Wolfram Lacher
According to Siddiq Kabir, he is the last pillar holding the country together. His adversaries claim he is perpetuating a national crisis.
***
With backing from Egypt, the United Arab Emirates and France, Haftar’s forces slowly subdued their enemies in Benghazi, in grinding street fighting that lasted almost four years. Meanwhile, Haftar consolidated his authority in the east. In September 2016, he took over eastern Libya’s oil ports from rival militia leader Ibrahim al-Jadhran. Haftar allowed oil exports to resume despite the fact that the revenues were going to the central bank in Tripoli — a policy that won him praise from the NOC and Western governments, and helped strengthen his profile as a statesman. But, in meetings with Western ambassadors, Haftar railed against Kabir, accusing him of funding “terrorists.”
As Haftar’s forces expanded both in number and territorially, his need for funds grew, and his tolerance for the flow of revenues to Tripoli dwindled. In June 2018, Jadhran furnished the pretext for Haftar to challenge that arrangement. Jadhran seized the eastern oil ports in a lightning attack with dozens of four-wheel-drives, only to be driven out again by Haftar’s forces a week later. It was the third such attack on the oil ports in the space of 18 months, by varying coalitions of armed groups opposed to Haftar.
Once he was back in control, Haftar’s forces announced that the eastern oil facilities would henceforth be operated by the east-based parallel NOC, and demanded that Kabir be replaced. Yet, one week later, pressure from a U.S. administration worried about rising oil prices prompted Haftar to reverse his position and allow the Tripoli NOC to resume exports. To justify the U-turn, Haftar could point to a face-saver: a letter to the U.N. Security Council from the Tripoli-based prime minister, Faiez Serraj, demanding a financial review of both the Tripoli and the east-based central banks. Serraj had his own reasons to challenge Kabir, since the latter met Serraj’s requests for spending with stubborn austerity.
Haftar continued to advance, seizing control of southern Libya in early 2019, and his eventual ascension to overall power increasingly appeared inevitable. But his debt-based financial model was reaching its limits, as east-based banks neared bankruptcy. To facilitate his takeover, Haftar’s foreign backers sought to alleviate the financial pressures on him. French diplomats I met in February 2019 argued that the Tripoli government should quickly inject money into the southern regions Haftar had just captured and that any power-sharing agreement with Haftar had to include change at the central bank.
Ghassan Salamé, who, as the U.N. envoy from 2017 to 2020, met Haftar frequently, told me that Haftar raised the need for Kabir to leave in virtually every meeting. In the ill-fated negotiations over a power-sharing agreement that took place in early 2019, Haftar even proposed a replacement for Kabir: Farhat Bengdara, the last central bank governor before the 2011 uprising.
When Haftar launched a surprise offensive on Tripoli two months later, neutralizing Kabir was part of the plan. The French president’s adviser for Libya, Paul Soler, invited Kabir to a meeting at the Élysée Palace for the day of the attack, April 4, 2019 — thereby ensuring that Kabir would be out of the country. (Soler did not respond to requests for comment.) According to Kabir, Soler and a senior Emirati official who joined the meeting had no specific questions related to the central bank. Instead, they told him that arrangements had been made with militia leaders in Tripoli and that Haftar’s takeover would be complete within hours. They then asked him to meet again the next morning. Overnight, however, armed groups in the Tripoli area captured over 100 of Haftar’s soldiers, foiling their attempt to reach the city center. “When I met them the next day, the picture had changed. They were surprised, they had imagined — based on what Haftar’s people had told them — that his forces would enter smoothly.” Kabir returned to Tripoli the same day.
With Haftar’s forces settling in for a long fight over the capital, Kabir became a key target for foreign states seeking to negotiate a settlement favorable to Haftar. In the early months of the war, the Donald Trump administration tacitly supported Haftar’s offensive. According to Western diplomats at the time, the U.S. National Security Council under John Bolton was adamant that Kabir had to go. Haftar’s backers — France, the UAE and Egypt — shared that goal. “The Tripoli government has to make concessions to Haftar: dismantling militias and changing the board of the central bank,” French diplomats told me in October 2019.
