Archive - May 2025

Emadeddin Badi and Wolfram Lacher

Prime Minister Abdelhamid Dabeiba has set off a series of events destabilizing western Libya, but the structural forces behind the country’s wider stalemate remain strong.

On May 13, Libya’s prime minister, Abdelhamid Dabeiba, and his closest allies were triumphant. The night before, Abdelghani “Ghnewa” al-Kikli, the city’s most powerful militia leader and, until recently, a key pillar of Dabeiba’s rule, was shot dead at a meeting with government officials. Within hours, Ghnewa’s forces collapsed, his lieutenants fled Tripoli and units aligned with Dabeiba seized his territory.

For a fleeting moment, it looked like Dabeiba had eliminated a key rival and taken a major step toward consolidating control in Tripoli. The next day, Dabeiba’s hold on power was at its weakest since taking office in 2021. Heavy fighting had engulfed the capital overnight, and Dabeiba was widely held responsible.

Libya’s capital has seen endless twists and turns since the demise of the Gadhafi regime in 2011. But this dramatic reversal was extraordinary even for Tripoli. In its wake, a fragile ceasefire took hold that could easily break down again. Dabeiba’s authority has been shaken to the core.

He long sought to present himself as the guarantor of stability and security in the capital. Indeed, clashes became increasingly rare after he warded off initial challenges to his rule. Now, the image he cultivated lies in tatters, and he is the focus of popular anger. Could the unintended consequences of Dabeiba’s power grab finally undo Libya’s political stalemate?

Until he was shot in the back of the head at the Tekbali military base on May 12, Ghnewa was among the biggest beneficiaries of Dabeiba’s rule. Dabeiba had been appointed as head of a unity government under a U.N.-led process in March 2021, ostensibly to oversee an interim period until elections that were scheduled for December of that year.

When those elections were canceled, Dabeiba’s western Libyan opponents allied with the warlord Khalifa Haftar, based in the eastern part of the country, to form a new government. But Dabeiba prevailed in Tripoli, confining the rival administration’s sway to Haftar’s territory. He did so by exploiting fears of Haftar taking power and by buying the loyalties of western Libyan armed groups. Key to this was Ghnewa, a former baker who had formed a militia in 2011 and gradually turned it into a major force. Ghnewa’s territory just south of Tripoli’s city center was a mere stone’s throw from the seat of the prime minister. 

In exchange for their support for Dabeiba, Ghnewa and a handful of other militia leaders received more than lavish funding. They gained unprecedented sway over state institutions by appointing figureheads to oversee the plunder of funds in ministries and state-owned companies. Alongside Dabeiba’s nephew Ibrahim Dabeiba — widely seen as the real power-broker behind the prime minister — they also built direct ties with Haftar’s sons and routinely brokered arrangements over key positions and institutions. 

Relations among the key players in Tripoli were not devoid of tensions. But most shared an interest in the survival of a government that enabled them to accumulate power and wealth. This required keeping the peace in the capital, allowing the prime minister to claim that he had delivered Tripoli from the recurrent clashes it had seen for years. Meanwhile, the city’s militias tried to build a reputation as professional security forces, with some succeeding more than others.

For several years, the Dabeibas juggled competing demands from Haftar and western Libyan militia leaders, allowing Ghnewa’s associates to take over security institutions such as the domestic intelligence service. As Ghnewa’s power grew, managing him became increasingly difficult for the Dabeibas and their allied commanders. In August 2024, Ibrahim Dabeiba relied on a force led by a Ghnewa lieutenant to oust the long-serving central bank governor.

But that force subsequently monopolized control of the central bank and protected the new governor, bringing him under Ghnewa’s influence, much to the Dabeibas’ dismay. Ghnewa also made outsized demands to place his proteges in key ministerial positions, threatening to throw his support behind the formation of a new government. Meanwhile, he aggressively expanded his share of spoils from fraud in sectors ranging from imports of medicine to oil and telecommunications. 

As Ghnewa’s relations with the Dabeibas soured, he mended ties with another major force in Tripoli: the Special Deterrence Force (SDF), headed by Salafi-leaning commander Abderrauf Kara. The SDF and its affiliates controlled the capital’s airport and vast swathes of eastern Tripoli, and exerted considerable influence within state institutions. Kara had played a key role in helping Dabeiba retain power at critical junctures, but he grew increasingly alienated over time, frustrated by what he perceived as meager returns for his support.

The Dabeibas had begun favoring leaders of other factions. Ghnewa was among them, as were Abdesselam Zubi of Brigade 111 and Mahmoud Hamza of Brigade 444 — the latter a former Kara lieutenant turned bitter rival. And these groups had begun to curb SDF influence, most drastically at the central bank, where the SDF had for years maintained a strong presence. 

The turning point came when Ghnewa compelled the SDF’s withdrawal from the central bank to assist the Dabeibas in ousting the governor. Ironically, that episode’s aftermath brought Kara and Ghnewa into an uneasy alliance, forged by their respective roles in derailing the Dabeibas’ bid to assert control over the central bank. By late 2024, the two had found a common purpose: to guard themselves against threats from the Dabeibas and their closest allies.

In April, the joint force from Dabeiba’s native Misrata began sending convoys of armed vehicles toward Tripoli. Its objective remained unclear, and rumors suggested it had prepared an attack on the SDF. Yet many dismissed the idea that Dabeiba would initiate hostilities and thereby shatter the capital’s tranquility he so cherished.

But in early May, tensions between Ghnewa and the Dabeibas escalated when Ghnewa’s men abducted two top executives at Libya’s state telecommunications holding, a cash cow that Dabeiba had used as a slush fund. In the following days, convoys began converging on Tripoli from Misrata, Zawiya and Zintan, foreshadowing an imminent escalation. 

On the evening of May 12, the news that Ghnewa had been shot dead spread like wildfire across Tripoli, along with pictures of his blood-stained body. It quickly emerged that he had been killed at the headquarters of Brigade 444, during a meeting to which Hamza had invited him. Hamza has since suggested that his killing happened after Ghnewa’s men raised their weapons at their hosts.

But the speed with which Brigades 444 and 111 took control of Ghnewa’s stronghold in the Abu Salim district right after the killing clearly indicates a well-planned operation. Dabeiba himself lauded the campaign for its success in speedily routing Ghnewa’s forces with minimal immediate harm to civilian lives or property. 

The ease with which they had eliminated a major rival must have surprised the operations’ architects themselves. The next day, they sought to build on the momentum to move against the SDF. To that end, Dabeiba issued a series of decrees dissolving units affiliated with both Ghnewa and the SDF. Among those targeted was the Judicial Security Apparatus, a powerful SDF affiliate led by Osama Njeem, who faces an arrest warrant from the International Criminal Court.

Other units were integrated into the Interior Ministry headed by Emad Trabelsi — a close Dabeiba ally from the town of Zintan. The Ghnewa associate heading the domestic intelligence service was replaced by an appointee from Zintan and a deputy from Misrata. For Kara’s SDF and other armed groups in greater Tripoli, the message was clear: Dabeiba was centralizing control and empowering Misratan and Zintani actors at their expense.

Even as Dabeiba and his allies touted their victory against what they now described as rogue militias, a different picture took shape. Clips of looting in Ghnewa’s former stronghold of Abu Salim spread on social media. Many of the worst excesses were the work of the General Security Apparatus, a Zintani-led force commanded by the interior minister’s brother. The same force later looted Tripoli’s port and even attempted to break into the vaults of the central bank. Its acts galvanized public outrage and shattered Dabeiba’s narrative. 

This combination of overreach and misconduct directly strengthened the position of the SDF. Kara seized the opportunity to widen his coalition, reaching out to factions in several Tripoli districts as well as the neighboring city of Zawiya. Although most stopped short of open military engagement, many began hedging, positioning themselves to join the fray should momentum shift away from the government.

Instead of consolidating control, Dabeiba’s moves ignited urban warfare. Tensions came to a head on the evening of May 13, during the attempted handover of positions previously held by the Judicial Security Apparatus to Mahmoud Hamza’s Brigade 444. The transfer was a highly sensitive matter, as both forces had heavily clashed before, and Hamza’s long-standing animosity toward Kara was no secret. Fighters affiliated with the Judicial Security Apparatus backtracked on the agreement to surrender their positions, triggering localized clashes that quickly escalated across Tripoli.

The SDF began targeting Brigade 444, which was left to fend off its advances with little support from Dabeiba’s other key allies — Brigade 111 and the Misrata joint force. Within hours, Tripoli plunged into chaos: Street battles erupted in densely populated and affluent neighborhoods, improvised drone-borne explosives struck military camps, and the SDF and 444 rampaged throughout the capital. Forces from Zawiya entered Tripoli from the west, drawing Dabeiba-aligned forces into a defense on multiple fronts. 

For a brief moment, the fighting looked like it could escalate into a protracted urban war. But by noon the following day, a fragile ceasefire had been brokered, halting the clashes as suddenly as they had erupted. The shifts on the battlefield revealed a mixed picture. The SDF had defended its exposed bases in southern Tripoli but had been compelled to retreat from key positions in the city center, including the port. However, not all of the SDF’s lost territory was now held by forces loyal to Dabeiba. Neutral forces from Misrata had deployed to separate the opposing coalitions in some of the most critical locations, including around the central bank.

Far more consequential than the shifts in territorial control during the fighting was the latter’s political fallout. The sudden throwback to the capital’s worst days shocked Tripoli’s residents. Public dismay focused on Dabeiba and on Brigade 444, which had previously cultivated a reputation for disciplined security provision, but now bore the brunt of the blame for the clashes’ excesses. 

On Friday, two days after the ceasefire was reached, protests erupted on Martyrs’ Square. They reflected a volatile blend: genuine civic frustration with state failure and militia impunity, mixed with the calculated presence of provocateurs aligned with Dabeiba’s political rivals. For much of the day, the demonstrations remained peaceful and focused. But by dusk, the mood shifted. Provocateurs directed protesters toward the seat of the prime minister and attempted to storm it. They were dispersed with live ammunition. Meanwhile, ministers associated with the SDF and other anti-Dabeiba armed groups resigned, their announcements timed to trigger a domino effect that failed to materialize.

The crackdown on protesters was a turning point. On the one hand, it provoked another wave of public anger against Dabeiba. On the other, it allowed Dabeiba to portray the unrest as coordinated subversion. Clearly, however, the line between grassroots mobilization and factional manipulation had been crossed. With these events, the conflict shifted into a new phase — a battle of narratives.

For a moment after the protests, there appeared to be an opening, a chance to challenge Dabeiba’s power with both political initiative and popular credibility. But the moment slipped. The protests lost momentum, and the rival camp’s chronic weaknesses resurfaced. Divided by geography, ambition and deep mistrust, the opposition lacked the unity and the legitimacy to present a compelling alternative.

Dabeiba’s greatest strength lies not in the alliance backing him, but in the incoherence of those seeking to replace him.

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Emadeddin BadiEmadeddin Badi is a consultant and senior fellow with the Atlantic Council and the Global Initiative Against Transnational Organized Crime

Wolfram LacherWolfram Lacher is a senior associate at the German Institute for International and Security Affairs and the author of “Libya’s Fragmentation”

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Karim Mezran and Roberta Maggi

The past fortnight has shattered perceptions of stability in Libya, unveiling deep fractures within its political, security and economic state and non-state apparatuses.

The May 12 assassination of Abdul Ghani al-Kikli, prominent leader of the Stability Support Apparatus (SSA), triggered large-scale urban confrontations between rival armed factions, but this came as no surprise. The escalation occurred against the backdrop of powerful semi-state armed factions, duplicated executive and legislative institutions alive long past their mandate, an absent judiciary, a nationwide economic crisis, and pervasive corruption. 

