Jack Dutton
The bank’s head of information technology was abducted on Sunday morning but returned hours later.
Libyan authorities unsuccessfully tried to dismiss the central bank governor on Sunday, and the lender had to pause operations that day after its head of information technology was abducted in Tripoli amid a power struggle at the financial institution.
The Central Bank of Libya announced the pause on social media Sunday, saying Musab Msallem, the bank’s head of IT, “was kidnapped by an unidentified group from his house this morning.”
The central bank, which operates independently of the Tripoli-based government, said it would not resume operations until Msallem was released and added that other senior officials had been “threatened with abduction.”
“The bank rejects the mob-like methods that are practiced by some parties outside of the law,” it said in a statement.
The bank provided no further information about the kidnapping, but in a brief statement Monday afternoon, it said Msallem had been returned and was “safe.” Msallem has been at the central bank for nearly five years and has held different positions in the lender’s IT department, including in fintech and innovation.
What happened
Sunday’s kidnapping came a week after an armed group laid siege to the central bank’s headquarters in Tripoli, which US Special Envoy to Libya Richard Norland later described as an attempt to oust Sadiq al-Kabir, the bank’s governor.
The Central Bank of Libya has an account that holds the revenue collected from the oil produced in Libya — one of the most energy-rich countries in the Mediterranean. The bank is the only internationally recognized depositary for the country’s oil revenues. Libya, which is part of the OPEC group, holds the highest crude oil reserves on the African continent at an estimated 50 billion barrels.
Kabir has been criticized over the last decade for his management of these revenues and the state budget. He was embroiled in a public dispute with former Libyan Prime Minister Abd Alhamid Aldabaiba, an ally of the state-owned National Oil Corporation, over how to spend crude-rich Libya’s petrodollars.
Karim Mezran, a resident senior fellow and director of the North Africa Initiative of the Rafik Hariri Center & Middle East programs at the Atlantic Council, said that, according to Libyan officials he spoke to, Msallem was taken by members of the Libyan Secret Service.
“They wanted to get information and other things from him,” Mezran told Al-Monitor.
The Presidential Council, an internationally recognized governing body based in Tripoli, said Sunday in a statement that did not mention the suspension of operations that it was replacing Kabir and the board in a bid to guarantee “financial and economic stability.” But the council has no jurisdiction to dismiss Kabir, and he remains in his role.
Hafed al-Ghwell, senior fellow and executive director of the North Africa Initiative at the SAIS Foreign Policy Institute at Johns Hopkins University, noted that the central bank has control of much of Libya’s revenues. “It’s the oil money through the central bank that pays for 90% of all expenses, salaries and imports for Libya,” he told Al-Monitor.
Kabir spoke with British Ambassador to Libya Martin Longden on Monday, and the envoy “expressed the full support of the United Kingdom to the Central Bank of Libya in its prominent role over the past years in maintaining financial and economic stability and preserving the country’s values,” according to a statement on the bank’s Facebook page.
After Msallem’s release, Kabir convened a meeting in his office Monday with several other bank directors about resuming operations. The central bank is now fully functional.
Why it matters
Libya is split between the internationally recognized Government of the National Accord headed by Abdul Hamid Dbeibah in the west, and a rival in the east, the Libyan National Army, led by strongman Khalifa Hifter. Most of the oil fields are found in the eastern part of the country, though the rival governments mostly share oil revenues.
If the central bank suspended its activities for several days, it would have a disastrous impact on Libya’s economy. At least 80% of Libya’s population relies on a monthly check and subsidies from the central bank. If the bank stops operating, many Libyans wouldn’t be able to buy food or other staples.
Outside reactions
Ghwell said that Kabir was shrewd to suspend the bank’s operations after the kidnapping because it meant that no one got paid, including private banks, forcing the kidnappers to release Msallem within hours.
“The bank governor has to be more than a banker in Libya, as the political situation is so fragile. The current governor has managed to keep things going moderately well, given the difficult political situation of the country,” Ghwell said.
The United States and other international institutions are supportive of Kabir, Mezran said.
“He is supported by the international community, including the Europeans and the International Monetary Fund — everybody relies on him. Therefore, attempts to undermine his authority, done in an illegal way like this, will always backfire,” he added.
Washington has stressed that it would defend the unity and independence of the Central Bank of Libya. “Disputes over distribution of Libya’s wealth must be settled through transparent, inclusive negotiations toward a unified, consensus-based budget,” said Norland last week. However, Libya is not high on the US government’s agenda right now, with wars in Gaza and Ukraine as well as the upcoming presidential election taking precedence.
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Jack Dutton is Al-Monitor’s Chief Business Correspondent, based in the UK. He has written for Newsweek, AFP, African Business, Al Jazeera, Devex, The Economist, The Guardian and other publications.
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