Meanwhile, Haftar’s forces on Tripoli’s southern outskirts — now backed by mercenary fighters from Russia’s Wagner Group — continued to make incremental progress towards the central bank in the city center. While the physical prize remained out of reach, Haftar began lobbying foreign capitals on an alternative plan: depriving the central bank of oil revenues. In December 2019, Haftar’s son Belgasem and Farhat Bengdara, the former central bank governor, traveled to Washington to propose that an escrow account under international supervision be set up for oil revenue. But the Treasury Department opposed the idea, and the U.S. position on Kabir had softened after Bolton left the White House in September. Belgasem Haftar and Bengdara were unable to get face time with any senior officials.
To press his demand, in January 2020, Haftar shut down most of Libya’s oil production. Turkey had just begun intervening in earnest to support the Tripoli government against Haftar, who argued that oil revenues were paying for the Turkish intervention. But British diplomats who went to see him that month found him “obsessed with Kabir,” according to one member of the delegation.
In Tripoli, Kabir reacted to the oil shutdown by suspending payments of salaries and, in March, sales of foreign currency. This escalated tensions that had been brewing for years between Kabir and Prime Minister Serraj. While Haftar’s forces continued their shelling of Tripoli, the spat between Kabir and Serraj spilled out into the open. In April, Serraj spent the bulk of a 40-minute televised speech attacking not Haftar but Kabir: “I have tried to avoid a war of words with the Central Bank of Libya, but things have really crossed all lines.” Decrying Kabir’s unilateralism, Serraj called for the board of the central bank to meet — a frontal challenge to the exclusive authority Kabir had exercised over the bank for six years.
In late May, the Turkish intervention finally turned the tide. First the Wagner fighters and then Haftar’s forces hurriedly retreated from western Libya, drawing a new frontline through the center of the country that left them in control of most oilfields and export terminals.
But the slow detente that followed the war turned out to be a greater danger to Kabir than Haftar’s power grab had ever been. Tarik Yousef, a board member who had stayed loyal to Kabir, tried unsuccessfully to mediate between Kabir and Serraj, telling me that July that the two were still not on talking terms. Meanwhile, to get the oil flowing again, U.S. and U.N. diplomats sought to broker an agreement for revenues to remain embargoed in the NOC’s account at Libya Foreign Bank, a central bank subsidiary — but without any onward transfers to the central bank itself. They found allies in Serraj and NOC Chairman Sanalla.
When Serraj came out in support of the idea in August 2020, neither he nor the U.S. ambassador, nor U.N. envoy Stephanie Williams, had discussed the matter with Kabir. In September, oil production resumed, with revenue flowing into the NOC account, prompting a struggle between Kabir and Serraj over control of Libyan Foreign Bank. Kabir was increasingly isolated. “Kabir’s time horizon for everything he’s doing now is days and weeks,” a close collaborator of Kabir who asked to remain anonymous told me at the time.
Furious at being sidelined, Kabir leaked a “top secret” letter to Sanalla in which he accused NOC of having concealed billions of dollars in oil revenue “for years” instead of transferring them to the central bank. Sanalla hit back at what he called Kabir’s “failed policies” with an acerbic video address: “Where has all the money gone? One person controls everything. Who are you, brother? This chaos can’t go on. Until the central bank is reformed, you won’t see any money at all,” he barked into the camera.
Williams, too, vented her frustration with Kabir. “We’ve been pushing on a central bank board meeting for two years. Siddiq Kabir needs to go,” she told me that September.
The noose around Kabir was tightening.
The French Revolution, its detractor Jacques Mallet du Pan famously observed, devoured its own children. In what has become a recurrent pattern, once revolutionary upheaval has mobilized wide swaths of society, it tends to annihilate its agents in the struggles that follow.
The Libyan revolution has been no exception. Most members of the 2011 National Transitional Council (NTC), the revolutionary leadership, have long sunk into irrelevance or abandoned crisis-ridden Libya for a more comfortable life abroad. Exiles who returned to Libya in 2011 after spending decades overseas enthusiastically embraced the democratic transition, then left disillusioned as conflicts and corruption engulfed the country.
Many commanders in the revolutionary war against Gadhafi were killed or sidelined in the struggles that followed, prompting the rise of a younger generation of militia leaders. Former regime officials, after being exiled, imprisoned and ostracized by the revolutionaries in the years after 2011, have returned to the fore. The appointment of Abdelhamid Dabeiba as prime minister of a unity government in March 2021 has been the most conspicuous example. In the Gadhafi era’s final years, Dabeiba had grown rich at the head of a state-owned company. In eastern Libya, Haftar — who participated in the 1969 coup that brought Gadhafi to power but later joined the exiled opposition — has built a regime that eerily resembles Gadhafi’s: iron-fisted repression and blatant self-enrichment by Haftar’s sons, all draped in a grotesque personality cult.