Coalitions formed on the basis of affiliations to the Government of National Unity (GNU) on one side, and Special Deterrence Force (SDF) on the other, drew in militants from Tripoli and beyond, bringing to light grievances and mistrust accumulated over years of fluid, ever-changing, short-term security arrangements and international neglect.

Indeed, the notion that the dual status quo could endure since the 2020 Ceasefire Agreement between the military factions of the then-Tripoli-based Government of National Accord (GNA) and the Benghazi-based Libyan Arab Armed Forces of Khalifa Haftar, with its multiplied leaders unchecked, can no longer hold in public discourse.

Countrywide divisions are also resurfacing as Tripoli grapples with its own, with chaos in Libya’s capital creating an ideal battleground for those seeking to achieve nationwide domination through military means.

Beyond the ballot box

Currently envisaged solutions to Libya’s crisis feel like a band-aid on a gunshot wound. Crisis appears to be brewing as tensions deepen and fears mount of further violent escalation in urban areas. The United Nations and the Presidency Council launched a truce committee to negotiate a local ceasefire and interim security arrangements in Tripoli, whose influence over peace enforcement in practice is, however, limited at best. At the same time, the House of Representatives, whose members were last elected in 2014 and have long overstayed their mandate, seized the opportunity of undermining the also-entrenched GNU and launched its own process for forming yet another executive.

The international push for elections in 2021 was seen as the most promising avenue towards stability. However, as the ballot box was never opened, the profound depth of Libya’s legitimacy crisis across all existing executive and legislative institutions perdures today. Indeed, no single individual or institution in Libya would be able to meaningfully bring the country to elections without due process and international backing.

What’s more, any attempt at the implementation of new political arrangements amid the current escalation risks resulting in more violence, including towards civilians. Peace enforcement, therefore, rises to the front as the utmost imperative for the international community in the short term, while paving the way for a complete political overhaul in the medium term.

While it’s clear that an international agreement is needed to support Libyans in reversing current negative trends and overall escalation, no single external actor can be a viable mediator without multilateral backing. While in other contexts, the United Nations could consider deploying an international peacekeeping mission, permanent members’ interests at the Security Council amid changing Mediterranean geopolitics would likely lead to a deadlock and the use of veto power(s) for such an initiative.

A way out of the current institutional blockage—Libyan and multilateral—must therefore rely on other pathways to multilateral cooperation.

With the United Nations gridlocked and unilateral interventions only deepening Libya’s divides, the question of who, if anyone, could credibly enforce peace looms large. Egypt, despite its strategic clout and dual membership in the African Union and League of Arab States, is too closely aligned with eastern factions to lead.

Turkey is disqualified on similar grounds, its deep entrenchment in Tripoli rendering it a partisan actor, despite recent meetings suggesting a possible rapprochement with Eastern factions. While symbolically inclusive, the Union for the Mediterranean lacks both Libya’s full participation and any enforcement teeth.

The European Union, though equipped with resources, remains hamstrung by internal divisions and a migration-centric agenda. Meanwhile, the Security Working Group—gathering key Western and regional actors—has political weight but no mandate. As Libya’s instability never stays within its borders, its African and European neighbors remain most exposed to renewed spillovers, while none of the major external backers, from Russia to Turkey, ultimately benefit from continued escalation.

Breaking the stalemate

This begs the question: What might peace enforcement look like in Libya’s current politico-security landscape? The question is complex, given the internationalized nature of interest-based politics hampering Libya’s stability.

Given these limitations, few paths can be deemed viable for the weeks ahead. For the proponents of traditional multilateral approaches to peacebuilding, the most viable path forward may lie in a time-bound African Union-led initiative, co-endorsed by the League of Arab States, and supported by a coordinated diplomatic and operational role for the European Union and Egypt.

The Security Working Group could serve as the core forum where such a framework is negotiated and designed, leveraging its existing membership and political clout. A hybrid mechanism of this kind, though likely to require extensive negotiations in its inception, could prove successful in beginning to reverse escalation and lay the groundwork for a more durable political—and peace—process.

For the proponents of rapid bilateral solutions, another path could be relying on a smaller coalition of involved States to intervene with the goal of keeping peace. A riskier but faster-to-deploy setup could for instance involve the likes of Turkey, Egypt, Algeria and a southern European State—one that is agreeable to the United States—in an interim entente of influence over Libyan stakeholders (and spoilers), each deterring them from further escalation until a new political process takes form.

While constraints faced may hamper its effectiveness, the United Nations and its support mission must remain central in any process, as the holders of Libya’s peace negotiations and guarantors of international legitimacy. Indeed, while both paths proposed may help break the current stalemate (albeit with different risk levels), they must be designed as a bridge, not an alternative, to a reinvigorated UN-led political track.

Given the financial strain the UN system has faced in recent months, the proposed interim models could offer a much-needed breathing space to reassess, alongside key partners, the trajectory and structure of the process ahead.

Ultimately, Libyans must define the terms of their political future, which will require more than elections alone. With all major political institutions mired in crisis, a renewed approach could involve sequencing parliamentary elections first, under a model in which executive authority is shaped by parliamentary legitimacy. A technocratic, legitimacy-grounded constitution-writing process could then follow.

Crucially, a new oversight phase must be introduced—one that is multilateral, time-bound, and rooted in local ownership—to shield the process from spoilers, prevent backroom power grabs, and guarantee that implementation matches intent. Only then can a political transition begin to gain the resilience Libya so urgently needs.

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Karim Mezran is a Resident Senior Fellow and director of the North Africa Initiative at the Atlantic Council.

Roberta Maggi is an Associate Fellow at the Center for Applied Research in Partnership with the Orient (CARPO).

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Russia, Libya and the Kremlin’s playbook

for fragile states

Tarek Megerisi 

Glimpsing the sunlit uplands

The Russia-Haftar vision began to take form over 2024. Over the first three months of the year, 1,800 Russian soldiers were deployed to Libya as well as special forces teams. Some of these then moved onwards in service of Russia’s new relationship with Niger’s military junta. Russia’s presence swelled as thousands of soldiers, trainers and other support staff reportedly began arriving.

Although some of these were again deployed elsewhere in Africa, this was a significant escalation, as Wagner’s presence had previously been an estimated 2,000 operatives. New training camps have been set up across Libya along the new front line in places like Waddan, further south at Brak al-Shati[25], and amid Benghazi’s hub of military bases. All of which suggests that the LAAF is getting the training Haftar requested. There were also renewed joint-exercises around the Sirte frontlines in mid-March. Dubbed “Dignity Shield 2024”, these showed off the vast array of Russian equipment such as Pantsir surface-to-air missile systems, Mi-35 attack helicopters, and T72 tanks[26] received in violation of the UN arms embargo.

By late spring 2024, Russia had begun to reap the rewards. Brak al-Shati airbase was being expanded, and Libya’s role as a hub enlarged. In early April, Russian naval vessels the LSS Aleksandr Otrakovsky and Ivan Gren were tracked going from the Syrian port of Tartus to Tobruk, where Russian equipment ranging from towed artillery, to rocket launchers and armoured personnel carriers was then offloaded. In July a cargo ship, Ursa Major, was seen taking the same route, and the My Rose (carrying Russian military trucks) was tracked in August.

But the new Haftar-Russian relationship is not just a military one. Despite Wagner’s transformation into an official Russian presence, there is no sign that smuggling has abated. Between April 14 and May 12 2024, Benghazi received 300 million litres of diesel, six times more than Tripoli—even though the capital serves roughly a third of Libya’s entire population. This demonstrates how Libya is financially vital to Russia, as well as logistically vital to the Africa Corps regional mission.

Alongside this, the Russian connection is building up the LAAF as a diplomatic centre for the Kremlin’s Africa cluster. In the wake of Russia’s new relationship with Niger, Haftar immediately reached out to increase security cooperation with the junta, particularly on migration issues.  This was followed up by a regional tour from Saddam Haftar in summer 2024, including visits to Ouagadougou in July and then Niamey in September, suggesting that Libya may even formally join the Sahelian diplomatic expression of the entente roscolonial: the Alliance of Sahelian States.

These visits also led to a flourishing of cross-border cooperation between Saddam, Chad’s president Mahamat Déby, and Niger’s junta. This involves working with Niamey trying to stop the free movement of Touareg separatists who are causing Russia such grief in Mali, and closer cooperation in cross-border smuggling of everything from people to cocaine. Similarly, cooperation between the LAAF and Chad on managing fuel and gold smuggling in their cross-border regions is deepening. This highlights how Saddam is passing on his lessons, helping Russia give both Niamey and N’Djamena[27] their own version of its “domestication” process in Libya itself.

Formalising the formalisation

Moscow has also been building bridges throughout western Libya since re-opening the embassy in Tripoli at the start of 2024. Its ambassador, Aydar Aganin, an Arabic speaker who formerly headed up Russia Today’s Arabic language service, has been active building formal Russian connections across the country’s west. His deployment is the Libyan expression of the diplomatic component of Putin’s post-2022 Africa strategy: to appoint senior ambassadors with regional experience and links to the intelligence services across the Maghreb states.

As Saddam Haftar moved troops westward in August, western Libyan military leaders feared that key Tripoli-based groups would choose to deal with rather than fight the LAAF this time around. With Turkey now working more closely with the UAE and Russia—not just on Libyan energy with the Haftars, but on Sahelian security with other members of the entente roscolonial—they also questioned whether Turkey would support them once more. But Russia’s new relationships have cracked some of its older ones.

As Saddam sought to take the Ghadames basin on Libya’s southwestern border with Algeria, the last set of oil fields outside Haftar’s control, Algiers pushed back hard. Russia had tried to lay the diplomatic groundwork in Algiers, only to have its request to turn a blind-eye to Haftar’s move rejected. But Algeria also communicated it would intervene if Haftar moved on western Libya. This is indicative of a worsening relationship between Moscow and its oldest regional ally, which has also voiced concern over Russian weapons deliveries to Mali.  

Domestication in the roscolonial

As Libya demonstrates, this late stage of the Russian relationship looks rather colonial. As in Assad’s Syria until last December, it comprises a brutally oppressive militarised regime that needs to be propped up by Moscow and other partners like the UAE. This helps compensate for the regime’s lack of domestic legitimacy and is fully geared towards extracting wealth from the country. Syria was a rare example of how this all ends. Eventually the parasitic dictator hollows out his country to such a degree it is no longer able to support him, leading to implosion.

Despite not having legal authority, Haftar has enough de-facto power to allow Moscow to develop a meaningful proxy and seize Libyan assets. And Russia’s influence is not limited to Libya’s east. Its vision resonates with Libya’s elite, helping Moscow stand out from an international crowd that has become increasingly disaffected and distracted. The country is thus now waving many red flags of “Syrianisation”: the catastrophe in Derna, the carve-up of the oil industry, and the transformation of Libyan state and security systems into what are effectively smuggling mafias.

The process that Russia has followed in Libya looks to be turning into a production line. Chad’s Déby and Niger’s Tchiani, for example, are both developing close relations with Moscow. They are also both supported by the LAAF, and new smuggling and criminal synergies have emerged between all these parties. Indeed, across the coup belt and in Sudan, Russia has tried—not successfully so far—to fill European security vacuums to serve its own interests. But it needs its Libyan linchpin to support these operations.

To remove it, Europeans will have to dust off a tool that may seem quaint in this age of Western-enabled ethnic cleansing in Gaza and European migration deals with warlords in Libya: working to enforce international norms. Russia was able to embed in Libya to such an extent because the international community seemingly gave up on norms around the country—such as defending the arms embargo, fighting illicit oil sales, and empowering a political process. This created another vacuum that Russia is filling and pushing to expand. But the story of Russia in Libya holds other lessons, too.

