libya’s oil infrastructure between 2016 and 2018.

Haftar, like Jadhran, was also given a deputy presidency post in the GNA’s PC through Ali Qatrani in 2015 but was not satisfied with the inclusion of Qatrani to access the state indirectly. Haftar instead used his foreign sponsors for military and diplomatic support to wrestle control of Libya’s oil and its state.

In 2017 and 2018, the United Arab Emirates (UAE) offered diplomatic and military support via the private military contractor Erik Prince, formerly of Blackwater, to assist Haftar’s takeover of Eastern Libya including the oil crescent.

Prince’s men established the UAE’s airbase Al Khadim in eastern Libya, and are alleged to have used Chinese drones and converted air tractors to assist in Haftar’s takeover of the oil crescent and his expansion and encroachment into the GNA’s territory.

At the same time, the UAE convened bilateral negotiations between Haftar and the President of the GNA Faiez Serraj in Abu Dhabi. As the UAE assisted Haftar in increasing his military grip over Libya’s territory, he would negotiate an attempt to institutionalise the LAAF and form a new interim government to become Libya’s joint President, completing his transition from warlord to state-lord.

Negotiations would drag on, and Haftar would launch a power grab on the GNA in Tripoli on 4 April, 2019, supported militarily by the Wagner Group a militia used by the Kremlin to protect its own interests all over the world. The takeover effort was thus paid for by the UAE but discreetly controlled by the Kremlin.

Haftar’s offensive capitulated following Turkey’s last minute drone offensive against the Wagner group to prop up the GNA in May 2020. However, the Wagner group withdrew from the suburbs of Tripoli to occupy Libya’s oil facilities in order to later use them as a bargaining chip in negotiations.

Despite President Vladimir Putin claiming the Wagner Group did not represent the state,13 the GNA’s Deputy Prime Minister Ahmed Mitiga travelled to Moscow to begin negotiating an end to the blockade by Moscow’s mercenaries in exchange for a “committee to establish fair distribution of oil revenues”.

Russia’s use of a mercenary group to blockade Libya’s oil illustrates the great lengths external actors are willing to go to prop up warlords in their quest to access the Libyan state. However, it is not the only way, and certainly not the most audacious. Russia was able to finance much of Libya’s civil war at almost no cost.

Despite Russia’s official recognition of the former GNA in 2015, Moscow quietly violated the GNA’s financial sovereignty, illegally manufacturing counterfeit Libyan dinars through the Kremlin-owned company Goznak. Moscow went on to deliver over USD 10 billion US worth of counterfeit dinars to eastern Libya against the wishes of the internationally-recognised central bank in Tripoli, who print their money through the De La Rue company in the United Kingdom.

Much of these counterfeit dinars have gone on to replenish Haftar’s cash-strapped LAAF, sustain repeated oil blockades against the GNA and improve his bargaining position in diplomatic negotiations. Russia essentially invented a priceless way of funding wars, costing nothing more than the paper it is printed on. 

The move is the first of its kind, and marks a significant departure from the international norms of monetary sovereignty and the way in which wars have been traditionally funded. This technique was only made possible through the combination of Russia’s intimidating military weight and its powerful position in the UN Security Council that makes it immune from sanctions and gives it the power to break even the most basic rules without fear of repercussion. 

However, its lethality and efficacy is in the way Russia created a new way of financing Haftar’s war to take power from the GNA, whilst making the Libyan state pay for it. The Libyan central bank was forced to make the difficult decision of whether to honour the Russian rival currency, and eventually incur the Russian dinars as a debt upon the unification of the rival bank, or accept the de-facto division of Libya into two separate financial zones and potentially a separate state entirely.

Conclusion: Libya’s Armed Groups in the Global Competition

Libya’s shadow state lords are a growing phenomenon that is unlikely to subside in an era of growing global competition and conflict that transformed the country into a disorderly theatre of great power competition Libya has experienced dramatic divisions and change over the last eleven years, witnessing five interim governments, three civil wars, two coup d’états and two UN peace processes. All have come and gone, yet armed groups remain, demonstrating their savviness in navigating these extraordinary societal and political changes and emerging stronger than before.

Libya remains in a deep political crisis, and desperately needs a new peace process, but against a new and complex global context. A global energy crisis sparked by Russia’s invasion of Ukraine has renewed interest in saving Libya, and its oil sector is now seen as lifeline to the Mediterranean that will only grow in importance to both Europe and Russia.

The intractable nature of the war in Ukraine is likely to nurture more global power competition in Libya, producing the same conditions that led to the rise of armed groups in the past to shadow state lords of today. Libya’s warlords will again find themselves in a strong bargaining position as powerful local proxies to desperate foreign patrons, who will empower them to defeat their rivals in the short term at any cost, neglecting the long term debt to stability this policy produced over a decade ago.


Anas El Gomati is the founder and director of the Tripoli-based Sadeq Institute, the first public policy think tank in Libya’s history, established in 2011. He has held several positions in the MENA region and Europe, as a former visiting fellow at the Carnegie Middle East Center in Beirut, Lebanon and former visiting lecturer at the NATO Defence College in Rome, Italy.


Source: “Warlords to State-lords: Armed Groups and Power Trajectories in Libya and Yemen”, edited by Eleonora Ardemagni and Federica Saini Fasanotti.

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