Kabir is the sole top-level survivor from 2011. When the February 2011 revolution erupted, Kabir was in London, heading the local subsidiary of Bank ABC, whose majority owner is Libya’s central bank. He went to Benghazi and, with the support of influential figures from Tripoli, became one of six members representing the capital on the NTC. In September, after Tripoli had fallen but while the war was still ongoing, the NTC appointed Kabir as central bank governor. “If Siddiq Kabir leaves, the era of the February revolution will be over,” Abderrezaq al-Aradi, a prominent businessman and former member of the Muslim Brotherhood, told me.
Aradi’s assessment is not disinterested. He has known Kabir since childhood, having grown up in the same neighborhood near the Belkheir mosque in Tripoli’s Italian-built city center — only a few hundred meters from the central bank. In 2011, Aradi — like Kabir — was an NTC member for Tripoli, and he backed Kabir’s appointment as governor.
By the time Kabir joined the revolution, he had already proven his political acumen by surviving the vagaries of Gadhafi’s rule. In 1988, Gadhafi’s finance minister, Mohamed al-Bukhari, another childhood friend from the Belkheir neighborhood, introduced Kabir to an influential regime official, Saleh Ibrahim. (In 2021, the British High Court found Ibrahim jointly responsible for the fatal 1984 shooting of a policewoman outside the Libyan Embassy in London.) At the time, Kabir was in his mid-30s and had no experience in banking. But Ibrahim’s intercession with Gadhafi’s right-hand man, Abdesselam Jalloud, won Kabir an appointment as chairman of al-Umma Bank, one of Libya’s largest state-owned banks — “without the central bank governor so much as being informed about it,” Kabir told me.
Under Gadhafi, bank executives had to ensure they retained the goodwill of powerful figures, particularly high-ranking security officials and members of the Gadhafi family. Favoritism translated into an endemic problem of unpaid debts. In 1998, a scandal over hundreds of millions of dinars (at a time when the official rate of exchange was 2 to 3 dollars per dinar) embezzled by regime cronies erupted in eastern Libya. Gadhafi ordered the wholesale prosecution of several dozen executives at the country’s banks — among them Kabir and his deputy at al-Umma. Kabir spent 90 days in pretrial custody.
Among the accusations leveled against Kabir specifically was that al-Umma had accorded a large number of real estate loans on the basis of personal guarantees from the head of military intelligence, al-Khweili al-Hmeidi. Kabir’s lawyer in the case, Mohamed al-Alagi, told me that the accusation was hypocritical, since Kabir had no choice: “this was the way it worked.” Alagi demanded that al-Hmeidi be heard as a witness, prompting the judge to take fright and eventually clear Kabir.
In the broader case against Kabir and dozens of other executives, the court also initially cleared the accused. Kabir left for Tunis and began working at the local Bank ABC subsidiary. But then the case was brought before another court, and Kabir was sentenced in absentia to three years in prison. “I didn’t return to Libya for about a year while I appealed,” Kabir said. During that time, Kabir worked with a well-connected Libyan businessman named Mohamed Aqil, a long-standing friend whose businesses, as Kabir admitted to me, enjoyed the protection of Gadhafi’s intelligence chief, Abdallah Senussi. Eventually, the appeal court cleared Kabir of all charges, and he resumed his career at Bank ABC, promoted by Farhat Bengdara, the bank’s chairman who later became central bank governor.
After 2011, revolutionary hardliners turned that background against Kabir, castigating him as a Gadhafi regime crony — a potent smear in the first years after the ancien regime’s demise. But as power struggles divided the former revolutionaries, the line of attack changed. “When I arrived, people complained about Kabir being pro-Gadhafi. Later, they started saying he was a Muslim Brother. So which is it?” asked Deborah Jones, the U.S. ambassador from 2013 to 2015. Kabir himself portrays himself as the victim of defamation campaigns by “those who want to seize what’s inside the central bank,” as he told me.