***

Tarek Megerisi is a senior policy fellow with the Middle East and North Africa programme at the European Council on Foreign Relations. His work mainly addresses how European policy making towards the Maghreb and Mediterranean regions can become more strategic, harmonious, and incisive—with a long-term focus on Libya.

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C. Libya’s Crisis

Many Security Council members maintain that the LIA’s assets should stay frozen until a unified government emerges in Tripoli. Several recognise that this stance is a deviation from the original aim of the sanctions, but they believe it would be irresponsible to lift the restrictions in the absence of an elected government. A Western official said the east-vs.-west feuding must stop for full sanctions relief to happen.

The minimum requirement for sanctions relief is a Libyan government that brings the east and west together. [Our government] has zero appetite to do anything to ease or temporarily unfreeze the assets without a government. 

Some member states are more flexible with this requirement than others, noting that the desire to see a unified government is “not a hardline position” and could be overlooked “if [the] LIA got its house in order”. Member states have raised the possibility of sanctions relaxation serving as an incentive for Libyan politicians to inch toward elections. As a Western diplomat said, “This is the one carrot we have to dangle”. 

But diplomats admitted that expecting relief from the LIA sanctions to sway Libyan politicians is overly optimistic. Despite vigorous efforts by the UN, the U.S. and other powers to break Libya’s political deadlock, little progress has been made.

Part of the reason, according to diplomats, is that Libyan political elites are motivated by personal gain, and LIA sanctions relief offers them little in the way of profit because of the intense international scrutiny these assets get. Even if they could exploit an unrestricted wealth fund, the windfall would pale in comparison to the billions of dollars they are allegedly already reaping each year, largely unchecked, from Libya’s state funds and oil exports. 

V. Building on Reform

The Security Council took a major step forward when it decided to allow the LIA to invest its frozen cash reserves, while keeping safeguards in place. This move should help the fund grow once again. But the Council can do more. Libya’s sovereign wealth fund is a symbol of hope for the future and an insurance policy against the inevitable moment when the country can no longer depend upon its oil reserves to sustain the state. The Libyan people deserve to see the fund expand to its full potential.

A. The Case for and against Sanctions

While sanctions have insulated the LIA’s holdings from the dysfunction and graft common to many Libyan state institutions, they have also limited its growth. The fact that the LIA has been unable to reinvest the cash it holds severely limits the fund’s potential.

A change is on the way, in part because the LIA is now allowed by the Security Council to reinvest its frozen cash reserves held at the Euroclear bank and with investment fund managers. Nonetheless, sanctions still prohibit the LIA from selling its holdings if they are incurring losses and from taking advantage of opportunities to buy new assets if doing so is financially beneficial. 

The opportunity costs of this restriction are enormous. The Panel of Experts points out that the LIA’s frozen assets have grown by 11.93 per cent since imposition of the freeze, in contrast to the LIA’s claim that its assets have fallen in value.

Yet had the LIA reinvested its frozen cash in an index fund mirroring the S&P 500, a stock market index that tracks the performance of the 500 largest publicly traded companies in the U.S., it could have seen those cash reserves grow by almost 400 per cent over the same period. If it had invested in U.S. government bonds, a safer bet, it could have seen 16 per cent growth. The opportunity costs of holding cash for so long could amount to tens of billions of dollars.

The hefty management fees paid to professionals who are barred by sanctions from actively managing the LIA’s portfolios have also depleted the fund, though in its 2025 report the Panel of Experts found that excessive charges violate the sanctions regime. To be sure, had the Council lifted LIA sanctions when it delisted the National Oil Corporation and Central Bank, the LIA could have been subject to the same political meddling and corruption those institutions experienced.

Before the asset freeze, the LIA made questionable investments in real estate, equities and other assets that could have seen returns below those of an index fund or a low-risk vehicle like a government bond.

With the country suffering recurrent bouts of turmoil and an unresolved division between its two competing authorities, the reluctance of Security Council members to hand over the keys of the fund to Libyan leaders is all the more understandable. In any event, hardly anyone inside or outside Libya is calling for the full-scale lifting of sanctions on the LIA in the absence of a unified, elected government.

Mismanagement and corruption risks are a weak justification for international sanctions.

Still, mismanagement and corruption risks are a weak justification for international sanctions, which stand out as some of the most restrictive measures in the UN Security Council’s arsenal. The Council is mandated to use sanctions in the case of threats to international peace and security, but it would be a stretch to assert that corruption at the LIA falls into this category.

Other sovereign wealth funds have been embroiled in major scandals; indeed, according to an expert, as far as sovereign wealth funds go the LIA is nowhere near the bottom of the list in terms of probity and transparency. The other justification for continued sanctions, that Libya lacks a unified, elected government, is also weak given that such a government, if established, would not necessarily guarantee the LIA’s transparency.

In any event, this prospect remains distant. Libya’s political crisis looks poised to continue, perhaps for years. If it does, the country’s deadlock would mean that the LIA will also be under sanctions indefinitely. The longer sanctions continue, however, the harder it will be for the Council to justify restrictions designed to stop a long-dead former dictator from committing atrocities. The current measures come with conditions for lifting that seem impossible for Libya to meet. Instead, the Security Council should take additional actions to remove constraints on the fund’s growth while maintaining safeguards.

With the reforms it made to LIA sanctions in January 2025, the Council showed that it can move past politics, competing priorities and technical complexity to make its sanctions regimes better fit for purpose and more in line with its institutional mandate. It should stay on this track and find more solutions that stop any further erosion of the fund. 

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Milad Elharathi

The Hybrid Security Department

Not all the armed Islamist groups operating in Libya are affiliated with the state in some way, which has led to the establishment of a mixture arrangement between formal and informal forces.

Over time, most of the armed groups are subordinated themselves to the chief of staff and Ministry of Defense. Others joined the Ministry of Interior’s Supreme Security Commitiee (SSC), which roughly approximated the functions of the police. The SSC was always stronger in Tripoli than in other areas.

Because entire armed groups joined the SSC and Shield forces, the new structures essentially preserved the cohesion and parochial outlook of the armed groups, even though under the cover of the state . Effectively represented by the government and flush with funds, the armed groups were even more emboldened to pursue agendas that were increasingly political and self-serving.

At best the Libya Shield and SSC structures were ways for the Libyan government to purchase firepower when needed to quell crises. But the new structures took on a life of their own, confusing efforts to build up the regular army. In many parts of the country, it is the armed Islamist groups, not the army, that control defense ministries, barracks, bases, and ammunition terminuses. In the past four years, the Libya Armor has become a shadow army that has rapidly over shadowed the power of the regular forces.

Ironically, the monthly government salary for Islamist armed group member exceeds that of a regular policeman and army recruit, giving the members of the Islamist armed groups or would-be recruits little incentive to join the government’s formal forces

The Splitting State

Furthermore, the splitting up of the state, the lack of a capable central power and the persistence of large numbers of heavily armed militias with often conflicting interests led to a general state of insecurity. Moreover, Libya has become an access strip for arms and drug traffickers, who can move in virtually any geographical direction and in any neighboring country they desire. Ironically, the Islamist threat is quite low due to the militias and tribes.

But this does not stop the Islamists to use the isolated territories (particularly those in the south and south / west) as launching pads for attacks in neighboring countries, such as the one on the natural gas processing plant at In Amenas in Algeria, which is very close to the border with Libya and where, among others, two Romanians died more than a year ago.

For this reason Algeria, Mali, Egypt as well as Chad have increased the number of patrols and monitoring operations at their borders with Libya. The movement of Qaddafi-era officers reveals this clearly.

Haftar (Libya’s former chief-of-staff Gen. Khalifa Hftar ) and many of his core supporters are from Benghazi or other eastern towns, which explains why the Special Forces and Air Force have declared for him, while Farnana claims to represent the (Nafusa-Zintan) militia-based “Western Regional Military Council.”

Together they organized the series of “extraordinary conferences of the Libyan army” that resulted in the formation of the Assembly of Free Libyan Officers in April 2013, and most recently announced the establishment of a Supreme Military Council to rival the general staff headquartered in Tripoli.

The emerging military politics clearly revolve in part around formal posts such as that of the chief of staff, who acts as one of several interfaces between various armed groups on the ground, the ministry of defense, and the General National Congress.

The same dynamic also applies to the third camp that has formed since 2011, centering institutionally on the ministry of defense, but also comprising various militias. Qaddafi abolished the ministry in 1991, but since its resurrection in 2011 it has largely been controlled by (Zintanis) and their affiliate militias, while the post of deputy minister has been held by (Sadeq Mabrouk and Khaled al-Sharif), both former leading members of the militant Libyan Islamic Fighting Group (LIFG, founded in 1995).

In short, as in 2011, the Libyan armed forces may again be splitting and fragmenting, and their ability to decide the balance of political power is far from certain. However, the weaknesses and disunity of the country’s civilian governing bodies suggests that resolution of divisive debates about the distribution of power and wealth will be driven by military politics, much as in the transition from the monarchic era to the republic in 1969.

These remain very much in flux, and have been greatly complicated by the addition of powerful revolutionary militias to the mix.

The concept of Rebuilding and

Transformation (Libya)

In the times of transformation and transition of any giving society priorities should be established. State building process takes longer time and further collective understanding and agreement because of the political currents and their role. The aim of this reporting essay is to lay down the ground for how new Libya can build its destination.

Rebuilding Libya after a revolution should be done according to a national development plan that includes all spheres which were either ignored by the old regime or have deteriorated as a result of exceptional circumstances in which the country live as a result of productive activities’ halt when most of the people are engaged in the revolution which represents for them a great event and a great hope, especially as they were accompanied by demonstrations and sit-ins due to factional demands, and due to difference between workers and company owners which lead to closing some factories and governmental facilities.

In addition, reality and limited potentials impose themselves forcibly, and the post-revolutionary government (PRG) has to draft a list of priorities that needs to start with, not only to meet necessary daily requirements for all the people but also for the production wheel to start anew in the right direction, and to realize a speedy return to satisfy the biggest number of the people, especially the needy and those of limited income.

Nevertheless, to start projects to rebuild the state on new revolutionary bases and with determined priorities needs huge of funds; even if there have been already feasible studies which in turn cost a lot of money and time.

However, with some deterioration in productive sites that generate incomes such as tourism, exports and services, thinking to allocate necessary funds as soon as possible starts. The only available financial source of Libya is energy income. Loans from international donors, if it’s a soft ones with grace periods and less costly than domestic loans are encouraged.

However, bearing in mind that some of the international loans have difficult conditionality concerning expenditure rationalization, and basic commodities; subsidies.

The Missed Path Toward

a National Strategy

A matter of great importance and sensitivity is that the Revolution erupted in protest to certain rejected practices in international politics: such as the necessity to have independent national decisions, and in home politics: the necessity to provide means of living and basic needs for a people who is aspiring for improving their economic and social levels in the light of its sacrifices to achieve the Revolution’s objectives.

To draft a plan for development priorities needs understanding of available resources to help realize desired results. Local resources can be either local or international. Availability of resources may be an important factor in the necessity to put down priorities, and that needs field research and studies.

Moreover, national development strategy usually includes: security matters, good governance and economic development, as well as regional and international cooperation. Most important is to work for political reconciliation with the society’s spectra.

Paradoxically, it is crucial that the government is committed by a national strategy for development, and that one of its objectives is to empower the citizens and institutions to provide better services, to create job opportunities and sustainable development, to allow NGOs of the civil society to participate and to protect citizens’ rights.

The development priorities’ list is important as it:

– Explains to the people the government’s efforts to legitimize them and to secure stability to help implement its plans.

– Improving incomes, public services, providing more job opportunities, and strengthening capabilities for good governance.

– Government’s control of the development’s agenda in all fields.

– Preparing a list of priorities and implementing it will spread a feeling of satisfaction for the Libyan citizens and the international community that there are serious efforts that are exerted to realize development, and not be satisfied with slogans only.