The allegations that Kabir and everyone around him were held in place by Libya’s Muslim Brotherhood would mount for years. They were pushed by the Egyptian and Emirati governments, who saw their own countries’ Brotherhood wings as the primary threat to regime stability and led a regional propaganda campaign to demonize the group. During Haftar’s Tripoli offensive, French and U.S. diplomats made the charge their own.
The evidence fueling such suspicions was often flawed. There was the recurrent claim that one Tripoli NTC member who had backed Kabir’s appointment as governor, Abderrezak al-Mokhtar, was a Muslim Brother — when in fact he was not. While one senior central bank official, Fathi Aqub, is indeed a member of the group, his colleague Mustafa Manea merely has a brother who is, but on that basis Manea has been branded a member himself.
Kabir’s enemies also made much of the fact that, in 2011, he had been one of three directors of a company registered in the U.K., the other two being a prominent cleric close to the Brotherhood, Ali Sallabi, and Ibrahim Dabeiba, a relative of the later Prime Minister Abdelhamid Dabeiba. But according to Abderrezak al-Aradi, Kabir’s childhood friend and a former Muslim Brother, he himself had set up the company to manage shipments of humanitarian supplies to rebel-held areas and had asked Kabir and Dabeiba because he needed two U.K. residents for registration. Kabir confirmed this account, insisting that he knew neither Sallabi nor Dabeiba at the time.
Rather than relying on any particular faction, Kabir has survived by constantly adapting his political network. The 2014 split allowed him much leeway in navigating Libya’s shifting landscape. It is the legislature that appoints the central bank governor, but western factions have contested the east-based Parliament’s legitimacy, preventing it from toppling Kabir.
The political agreement signed under U.N. auspices in late 2015 requires the east-based Parliament to agree with its Tripoli-based rival, the High State Council, on replacements for Kabir and other top officials. The east-based Parliament’s unilateral appointment of a replacement to Kabir fell flat in December 2017. Several unsuccessful attempts by both bodies to hammer out a deal followed over the years. The latest failed at the end of 2022, due to reluctance among members of the High State Council.
Kabir is widely alleged to have cultivated allies in both the High State Council and the east-based House of Representatives, transcending all political divides. The former chairman of the High State Council, Abderrahman al-Sweihli, told me in a 2021 interview that Kabir had assembled “lobbies” in both bodies. Sweihli said that the recurrent threats by parliamentarians to replace Kabir amounted to a form of extortion aimed at securing access to funds.
A former close collaborator of Kabir’s told me that members of the east-based Parliament recurrently came to see the governor to solicit favors. (When I met Kabir in 2018, a parliamentarian from eastern Libya was just leaving his office.) In 2017, Libya’s audit bureau accused the head of the Parliament’s finance committee of being Kabir’s “personal companion in all meetings” and of having interceded with the bureau on behalf of companies engaging in letters of credit fraud. According to minutes of a 2017 meeting between Kabir and parliamentarians, the governor gave the head of the economics committee a say in the allocation of letters of credit in the east.
Kabir’s pragmatism in dealing with Libya’s political divisions has allowed him to hold on to his position even when everyone appeared to have turned against him.
By December 2020, Kabir was under pressure from all sides. Prime Minister Serraj, NOC chief Sanalla and the U.N. all agreed to bypass him, depriving the central bank of oil revenue. In this precarious situation, Kabir held a board meeting with Ali Hebri and the other east-based members — the first since 2014. “Serraj and Sanalla were putting Kabir in a corner.
By reaching out to Hebri, Kabir called their bluff,” a close collaborator of Kabir told me at the time. The board agreed on devaluating the dinar and extending credit lines as well as access to foreign currency to several east-based banks. Over the following year-and-half, Kabir drew Hebri into a protracted process ostensibly leading to the central bank’s reunification. The process eventually failed but, as it ran its course, it deflected much of the international pressure Kabir had faced.
In parallel to the rapprochement with Hebri, Kabir discreetly weighed into the U.N.-led negotiations over the formation of a unity government to replace both Serraj and the eastern parallel authorities. He conducted backchannel talks with parliamentarians and, according to one person present in the meetings, held out his cooperation as the trump card for any prospective prime minister they would support.