The list includes good governance, providing security and peace, developing the private sector, developing human resources, developing infrastructures and agricultural and rural development.

– Developing human resources includes (developing skills, education for all, high education, women’s affairs and capacity building in health affairs).

– Development of infrastructures includes: generating local resources, industries, energy programs and urban development.

– Development of the private sector includes: trade facilities, small and medium enterprises, using Egyptian and Tunisia labor force and not exported ones.

– Good governance includes: economic and financial reform, transparency and accountability, rule based on efficiency and efficacy, local good governance, justice for all, respect of human rights.

***

Milad Elharathi – Visiting Fellow, at Clare College, University of Cambridge UK

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Karim Mezran and Dario Cristiani

On May 12, 2025, Abdulghani al-Kikli, widely known as “Ghnewa”, the head of the Stability Support Apparatus (SSA), an entity affiliated with Libya’s Presidential Council, was killed in Tripoli. His death triggered armed clashes that resulted in six additional fatalities before the situation was declared “calm.”

According to Al Wasat, witnesses reported intense gunfire at the Tikbali military camp, located in southern Tripoli near the Abu Salim district—Ghnewa’s traditional stronghold—where streets were reportedly deserted during the fighting. Other sources based in Tripoli indicated that al-Kikli was killed in a targeted ambush, suggesting a deliberate effort to remove him from the country’s complex military landscape.

In the aftermath of the clashes, the Ministry of Defense under the Government of National Unity (GNU) announced that it had assumed “full” control over the Abu Salim area. By the morning of May 13, the ministry confirmed it had also secured all SSA headquarters and had issued directives to implement a broader plan aimed at restoring security and stability.

GNU Prime Minister Abdulhamid Dbeibah addressed the developments in a statement on X, extending congratulations to the Ministries of Interior and Defense, along with the army and police. He characterized the events as “a decisive step toward ending irregular groups,” asserting that the outcome “confirms that the legitimate institutions are capable of protecting the nation and preserving the dignity of its citizens.” He added that the operation reinforces the principle that “there is no place in Libya except for state institutions and no authority except that of the law.”

A push for power consolidation

Al-Kikli’s killing is reportedly part of a broader effort by these brigades to eliminate influential militia leaders and consolidate control over Tripoli under forces fully loyal to the GNU prime minister. According to Libyan sources, Hamza and Zoubi had been planning this campaign for some time. The original strategy was allegedly set to begin in April, targeting another major Tripoli militia—Abdulrauf Kara’s Special Deterrence Forces (SDF, or Radaa), which controls Mitiga Airport. However, the operation was delayed. The SDF was also the group responsible for kidnapping Hamza in 2023, an event that triggered one of the most severe outbreaks of violence in Tripoli since the October 2020 ceasefire.

Al-Kikli was targeted after escalating tensions by attacking the Libyan Post Telecommunications and Information Technology Company (LPTIC)—considered the most important state-owned enterprise in Libya after the National Oil Corporation (NOC). He and his men were accused of kidnapping and shooting the newly appointed chairman of the board, Salaheddin Elnajih, an appointee of Prime Minister Abdulhamid Dbeibah.

In early April, following Elnajih’s appointment, Prime Minister Dbeibah underscored “the importance of full and orderly disclosure of all revenues and profits of the company” and called for “adherence to financial transparency in order to strengthen the trust of the State and citizens in the performance of public institutions.” Elnajih, in turn, denounced what he described as a “systematic campaign targeting the company,” and affirmed his “full commitment to respecting the Prime Minister’s directives on disclosure and transparency.”

Both of the groups involved are nominally aligned with the GNU. The 444th Combat Brigade is commanded by Major General Mahmoud Hamza, appointed Director of Military Intelligence by Dbeibah in 2023. The 111th Reinforced Brigade, formerly known as the 301 Brigade, is led by Abdussalam al-Zoubi of Misrata. These two brigades were subsequently tasked with securing control over the contested area.

Al-Kikli in the crosshairs: Long

brewing tensions

After the kidnapping, military authorities reportedly demanded the handover of those responsible. Al-Kikli’s refusal to comply elevated him to the top of the target list—not only for Zoubi and Dbeibah but also for several Misratan factions with increasing stakes in consolidating state authority.

Al-Kikli had shown little interest in pursuing a negotiated settlement. This led to the ambush: he was reportedly called in under the pretense of holding talks—something that had occurred numerous times in the past—but was instead killed.

Commenting on this operation, General Hamza stated: “Three hours were enough to complete a precise operation […] against the most brutal criminal forces in the country since 2011.”

This development must also be viewed within the context of persistent intra-Misratan rivalries, with Abdussalam al-Zoubi particularly focused on safeguarding his own position. Acting preemptively, General Hamza and Zoubi eliminated “Ghnewa”, seized all SSA bases, and consolidated their military presence.

Escalations and endurance: Looming

questions on what’s to come

In the aftermath, questions remain over how the Special Deterrence Forces (SDF) and remnants of the SSA will respond.

There had been speculation about a possible negotiated deal. With Dbeibah, Hamza, and Zoubi currently holding the advantage, they may seek to pressure the SDF into accepting the terms of a potential surrender, possibly offering immunity or concessions in exchange for relinquishing control over Mitiga Airport.

However, according to images and reports emerging from Tripoli, the 444th Brigade launched an attack on Kara’s SDF on the evening of May 13, provoking a violent response from the Madkhalite-aligned militia.

This marks a significant development, highlighting a key distinction between the SDF and other Tripoli-based armed groups. The SDF is not a typical militia: it is a radical Islamist Madkhalite formation that follows the teachings of Saudi theologian Rabee al-Madkhali. Although Madkhalism is generally considered a politically quietist and ultraconservative branch of Salafism, the SDF has carved out a distinct identity, opposing both General Khalifa Haftar and Islamist groups such as the Muslim Brotherhood.

This ideological foundation has contributed to the SDF’s greater resilience and internal cohesion compared to more transactional or criminally driven militias. By contrast, the SSA under al-Kikli functioned primarily as a criminal network. With his killing, the group is likely to be replaced by a younger, still locally embedded but likely more radical figure. But in the short term, the SDF has been effectively sidelined.

Meanwhile, social media footage indicated the arrival of armed groups from other parts of western Libya—such as Zawiya and Warshefana—seemingly mobilizing in support of Kara’s faction. This type of fragmentation and shifting alliance-building is emblematic of intra-militia conflict dynamics in Libya since 2014.

After several hours of intense fighting, international agencies reported that a temporary truce had been reached. Whether it will hold remains uncertain.

The fate of Ghnewa’s fighters

Against this backdrop, another dimension warrants attention: While Tripoli’s militias may become politically irrelevant following the elimination of their leaders, they have historically played key roles in local territorial control. Though widely labeled as “criminal organizations,” these groups often functioned as de facto police forces, maintaining a tenuous form of order by deterring rival factions. In contrast, the forces led by General Hamza and Abdussalam al-Zoubi are highly militarized and not particularly suited for routine policing or neighborhood-level governance.

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Vibhu Mishra

A fragile calm has settled over Tripoli after a sudden surge of violence this week left parts of the city in ruins, claimed civilian lives, and heightened concerns about the stability of Libya’s already fragile political and security situation.

Clashes broke out earlier in the week across several districts of the Libyan capital, reportedly triggered by the killing of a prominent militia leader.

The fighting, which involved heavy weaponry in densely populated areas, forced hundreds of families to flee and placed severe strain on local hospitals.

UN Secretary-General António Guterres urged all parties to take urgent steps to consolidate the ceasefire announced on Wednesday.

“The rapid nature of the escalation, which drew armed groups from outside the city and subjected heavily populated neighbourhoods to heavy artillery fire, was alarming,” his spokesperson said in a statement on Thursday.

“The Secretary-General reminds all parties of their obligation to protect civilians and calls on them to engage in serious dialogue in good faith to address the root causes of the conflict.”

Alarms raised

The UN Support Mission in Libya (UNSMIL) issued successive warnings throughout the week, calling the situation “deeply alarming” and urging an “immediate, unconditional ceasefire.”

“Attacking and damaging civilian infrastructure, physically harming civilians, and jeopardizing the lives and safety of the population may constitute crimes under international law,” the mission said on Wednesday, praising mediation efforts by elders and civil society leaders.

Years of fragmentation

Nearly 15 years after the fall of Muammar Gaddafi and the emergence of rival administrations in 2014, the country remains divided, with the internationally recognised Government of National Unity (GNU) based in Tripoli in the northwest and the Government of National Stability (GNS) in Benghazi in the east.

Competition over Libya’s vast oil wealth further complicates the situation. Though the country produces more than a million barrels a day, the living conditions of ordinary Libyans have seen little improvement.

Accountability for atrocities

In New York on Thursday the Prosecutor of the International Criminal Court (ICC) announced that its investigation into alleged war crimes in Libya has entered a new phase, following increased cooperation by authorities there.

Briefing the UN Security Council from The Hague, ICC Prosecutor Karim Khan described “an unprecedented six months of dynamism,” citing the January arrest of Osama Elmasry Najim, a commander in the now-dissolved Special Deterrence Force (RADA), and his controversial return to Libya.

Mr. Khan briefed Ambassadors via videolink after the United States imposed punitive sanctions on the court including senior personnel, which threaten the prosecutor and others with arrest if they travel to the US. The US made the order in response to the ICC issuing arrest warrants for the Israeli Prime Minister and former defence minister, last November.

Mr. Najim was arrested by Italian authorities based on an ICC warrant on charges of war crimes and crimes against humanity linked to abuses at Metiga Prison.

However, his return was a matter of deep concern, said Mr. Khan.

New ‘rule of law’ promises accountability

“There was real dismay and disappointment among victims that Mr. Njeem was returned to the scene of the alleged crimes,” Mr. Khan said.

Despite that setback, he said that the arrest warrant had sent “shockwaves” through Libyan militias and alleged perpetrators in Libya, signalling a growing awareness that “the rule of law has entered the territory of Libya.”

He confirmed that more arrest warrants are being pursued, and that the ICC has responded to a request for assistance from the National Crime Agency of the United Kingdom as part of its own investigation into Mr. Njeem.

“There is a black box of suffering in Libya,” he told ambassadors. “We will manage to break it open.”

Libya grants ICC jurisdiction

In another major development, Libya formally submitted a declaration to the ICC under Article 12(3) of the Rome Statute, granting the court jurisdiction over crimes committed on Libyan soil from 2011 to 2027.

Mr. Khan described this as a “new chapter” in accountability efforts and confirmed that the investigation phase is expected to conclude by early 2026.

About the ICC

The International Criminal Court (ICC) is an independent judicial body established under the Rome Statute, adopted in 1998 and in force since 2002.

Although not part of the United Nations, the ICC works closely with it under a cooperative framework. The situation in Libya was first referred to the ICC by the UN Security Council in 2011 through resolution 1970.

______________________

The Libyan deputy’s nightmare began on May 16, 2024, when, after attending a military parade of the General Command forces in Benghazi, he was kidnapped in the city center. Since then, he has been imprisoned in inhumane conditions.

Since Libya lost its sovereignty and stability, the country has become an open arena for human rights violations and the suppression of dissenting voices—even within elected institutions. One of the most telling cases exposing the depth of institutional and security collapse is the disappearance of Libyan Member of Parliament Ibrahim Al-Darsi, which has become a new symbol of the erosion of parliamentary immunity and freedom of expression.

On May 16, 2024, after participating in a military parade for the General Command forces in Benghazi, MP Ibrahim Al-Darsi was abducted in the city center. Security authorities in Benghazi claimed at the time that the incident was “criminal” and that the MP had been kidnapped for robbery, in an attempt to offer a narrative distancing political motives, despite clear indicators to the contrary.