The U.N.-led talks in February 2021 designated Abdelhamid Dabeiba as prime minister, amid allegations that Dabeiba’s relatives had bribed several negotiators. To the surprise even of optimistic foreign observers, the east-based Parliament endorsed Dabeiba’s government, which thereby became the first unified Libyan administration since 2014. Sanalla resumed the NOC’s transfers of oil revenue to the central bank, which funded Dabeiba’s public investment projects and generous raises of civil servants’ salaries. Dabeiba reached out to Kabir almost immediately after his designation. Instead of his enemy Serraj, Kabir now had an ally at the prime minister’s office.
For several months, Kabir put his close alliance with Dabeiba on open display. He appeared with Dabeiba at a youth forum, where the prime minister announced extravagant grants to help young couples marry. Dabeiba suddenly became immensely popular. When, in October 2021, I pointed this out to the head of the High State Council, Khaled al-Meshri, he countered: “The only thing Dabeiba has succeeded in is unlocking access to the central bank. Kabir always refused requests from previous governments. As soon as Dabeiba arrived, he began disbursing funds.”
But soon, Dabeiba’s star faded, and Kabir took his distance. Fathi Bashagha, the Misratan power broker who had repeatedly told me that Kabir had to leave, gained Haftar’s backing to form a new government in early 2022. In a tense standoff that lasted for months, Bashagha and Dabeiba both courted armed groups in and around the capital. By August, Dabeiba had warded off the Bashagha government’s final attempt to take office in Tripoli. There, Dabeiba has since cemented his hold, but the Bashagha government remains active in the east and is reportedly reverting to raising funds through the Benghazi-based central bank. The rivalry has returned Libya to its chronic state of division and upended the protracted process of central bank reunification.
Kabir, meanwhile, resorted to his erstwhile austerity policies, largely reducing government spending to payments of salaries and subsidies. At least initially, he maintained ambiguity towards Dabeiba and Bashagha, as well as the goodwill of the U.S. and U.N., which were alarmed over reports that Dabeiba was handing out checks to militias to keep himself in office. Under U.S. pressure, Kabir also began publishing far more detailed data on government spending. Throughout the spring, armed groups in the capital puzzled over Kabir’s position in the struggle between Dabeiba and Bashagha. “Whomever Kabir supports will be prime minister,” one militia leader told me in May. But Kabir was inscrutable. “It is a waiting game for him,” a close collaborator of Kabir said.
As Bashagha lost his tug-of-war with Dabeiba, Kabir again moved closer to the winner, though without loosening the purse strings. His caution may go a long way to explaining Kabir’s political longevity. “He is an expert at reading the landscape, at riding the wave to stay in power,” Hammuda Siala, a parliamentarian who had taken his distance from politics since Dabeiba’s rise, told me. U.S. officials, conscious that their recognition helped keep Kabir in place, have been consistently frustrated by his resistance to their reform proposals. “He was polite, listened to our advice, but was extremely cautious — apparently worried that if he made big changes of any kind, he would be at risk of being pushed out,” Jonathan Winer, the U.S. Special Envoy from 2014 to 2016, said.
Kabir’s detractors often describe him as all-powerful and overbearing. “He controlled everything, interfered in everything: the government budget, who gets letters of credit,” one of Serraj’s former ministers told me. (Indeed, Kabir’s power was evident in the sheer number of people interviewed for this article — bankers, parliamentarians, government officials — who asked to remain anonymous.)
Behind the appearance of omnipotence, however, a more complex picture emerges, one that highlights Kabir’s readiness to strike arrangements with political adversaries when needed, as well as his cautious, temporizing modus operandi. Among Kabir’s traits, it is his fundamentally ambiguous, sphinxlike character that perhaps best captures his politics.
Even senior foreign diplomats who regularly met Kabir concede that he remained a mystery to them. He is neither the ultimate barrier against the pillage of the Libyan state, as he himself maintains, nor the biggest culprit behind its crisis, as his enemies say. Yet even many of his critics, acknowledging his austerity, grudgingly accept his claim to have helped save Libya from bankruptcy and reliance on foreign loans.
Kabir’s ambiguity mirrors many of the contradictions of post-Gadhafi Libya — contradictions he has contributed to shaping: the state’s financing of the competing factions vying for its control; the constantly shifting alliances; the collusion between ostensible political adversaries in perpetuating the country’s crisis. The only event certain to conclude his tenure is a settlement ending Libya’s conflicts.
***
Wolfram Lacher is a senior associate at the German Institute for International and Security Affairs and the author of “Libya’s Fragmentation”
_______________