A year after his disappearance, leaked videos began circulating on social media, showing a man widely believed to be the missing MP sitting on the ground, chained with iron shackles, nearly naked, in a degrading and inhumane condition. The French magazine “Afrique Asie” later published images from the video, quoting sources saying the footage was recorded inside a secret detention center in Benghazi operated by the Tariq Bin Ziyad militia, which reports directly to Saddam Haftar. This militia has previously been accused of extrajudicial killings and enforced disappearances of political opponents.

Even more shocking were additional leaked clips, in which MP Ibrahim Al-Darsi appeared pleading with Saddam Haftar to show mercy, spare his life, and release him for the sake of his children—scenes that underscore the moral collapse in the treatment of an elected official for merely expressing his opinion.

According to political and media sources, the real reason behind Al-Darsi’s abduction hadnothing to do with robbery. Instead, it stemmed from his outspoken criticism of the so-called

“Benghazi Reconstruction Project.” He accused influential figures close to the Haftar family, notably Belqasem Haftar, of exploiting millions of Libyan dinars allocated for reconstruction to complete private projects, which are then rebranded under the reconstruction initiative. He asserted that this was not genuine rebuilding, but rather systematic looting cloaked in superficial legitimacy.

Al-Darsi’s accusations came at a sensitive time, amid growing reports of massive deals and public funds being funneled into private companies linked to the Haftar family without oversight or accountability. These remarks placed him directly in the crosshairs of political and security powers, and he disappeared just days later—followed by near-total silence from the House of Representatives, which was supposed to protect its members.

The House of Representatives, led by Aguila Saleh, issued no official statement clarifying the circumstances of the incident, nor has it demanded an independent investigation. The public prosecution remained silent, prompting activists and civil society figures to accuse them of blatant complicity.

The United Nations Support Mission in Libya (UNSMIL) expressed “deep concern” over the circulating footage, confirming that it clearly showed signs of torture and abuse. The mission called for an immediate, impartial, and independent investigation, emphasizing that enforced disappearances, torture, and extrajudicial killings constitute grave crimes potentially prosecutable by the International Criminal Court.

The mission also stated that it had requested its digital forensic experts to examine the video’s authenticity and reminded that detention centers across Libya, both in the east and west, are known for systemic violations against detainees.

Hanane Saleh, Deputy Director for the Middle East and North Africa Division at Human Rights Watch, described the leaked footage and photos of MP Ibrahim Al-Darsi as “shocking,” calling for a transparent investigation while noting that the organization could not independently verify the materials at that stage.

Meanwhile, the International Criminal Court (ICC) spokesperson, Fadi El Abdallah, said that the ICC could not comment on the leaked videos due to the confidentiality of ongoing investigations and the need to protect witnesses and sources. He also confirmed that ICC Prosecutor Karim Khan would brief the United Nations Security Council on May 15, 2025, and called on all parties to submit any information relevant to the ongoing investigations in Libya.

The case of MP Ibrahim Al-Darsi clearly illustrates the current state of Libya: a silent parliament, accused security forces, unchecked militias, and corruption exploiting public projects to empower de facto powers. Amid local silence, hopes for justice now rest on the international community, human rights organizations, and the courage of those still willing to speak out against injustice—despite the risk.

_______________________

B. Libyan Officials

A number of Libyan government officials object to sanctions as a matter of principle. They take issue with the punitive nature of the sanctions, which they say constitute “a significant departure” from their original function of protecting Libya’s assets from Qadhafi’s abuses.

They do not think Libya should be penalised through the same measures used against Qadhafi, and they question the Security Council’s authority to oversee Libyan finances. “Who are they to establish what benchmarks are required for management [of LIA’s assets]?”, one asked. 

The internationally recognised government in Tripoli, however, has refrained from pressing for an outright end to sanctions on the LIA. It has long called for the Security Council to reform the restrictions on the LIA, citing the same issues that the fund has highlighted, but gone no further.

Officials point to two main reasons for this stance:

The first is pragmatic: the Security Council is unlikely to wholly lift the sanctions as long as Libya is a divided nation without an elected government, so lobbying for this goal would be a waste of effort.

The second is that the government in Tripoli also values the protection that sanctions give to Libya’s assets in a period of prolonged turmoil. According to public officials, sanctions shield LIA assets from potential misappropriation.

In the words of the permanent representative of Libya to the UN, “I admit that the funds could have been wasted if they were totally unfrozen because of the instability”.

[Lyban Officials] are worried about foreign countries and companies extracting compensation from frozen LIA funds for claims brought against the Libyan state. Even so, Libyan officials highlight the need for reform.

While acknowledging the benefits of sanctions, they are worried about foreign countries and companies extracting compensation from frozen LIA funds for claims brought against the Libyan state.

Various cases already exist. In one, an NGO associated with a Belgian prince that completed a project in Libya during the Qadhafi era sought €50 million in compensation from frozen LIA funds held in Belgium.

In another, a Kuwaiti construction company secured a court-ordered freeze on over $360 million of the LIA’s assets in France (this decision was later overturned on appeal).

Libyan officials are concerned that such cases will become more common or create precedents for awarding frozen LIA funds to foreign companies.

Besides LIA staff themselves, other Libyan officials have occasionally made ad hoc pleas for sanctions relief from the Security Council.

In 2023, the Tripoli government inquired with foreign embassies whether they would agree to unfreeze some of the LIA’s funds for development projects such as solar energy farms and reconstruction in Derna, which had been hit by a severe flood. The LIA chairman, however, did not endorse these requests. Embassies were hesitant to take the conversation further.

They might have been willing to unfreeze funds to tackle the flood’s effects, ideally with the World Bank overseeing disbursements. But Western diplomats in Tripoli wanted the two Libyan governments to agree on how the funds would be used, and no such deal came about. 

Authorities in eastern Libya, meanwhile, toe the official line that LIA assets should not be left in the hands of the Tripoli-based managers, but rather should be transferred to judicial receivership.

They occasionally express support for a parallel LIA leadership aligned with the eastern authorities and make allegations that the Tripoli government is involved in corruption at the fund.

They are rarely vocal on the LIA issue, however. They ignored the proposal to use unfrozen funds for Derna’s reconstruction.76 

C. The Libyan Public

Dozens of Libyans from civil society groups, the business class and political circles told Crisis Group that they did not support the wholesale lifting of sanctions on the LIA.

They saw the restrictions as a “safety net” sheltering the country from the chaos of political instability and conflict, as well as from endemic corruption. “Lifting the sanctions while the country is divided would be catastrophic”, a businessman said.

Few have confidence in the capacity of the LIA’s management to manage the assets fairly and competently. As another businessman said, “What is the insurance that this money will be invested competently? The risks of mismanagement are very high”.

Many Libyans believe that the sanctions constrain elites from stealing or mismanaging LIA’s assets. 

IV. Security Council Positions on

Sanctions Relief

Until the Security Council decided to allow the LIA to invest some of its frozen cash reserves following presentation of the fund’s investment plan, its members were wary of agreeing to any reform because of Libya’s political and economic turmoil as well as their doubts about the LIA’s competence.

Members say lifting the sanctions fully would require a legitimate, elected government and proof by the LIA that it can responsibly manage Libyan wealth. 

A. Council Members Agree on Reforms

Security Council members had started to coalesce around the idea that the asset freeze required updating in 2024. A diplomat expressed the emerging consensus, noting that “the sanctions regime is out of sync with the current reality”. Several agreed with the LIA that the sanctions had contributed to material losses.

They arrived at this view after hearing similar ones from others. In part, they were influenced by the LIA’s own reinvigorated advocacy for sanctions reform when it submitted its investment plan.

In its review of the LIA’s proposals, the Panel of Experts also recommended that the Security Council approve reforms to allow the LIA to reinvest frozen cash reserves, with safeguards in place.

In December 2024, China called for developing “a reasonable plan” for the frozen assets and expressed openness to adjusting the asset freeze measures.86 Other Western Council members expressed similar views in private. 

Council members still had concerns about the LIA’s competence, which were reinforced rather than mitigated by the LIA’s investment plan. Council members described it as “jumbled” and said it “does nothing to inspire confidence”, a view bolstered by the Panel of Expert’s blistering assessment of the plan’s numerous inaccuracies and inconsistencies.

The Panel report offers an extensive analysis of the transparency, accuracy and comprehensiveness of the plan, which it found to be lacking; catalogues the plan’s errors; and details risks of misuse and misappropriation should all the LIA’s requests be fulfilled.

Informed by the Panel’s conclusions, member states nevertheless came to the conclusion that the sanctions could be reformed – so long as robust safeguards were maintained.

On 16 January 2025, the Security Council decided in a resolution, approved by fourteen members with one abstaining, to reform the LIA sanctions. (Russia abstained for reasons having to do with the arms embargo that were unrelated to the LIA.)

The Security Council welcomed the Panel of Experts’ recommendations on actions to reinvest the LIA’s frozen assets. It decided to allow the fund’s frozen cash reserves to be invested, in line with the LIA’s requests, but with modifications and conditions.

The Council, however, did not grant other requests from the LIA’s investment plan, such as permission to transfer $2.4 billion in cash from Euroclear to the Bank ABC or to countenance active management of the equities and securities in the LIA’s portfolio.93

B. Credibility of the Libyan Investment

Authority

While Council members agreed on reforms, they maintain that a full-scale lifting of LIA sanctions would be irresponsible. A central reason is concern about the LIA’s ability to manage Libyan state funds.

Diplomats see any move to give the LIA authority or management responsibility over the frozen assets as “problematic” because it could open the door to corruption.95 A Western official said his government would not consider unfreezing assets “unless it could be guaranteed that the funds will not be siphoned off”. 

They are also concerned that the LIA would make irresponsible investments if given a free hand. Foreign investors, such as multinational corporations and investment firms eager to tap into the LIA’s capital – in addition to states lobbying on their behalf – do not, as a Western official said, “have a history of responsible use of the money”.

Past lawsuits have highlighted the LIA’s poor investment choices, especially in its dealings with more sophisticated financial businesses. Without sanctions, Council members said, unscrupulous actors might jump at the opportunity to get their hands on tens of billions of dollars. As one expert put it, “the vultures will descend”. 

The influence of Libya’s political elite and armed groups over the LIA’s operations also worries Security Council members. Armed groups connected to different leaders repeatedly used force in and around the LIA’s headquarters from 2016 until at least 2023.

The groups tried to influence hiring decisions and instal into or force from office various people vying for control. Incidents of intimidation by armed groups peaked in 2018, when a militia abducted a fund employee for several hours and forced senior fund managers to move out of Tripoli for security reasons.

Council members fear that unlocking the LIA’s assets would allow these same armed groups to influence the LIA’s decision-making and compromise the fund’s independence.

Another major concern for Council members is the LIA’s technical and managerial capacity. As an official told Crisis Group, “part of it is a genuine lack of technical ability, but also part of it is … the inability of management to lead the organisation”.

The official said the LIA has so far been unwilling to adopt international standards such as the Santiago Principles for good governance of sovereign wealth funds (although the LIA has taken steps toward honouring these principles), a view that the Panel of Experts shares.

Security Council members say the LIA lacks transparency, asking why it has been unable to produce a consolidated financial statement in accordance with international standards, despite repeated requests from the Council for such a document.

For its part, the LIA confirmed to Crisis Group in 2023 that it was working to complete its financial statements with the help of Deloitte, an advisory firm. To date, however, these statements are unfinished. Council members also say the LIA’s formal requests, such as for sanction licences, often do not meet their standards.

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Fresh gunbattles broke out in Tripoli between the powerful Radaa force and the 444 Brigade, just a day after Libyan authorities declared the violence over.

Fresh gunbattles have erupted in the Libyan capital between two powerful armed groups, a security official said Wednesday – just a day after authorities declared the fighting over. Clashes flared between the Radaa force and the 444 Brigade in key areas of Tripoli, including the port, the source said. There were no immediate reports of casualties.

The official described the fighting as “urban warfare”, with intermittent clashes in residential areas involving light and medium weapons. In other areas, heavy weapons were being used to target rival positions. Libya has struggled to recover from years of unrest since the NATO-backed 2011 uprising that toppled and killed longtime leader Moamer Kadhafi.

The country remains split between a UN-recognised government in Tripoli, led by Prime Minister Abdulhamid Dbeibah, and a rival administration in the east, controlled by the Haftar family. On Monday night, heavy arms fire and explosions rocked several Tripoli districts, killing at least six people, according to authorities. Reports said Abdelghani al-Kikli, leader of the Support and Stability Apparatus which controls the southern district of Abu Salim, had also been killed at a facility controlled by the 444 Brigade.

Fighting now extended in southern and western Tripoli as Radaa and “groups supporting it came as reinforcements against the 444 Brigade”, the interior ministry source said. Another source told AFP groups were moving into the capital from neighbouring Zawiya in support of Radaa.

The 444 Brigade controls parts of southern Tripoli and is aligned with Dbeibah, whereas Radaa controls parts in the capital’s east and holds several key state facilities. On Tuesday, the Tripoli-based government said the fighting had been brought under control, and Dbeibah announced a string of executive orders including dissolving Radaa.

Dbeibah also said authorities were seizing or dissolving some bodies previously run by Tripoli armed groups other than the 444 Brigade. The United Nations mission in Libya said it was “deeply alarmed by escalating violence in densely populated neighbourhoods of Tripoli for the second night in a row”.

In a statement, it called for “an immediate, unconditional ceasefire in all areas, allowing safe corridors for the evacuation of civilians trapped in intense conflict zones”.

Killing of Libya militia leader sparks violent clashes in Tripoli

The killing of militia leader Abdelghani al-Kikli in Tripoli has triggered fierce clashes between rival armed groups. The killing of Abdelghani al-Kikli on Monday, head of Libya’s Support and Stability Apparatus and one of Tripoli’s most powerful militia leaders, has triggered intense fighting across the capital, leaving at least six people dead and plunging the city into a new wave of armed chaos by Tuesday morning.

Al-Kikli, also known as ‘Ghneiwa’, was shot dead late on Monday during a meeting at the Tekbali military camp in southeast Tripoli, according to security and medical sources cited by The New Arab‘s Arabic language edition, Al-Araby Al-Jadeed. The meeting was reportedly convened to de-escalate mounting tensions among armed factions, but turned violent when guards from rival groups exchanged fire outside the gathering.

Al-Kikli and several of his escorts were killed in the shootout. Members of the 444th and 111th Brigades, both affiliated with the Ministry of Defence, were also reportedly present. Videos circulating on social media from inside Tekbali camp appear to show al-Kikli’s body alongside armed men believed to be part of his entourage.

Escalating tensions 

By Tuesday morning, fighting had engulfed several areas in southern Tripoli, particularly Abu Salim and the adjacent Mashrou al-Hadhba district, where the Support and Stability Apparatus was headquartered. In the wake of the violence, Libya’s defence ministry declared operations in Abu Salim complete, with Prime Minister Abdul Hamid Dbeibah claiming the offensive demonstrated the state’s ability to “protect the homeland and preserve the dignity of citizens”.

The interior ministry issued multiple statements urging residents to remain indoors, while the health ministry declared a state of emergency across Tripoli’s hospitals. The clashes forced authorities to suspend flights at Mitiga International Airport, transferring aircraft to Misrata. Schools were also shut down across the capital, and streets in many districts remained deserted.

Ibrahim al-Khalifi, the mayor of Tripoli, confirmed that gunfire had largely subsided by early Tuesday but said movement in many neighbourhoods remained halted. Al-Kikli was a key player in Libya’s post-2011 armed landscape. A civilian before the 2011 uprising, he founded a militia in the Abu Salim district after Muammar Gaddafi’s fall.

His forces later played a central role in the 2015 Libya Dawn operation and were incorporated into official state structures in 2016 under the interior ministry. Under the Government of National Accord, al-Kikli’s influence grew, culminating in the formation of the Support and Stability Apparatus under the Presidency Council.

His power extended well beyond Tripoli into Gharyan to the west and Zliten to the east, and he was widely seen as one of the city’s four major militia commanders alongside the Special Deterrence Force, the 444th Brigade, and the 111th Brigade. His group played a leading role in the 2019–2020 “Volcano of Rage” operation that repelled warlord Khalifa Haftar’s attempt to capture Tripoli.

Libya remains divided between two rival governments, the UN-recognised administration based in Tripoli and a competing authority led by Haftar in Benghazi. The two sides have fought multiple times, most notably during Haftar’s 2019–2020 assault on the capital. Efforts to unify the country and hold national elections have repeatedly failed since Libya split politically in 2014, following the NATO-backed overthrow of Gaddafi in 2011. Attempts to consolidate authority through a single military or civilian structure have so far collapsed under competing factions and shifting allegiances.

Tensions had been mounting in the capital for days, reportedly due to a struggle over control of administrative buildings and influence over key state appointments. Videos shared by activists on Monday night showed convoys from Misrata’s Joint Force and Zintan-based units loyal to Interior Minister Imad Trabelsi moving toward Tripoli. These groups are aligned with the Government of National Unity (GNU) and appear to have taken part in raids targeting al-Kikli’s bases.

UN’s Support Mission in Libya (UNSMIL), expressed alarm over the situation, calling for “an immediate de-escalation and an end to provocative actions”. The US embassy in Libya echoed the call for restraint and shared the UN’s statement. Both urged armed groups to protect civilians and settle disputes through dialogue. The clashes come just days after the UN mission began consultations on electoral law proposals aimed at breaking Libya’s political deadlock.

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Abdullah Alkabir

Suddenly and unexpectedly, at this time, Mohamed Menfi, Head of the Presidential Council, announced the launch of the decrees for the National Rescue Plan, calling on members of the Presidential Council not to object to the powers that require the Council’s consensus.

The rescue plan is based on 12 presidential decrees, beginning with Presidential Decree No. 1, which suspends the effects of the law establishing the Supreme Constitutional Court, which was issued by the House of Representatives two years ago based on a ruling by the Constitutional Chamber declaring it unconstitutional.

The Presidential Council’s action coincides with the action of the United Nations Mission in Libya (UNSMIL), supported by the US administration. UNSMIL is awaiting the receipt of the Legal Committee’s final proposals by the end of this month, to begin implementing a political initiative in which the fate of these proposals will be determined by representatives of the political and military parties and other participants from other groups and components.

The conflict between the project led by UNSMIL and the Presidential Council’s project is clear, as there is no harmony between the two projects. UNSMIL will invite the conflicting parties, along with other parties, to a political dialogue that will take into account the Legal Committee’s proposals and select the agreed-upon options for proceeding to the elections. Meanwhile, the Presidential Council’s decrees undermine the powers of the conflicting parties and take a different path, one in which the House of Representatives and the High Council of State have no role. Consequently, a clash between the two projects is undoubtedly imminent.

The Presidential Council’s next steps will be more daring. It may issue a decree suspending the House of Representatives and the High Council of State, a step that would intensify the conflict. Rejection and disdain for these decrees began immediately after their publication, with the Speaker of the House of Representatives declaring them invalid and illegitimate.

Meanwhile, the Prime Minister’s statement hinted at the worst possible consequences: the entrenchment of division. The Presidential Council’s steps may place the country on the brink of total partition. The legal basis for the Presidential Council’s actions will be controversial, and no one will be able to decide on it, because the basis of the crisis and conflict is political, not legal.

Furthermore, the House of Representatives; the legislative body, has not set the right example in respecting laws and agreements, as it has violated the Constitutional Declaration, political agreements, and even the House’s Rules of Procedure.

Representatives no longer have any real authority to enforce the national interest through the House’s laws and decisions. Therefore, there is no point in rejecting or supporting them based on legal interpretation. I believe that the Presidential Council is betting on popular support for this move, especially if it is close to activating the stalled draft constitution and putting the draft constitution to a referendum.

The epic of the upcoming

political process

UN envoy Hannah Tetteh has announced during her first briefing to the UN Security Council that the legal committee tasked by the United Nations with developing legal proposals and options to resolve the political crisis will complete its work before the end of this month. The mission will evaluate these options as the basis for the political process.

Tetteh did not reveal any details about this political process, its stages, or its stakeholders. This is likely to be presented first to the permanent members of the Security Council, and await their comments and demands to ensure their support when it begins implementation. 

Despite this secrecy, after carefully listening to the briefing and the statements of the Council members, one can anticipate the steps the mission will take in the coming weeks and months.

The beginning will be to develop an urgent approach to halt the acceleration toward economic collapse by pushing the conflicting parties to agree on a unified budget and implementing a package of economic and financial reforms proposed by the Central Bank Governor to halt the decline in the value of the local currency against international currencies, provide liquidity to commercial banks, and halt withdrawals from the bank’s international currency reserves to cover the deficit in government spending.

The critical level of the crisis, the state of popular discontent, and the consensus in the Security Council on the need to unify the budget as a fundamental step to curb rampant spending.

In parallel, UNSMIL will begin inviting the parties to the conflict to send names of representatives to participate in a political dialogue that will examine the Legal Committee’s proposals and select the appropriate ones to set arrangements and deadlines for the elections. Membership in the dialogue committee will not be limited to the parties to the conflict alone, but will include figures representing entities and regions not actively represented in the current government.

Taking into account the capabilities and experience of the political party controlling the House of Representatives’ decisions, including obstruction, obfuscation, and procrastination, and thwarting all political solutions that do not meet its expectations, and its ability to completely control all authorities—especially since it possesses the Bouznika laws, which some parties have accepted and others have rejected—what is expected is a new version of the Tunis-Geneva dialogue, with minor differences. 

Based on past experience, we should fear that everyone will agree to form a new executive authority under the same pretexts as before: unifying divided institutions, supervising the holding of elections, and managing state affairs. Then the elections are aborted, and the eternal Speaker of Parliament returns to his favorite game: obstructing the government’s work, denying it a budget, then withdrawing confidence from it and forming a parallel government. This leaves the country in the same vicious circle, and the transitional phase continues with a resurgence of previous conflicts.

The frenzy of fake elites

Once again, in less than a month, statements by Musa Al-Koni, a member of the Presidential Council representing the south, have sparked controversy among activists and followers on social media. The previous time, he proposed an initiative to resolve the Libyan crisis, proposing a return to a system of regions and governorates, based on the principle of reducing the struggle for power and wealth by dismantling the central government and easing pressure on the capital.

This time, he spoke more daringly and explicitly, stating that Libya is an occupied country with no sovereignty over its territory. This undeclared occupation, according to his statements, is due to the Russian and Turkish forces controlling Libyan military bases. He stated that he was returning from a visit to an African country, and his plane was prevented from crossing the airspace of the Brak military base in southern Libya, on instructions from the command of the Russian forces stationed at the base.

There is, of course, nothing new in Al-Koni’s statement. Russian forces have been present in Libya since 2017 at the invitation of Khalifa Haftar and with the approval of the House of Representatives, under the banner of the Wagner Group, providing military and security services. This banner was later removed and they were officially transformed into forces affiliated with the Russian Ministry of Defense. They subsequently expanded, doubling their numbers and upgrading their armament, and now control military bases in the east, center, and south. 

Turkish forces are also present in at least two bases in western Libya, based on a security and military memorandum of understanding concluded between the former Government of National Accord and the Turkish government to assist in repelling Haftar’s gangs and mercenaries from the capital in 2019.

Why the controversy, then, when these facts are clear and well-known? Not a single international report, not even a statement by a former UN official in Libya, not to mention the periodic reports of Security Council experts, fails to mention the Russian and Turkish military presence, along with special forces from other countries. However, these forces are far smaller in size and effectiveness than those of Russia and Turkey. 

The main reason, in my opinion, is that these statements were made by a Libyan political figure who plays a role in the current executive authority. Therefore, there is no room to doubt their authenticity or downplay their importance. Also, because they reveal the Presidential Council’s inability, as the Supreme Commander of the Armed Forces, to take action, and are content with issuing statements and declarations that will neither liberate the country nor restore sovereignty.

It is, of course, strange that an official would maintain his position and not resign after knowing that he is not exercising the duties and responsibilities of the position, meaning that his presence is a mere figurehead with no contribution whatsoever. Moreover, they cannot be considered an acquittal because they were not accompanied by a resignation. 

However, these were statements that revealed the enormity of our calamity. I do not mean here the occupation, as Al-Koni described it, nor his failure to resign, while he realizes that he and his two colleagues in the council are merely decorative pieces to beautify the scene, for positions have their own temptations and advantages that only the most determined men would disdain.

Rather, I mean the responses I read from figures who claim in all their conversations that they are brimming with patriotism and even dying for love for the homeland, and do not care about money, prestige, and positions. These are funny claims that we will attribute to the many jokes in our country these years.

These figures, swollen with patriotism, did not get angry in support of their homeland and their alleged patriotism against the foreign forces violating Libya’s sovereignty, or at the very least, call for an investigation and verification of Al-Koni’s claims, and then adopt a position commensurate with their claimed patriotism. Rather, they sharpened their tongues and pens and attacked him ferociously as if he had uttered blasphemy. 

They found no argument to respond with other than wavy, repetitive talk about the chaos and terrorism in the south in recent years, as if the control of foreign forces over our military bases was less serious than terrorist groups, or as if those who claimed to have expelled these groups and liberated the south had the right to open the country wide to foreign forces and mortgage its sovereignty to foreign powers. 

This is our reality, revealed by events, positions and statements. Our greatest disaster lies in the false elites that promote everyone who possesses the means of power, out of greed for money or position. They justify and defend his crimes and betrayal, and are seized by an incomprehensible frenzy against everyone who opposes them, defending the homeland against the agents.

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Ben Fishman

Now that Libya has become an outright kleptocracy—with billions missing from the public treasury and national politics frozen—the Trump administration may need to throw a sanctions “grenade” into the mix.

ibya is at its lowest point since 2020, when a ceasefire ended the civil war between the UN-recognised government in the west and eastern forces led by Khalifa Haftar. Since then, a series of UN and internationally-backed efforts failed to produce national elections or a unity government, enabling Haftar and Prime Minister Abdul Hamid Dbeibeh to remain in power with no intention of leaving. Both have pledged to cede power to a new transitional government. However, neither appears intent on yielding their status quo privileges. Those include using state assets to enhance their families’ wealth and to distribute it to their allies.

Essentially, Libya has become a kleptocracy. It should be a wealthy country. If properly managed, oil wealth could provide for its own population and help develop the region. Instead, two principal and related economic policy failures produce massive inefficiencies: the state employs most of the working population, and fuel subsidies make up over 20% of GDP. Those subsidies induced cross-border smuggling for what now seems petty change compared to the amount stolen from the state today.

A recent series of reports details how billions of dollars are missing from public funds. The annual UN Panel of Experts report created under UN Security Council Resolution 1973 details a scheme in which some Libyan oil exports were “bartered” in exchange for diesel needed to generate electricity. The panel and a subsequent exposé by the Financial Times describe how this non-transparent scheme led to billions in missing revenue from the Central Bank. The national electric company is also being investigated for supporting this scheme.

Libya’s Audit Bureau also reported that oil revenues from the National Oil Corporation fell well short of deposits made to the Central Bank. After the report came under attack, the embassies of France, Germany, Italy, the UK and the US emphasised their support for the Audit Bureau and concern for maintaining its independence. In another sign of corruption, the chairman of Libya’s Asset Recovery and Management Office was arrested in January. It doesn’t take much imagination to ask why someone exploring a major source of funds was detained despite the UN’s condemnation.

During the first half of March, Libya’s Central Bank injected $2.3bn in foreign currency to provide liquidity for the economy. Then, on 7 April, the bank devalued the dinar by 13%, partly to prevent a black market for foreign currency from developing even before Trump’s tariffs kick in.

Frozen Politics

If the economic picture is bleak, politics is similarly frozen. Dbeibeh received 39 out of 73 votes in the 2021 Libya Political Dialogue Forum, yet he remains prime minister for four years and counting. He was supposed to leave the temporary position in 2022.

For their part, the so-called legislative bodies, the House of Representatives based in the east and the High State Council in the west, have been just as ineffective. They have engaged in countless formal and informal talks with the Presidency Council, but none have produced anything of note. The political leaders have too much vested interest in remaining in power and don’t want to get crosswise with the Dbeibeh or Haftar families.

Foreign Meddling

Beyond internal efforts within Libya, external countries have influenced developments on the ground. Despite holding conferences and initiating dialogues, such as the Berlin process initiated by former Chancellor Angela Merkel, Western actors have been stymied by regional spoilers and a lack of will to prioritise Libya.

During the 2019-2020 civil war, Russian (or Wagner) forces embedded themselves with Haftar in his offensive against Tripoli. Turkish forces heeded the call from the Tripoli government to assist with their defence. The ensuing stalemate left the Turks and Russians in place.

While Turkiye trains western Libya forces and has business ties throughout the country, Russian forces—formerly Wagner Group, now the Africa Corps—have increased their presence across Libya. They use Libya for access to airbases, which allows them to transport troops and materiel to expand into Africa. They also maintain a presence in oil facilities to hold Libya’s main source of income hostage. And when the Assad regime was overthrown, the first place Russia looked to redeploy its forces and ships was the deepwater ports in eastern Libya.

Unwinding Russia’s influence on Haftar is wishful thinking. Russia is clearly the stronger party, but Haftar benefits from its presence against potential external threats or internal challenges. Haftar lets Russia exploit Libyan territory, knowing the Kremlin will ignore the manner in which he rules. As Haftar’s son, Saddam—recently appointed as chief of staff of the Libyan Arab Armed Forces—consolidates more power, he too will rely on a partnership with Russia for the same reasons.

Despite these challenges, the Biden administration sought to make inroads with Haftar, sending the US Libya envoy to meet him at least seven times in Benghazi as well as an assistant secretary of state and the commanding general of US Africa Command. Instead of isolating him until he delivered something concrete to form a unity government, the administration engaged Saddam and Khalifa with no preconditions.

The Biden administration also initiated military exercises in an attempt to unite the eastern and western militaries, but they are fundamentally imbalanced since the majority of military strength in the west comes from the armed groups, not the formal military.

So far, the new administration has followed the Biden approach of trying to lure the Haftars away from Russia. Both Saddam Haftar and his brother Belgassim, who runs the Eastern-based Libya Development and Reconstruction Fund, visited Washington the week of 27 April.

The fund signed several MOUs with American companies, but the Foreign Corrupt Practices Act will likely impede any deals in favour of Turkish and other regionally based companies if the Fund cannot demonstrate a degree of transparency it has lacked to date. If Trump fails to see the benefits to American companies, he will most likely defer the Libyan conflict to Europe. To cite Vice President Vance from the Yemen leaks, “I just hate bailing out Europe again.”

Alternatively, Trump can throw a grenade into the Libya morass, as he has done to shake up other seemingly intractable conflicts. The administration could threaten all the key Libyan leaders who disrupt the peace and stability of Libya and implement existing sanctions regarding Russia’s defence relationships in the East.

Both sides must take concrete steps toward forming a technocratic government, or else they will be sanctioned. Part of the deal should include strict monitoring of the government budget and its key financial institutions, the National Oil Corporation, the Central Bank and all of their subsidiaries. No US administration has been willing to sanction Haftar. Threats would force him to choose between participating in genuine negotiations or showing his true colours as an unreconcilable Russian pawn.

If the Libyan leaders agree to participate in a genuine UN-led negotiation, the US should use its influence to force spoilers to stay out of the process—something previous administrations have failed to do. If the Libyans can’t agree on such a technocrat government after two months, the Trump administration can throw the problem back to Europe.

Put simply, there is an urgency to addressing Libya’s chaos and dysfunction. Every month wasted will yield deeper corruption, more difficult negotiations, and continued Russian exploitation. Europe will not be able to prevent this scenario on its own while dealing with the very survival of NATO. They would be wise to engage with Trump on Libya before it is too late.

***

Ben Fishman is the Steven D. Levy Senior Fellow in the Linda and Tony Rubin Program on Arab Politics at The Washington Institute, where he focuses on North Africa.

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The Washington Institute

C. The Frozen Billions

The fund hibernated for a decade – a stroke of luck, in many ways, because other Libyan institutions that had not been sanctioned during that period suffered from political manoeuvring and graft in the years following the revolution.

After the Security Council lifted its restrictions, the Central Bank of Libya, the National Oil Corporation and other pillars of the state apparatus were dogged by allegations of corruption and misappropriation. The LIA was not, at least not on the same scale, as the sanctions froze its assets. 

Today, the LIA is worth approximately $70 billion, according to the latest valuation released by the fund in October 2024, up from $40 billion at its founding in 2006. Unofficial estimates have suggested its value is even higher. The fund’s true value remains a mystery, either because the fund lacks knowledge of the full scope of its assets or because the LIA is unwilling to disclose it.

The fund has worked with a variety of international auditors with the aim of producing a full audit of its holdings, but it has not been completed. At $70 billion, the LIA would be the second largest sovereign wealth fund in Africa and the thirty-fourth largest in the world.

Approximately $33 billion of its total assets are frozen, according to the LIA, with the non-frozen amount representing assets located inside Libya.

Libya thus finds itself in the unusual circumstance of being in ownership of sums of money that are reportedly equal to almost two years’ worth of the national state budget – and more than many countries’ annual GDP – which are nevertheless sitting in various frozen accounts around the world. 

The Central Bank holds $17-20 billion of LIA assets in foreign accounts.34 It manages these funds as its own, a practice that the Panel of Experts says is non-compliant with the UN sanctions regime.35 Sources in the LIA were unable to confirm whether the funds held by the Central Bank constitute part of the $33 billion the LIA says are frozen.

D. Recent Political and Economic Tumult

If the LIA emerged from the turbulence following the revolution relatively unscathed, the same cannot be said of most Libyans. Despite the country’s oil wealth, the state has failed to provide essential services to its citizens – except for a tiny set of elites.

Today, the economy continues to be heavily dependent on oil revenues, making up 97 per cent of exports, but Libya’s leaders have barely made any effort to diversify for the future.

Meanwhile, the country overspends relative to its oil revenues, while billions of dollars remain unaccounted for due to an opaque oil economy that since 2021 operates, essentially, on a barter system. Billions of dollars invested in infrastructure improvement designed to raise oil production have shown no return. Poverty rates are climbing and unemployment – especially youth unemployment – is soaring. Libyan banks, meanwhile, suffer liquidity shortages and civil servants do not get paid on time. 

By late 2024, the dire economic outlook had piqued the concern of outside countries, which had grown especially worried about mismanagement in the National Oil Corporation and the Central Bank of Libya; these institutions, together with the LIA, constitute the three pillars of Libya’s economy.

In particular, a dispute between Libya’s rival authorities over control of the Central Bank triggered alarm at the UN Security Council. Greater foreign scrutiny of Libyan financial affairs, including from the U.S. Federal Reserve, resulted in calls by the U.S. for a third-party oversight mechanism to oversee Libyan central bank transactions.

Meanwhile, Libya has slid back into political dysfunction, with two rival governments feuding over control of the country. Neither party was interested in overcoming the years-long deadlock to move toward holding elections. Libya’s elites quarrel regularly, including over budget allocations, but they have also been able to avoid conflict by resolving their differences through transactions serving both sides’ self-interest. 

III. Libyan Views on the Sanctions Regime

Libyan officials and the LIA have long demanded reform of the sanctions regime, arguing that the restrictions have compromised the fund’s growth and are punishing Libya for actions taken by Qadhafi almost fifteen years ago. The Libyan public, however, tends to see the sanctions as a welcome safeguard, protecting national wealth from instability and graft.

A. Libyan Investment Authority’s Stance

The LIA’s long-running complaint about the sanctions regime has been that it has prevented the fund from achieving its main goal of preserving and building the wealth of the Libyan people.

As a former LIA executive told Crisis Group, “opportunities to grow [the] LIA have been squandered”. He contrasted the LIA’s growth to an estimated $70 billion to that of Qatar’s wealth fund, which started at the same time as the LIA with an undisclosed value in the tens of billions, grew to $60 billion in 2008 and today is worth over $500 billion. He and current LIA staff have called for reforms to the sanctions regime so as to prevent the “further dissipation” of assets. 

According to the LIA, sanctions have jeopardised the fund in five main ways:

First, a large amount of the LIA’s assets invested before the sanctions came into effect reached maturity and have been sitting in overseas financial institutions as cash, since sanctions had, until the reforms of January 2025, forbade these from being reinvested.

This money, estimated to be in the ballpark of $20-33 billion, lost value over time because of inflation, even though interest rates in recent years have risen. Making matters worse, some accounts holding cash from matured bonds were subject to negative interest rates for a period of time, magnifying the financial losses.

Secondly, even when assets are not held in cash, the sanctions prevent the LIA from trading or otherwise adjusting its investments, which in the fund’s case are a diverse set of holdings including stocks, bonds, real estate and other assets.

As the Panel of Experts has pointed out, only activities connected with the “routine holding or maintenance of frozen funds” are allowed; active management of frozen assets is not.

A financial expert called the LIA’s situation “not very fair”, as shareholders who invest in publicly traded companies do so on the understanding that they can sell their shares if business deteriorates or economic circumstances become unfavourable.

The LIA, on the other hand, is denied the opportunity to divest from a failing asset. “Reinvesting the money would be responsible management of the assets”, an LIA staff member told Crisis Group, “but this is not happening”.

Staff at the fund also point to opportunities they have missed over the last decade due to being blocked from buying stocks as markets surged. 

Thirdly, the LIA continues to pay professional fees to outside firms, including for the management of assets and legal services. The sanctions regime permits the payment of “reasonable professional fees” for the “holding and maintenance” of frozen funds.

While financial professionals are barred from managing LIA assets in the usual sense of buying and selling assets to achieve better returns for their clients, in many cases they charge the LIA the same fees that they assessed before the asset freeze.

In a striking example highlighted by the Panel of Experts on Libya, fund managers holding a frozen portfolio of the Libyan African Investment Portfolio, a sanctioned subsidiary of the LIA – received $178.89 million in management fees between 2011 and 2023. During that time, the portfolio grew by only $3.29 million.

The LIA also complains that custodian banks and asset managers contracted to manage billions of dollars do not provide them with information about their frozen assets or even answer their calls. “They won’t even respond to simple requests”, an LIA manager said. 

Fourthly, the complexity of international sanctions and their licensing procedures makes the LIA’s work more onerous, often at the expense of the fund’s growth. LIA staff describe the difficulties of navigating not just the UN sanctions but also sanctions regimes designed to implement the UN sanctions in various national jurisdictions.

While licences could give the LIA permission to pursue certain activities, LIA employees told Crisis Group that getting them is time-consuming, in part because they have to seek authorisation not only from the Council but also from EU countries, the U.S., the UK and other states.

Firms overseeing LIA funds sometimes failed to transfer dividends, interest income and cash into the investment authority’s frozen accounts due to concerns about the absence of particular licences. 

Fifthly, the LIA says the sanctions taint its reputation and impose heavy compliance and legal burdens on international firms doing business with the fund. As a staff member of the Libyan African Investment Portfolio explained, “It’s not comfortable to be an investor given the sanctions constraints”.

An investment expert went further, saying a sanctioned institution “is like a minefield. You don’t just try to avoid the mines, you stay as far away from the minefield as possible”.  Sanctions reform, LIA staff say, would soften these perceptions and make it easier to work with partners.

The LIA crafted the investment plan that it submitted to the Council in 2024 with the goal of tackling these various challenges. The plan made five requests to reinvest assets and otherwise adjust the LIA’s holdings, to the tune of around $8 billion. Among the proposals put forward were requests to reinvest cash held at the Euroclear bank, bonds that have matured and cash resulting from matured securities.

The fund also sought permission for the Arab Banking Corporation – or Bank ABC, a bank headquartered in Bahrain – to trade equities and securities, while maintaining the asset freeze, and for the LIA to close its accounts with the HSBC bank, as that bank had requested. In defence of the plan, its authors detailed hundreds of millions of dollars in losses due to sanctions-related effects. 

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Russia, Libya and the Kremlin’s playbook

for fragile states

Tarek Megerisi 

Priming the pump

Alongside these structural changes, a massive fuel smuggling scheme between Saddam and Russia took off, which the new NOC tried to mask.

Moscow needed Libya to bypass Western sanctions on Russian fuel exports. Russian petrol and diesel exports into Libya suddenly exploded in September 2022, rising from sporadic shipments of a few thousand barrels per day (bpd) delivered over several months to almost 20,000 bpd that month alone. Russia did this covertly, with Turkish companies often acting as brokers.

By spring 2023 the exports had reached almost 90,000 bpd, exceeding 100,000 bpd by January 2024. (They only declined after that as Ukrainian attacks on Russian refineries increased.) Russia exported $2.6bn worth of fuel to Libya, making it the largest seller of fuel and covering 28% of all the country’s imports (up from 4% in 2021).

But things seem to work the other way around, too. It is illegal to export fuel from Libya. Yet according to Libya’s audit bureau at least 40% of Libyan fuel is smuggled out of the country using a combination of land and sea routes.

This looks a lot like another Saddam and Wagner collaboration. The sea exports go through Benghazi’s old harbour, which conveniently sits adjacent to the Brega company’s marine oil terminal at Ras al-Minqar.

This harbour was previously used by Saddam Haftar to export scrap metal, but has been gradually upgraded to allow for covert and more efficient fuel transfers. Between March 2022 and September 2024, 48 tankers of ever greater sizes were identified making 185 visits to the harbour, and smuggling at least 1.125 million tons of diesel.

These tankers then either offload via ship-to-ship transfers near Malta or Sicily or they smuggle fuel directly to destinations such as Italy or Albania. Italy estimates that it alone loses $3bn a year in unpaid taxes from illicit fuel smuggled in. The paperwork on seized vessels often points to Brega being the provider of fuels, despite it not having the legal authority to export.

Convoys of fuel trucks have also been spotted going into Jufra airbase. From there, Wagner smuggled them onwards to other theatres such as Sudan and Mali. The other major route is through the southern city of Sebha, which saw an increase in delivered fuel from 600,000 litres per day in September 2022 to 1.2m litres per day by summer 2023.

This is far more than a city of roughly 200,000 could need. Ironically, Sebha routinely suffers from some of the worst fuel shortages in Libya, with most of these deliveries continuing onwards to Niger and Chad. Again, Russia is reportedly using these deliveries to deepen ties with Chad’s president Mahamat Déby and supply allied forces in Sudan.

Afrikansky Korpus

Wagner and Saddam Haftar’s fruitful relationship was crudely interrupted when Prigozhin’s jet exploded, killing him, in August 2023. But by then, Libya was the linchpin of the African entente roscolonial—despite Moscow’s lack of formal political relations with Tripoli. This meant Moscow was using its Libya platform to bolster operations elsewhere on the continent, enhance its profitability and weaken Europe. The biggest change was the formalisation of Russia’s involvement with the Haftars.

Dropping the front

In Prigozhin’s place, General Andrei Averyanov—notorious for leading the GRU unit dubbed “the bridgehead of Russian interference in Europe”—was appointed to oversee PMC operations. Alongside him, deputy defence minister Yunus Bek-Yevkurov was appointed head of Africa Corps, the Wagner successor. Yevkurov had even visited Khalifa Haftar the day before Prigozhin’s “accident”, framing this as “the first official” Russian military trip to Libya. Yevkurov and Averyanov spent the rest of the summer touring Wagner’s African equities, again starting with Libya.

This resetting of the relationship stratified Africa Corps deployments. The relationships with Libya, the logistical hub of Russia’s Africa cluster, were formalised to maximise its utility as a forward operating base. Meanwhile, more dangerous theatres like Mali retained the PMC model. By December 2023, the Russian ministry of defence officially began recruiting for Africa Corps with the aim of building it into a 20,000 strong legion.   

The formalisation of Haftar’s relationship with Africa Corps allowed the Kremlin to salvage a strained relationship that was also being eroded diplomatically. Since 2021, Saddam and Wagner’s smuggling partnership had financed the LAAF’s consolidation and allowed it to retain a patronage network (the system of political power in Libya). Alongside this, LAAF-Russian cooperation within a broader alliance involving the UAE had given Haftar some geopolitical ballast that allowed him to survive the tense years after his failed assault on Tripoli.

Nevertheless, relations between Prigozhin and Khalifa Haftar remained tense. Wagner’s autonomy in Libya to the extent of barring the LAAF from bases it technically owned without Russian approval was a humiliation for the field marshal. Wagner operatives had also damaged relations with major Libyan tribes and if Haftar wished to regain autonomy, he would either have to rebuild the tribal forces that were once the backbone of the LAAF or use tribes to build up the praetorian units under his relatives.

Over 2023, the US began a diplomatic push to try to wean its one-time asset off its dependency on Russia. CIA director William Burns visited eastern Libya in January, followed up by assistant secretary of state Barbara Leaf in March. Haftar, for his part, resurrected his pre-2019 strategy of using US-Russian rivalries to his benefit, telling visiting delegations that he needed them to provide him a military deterrent against Turkey to break from Russia. 

This would include Turkish military withdrawals alongside supplies of advanced aircraft and patriot missiles. But the threat perception of Turkey declined as Ankara grew closer to Abu Dhabi and built commercial partnerships with the Haftars, culminating in cooperation with Saddam in the energy sector.

Eventually Haftar and the US found a middle-ground of continuing relations through a process to unify Libya’s militaries; which helped to legitimise Haftar, politically bolster his position, and strengthening his praetorian units without him having to give anything in exchange.   

Any potential US gains were wiped out by Yevkurov’s offer to replace Wagner with an official Russian presence. This offer likely appealed to the ageing Haftar. After all, he was far more familiar with state-to-state relations than these new-fangled (and disrespectful) PMCs. Moreover, an official relationship would bolster Haftar geopolitically: it would improve his position in the region, shore up the defence Russia already provided and most importantly could even revitalise his aspiration to rule all of Libya.

In September 2023, Yevkurov helped the Haftars stabilise a volatile situation after a catastrophic flood devasted eastern Derna. Haftar then returned to Moscow for the first time since storming out in January 2020, where he met Putin to frame the new relationship. Haftar saw this as an opportunity to upgrade the LAAF; demanding new aircraft, air-defences, and training for pilots and special forces. In exchange, existing Russian bases could be upgraded to enhance Russia’s presence there.

These were substantially similar discussions to those Haftar held with US representatives; the biggest difference being in the response he received. Haftar’s requirements resonated with a Kremlin that had clarity over what it needed from Libya, a long-term presence, and was less sensitive about exclusivity given that Russia felt safer amid its broader partnership with the UAE, and to a lesser extent

Turkey. Ultimately Russia was seeking to build something, meaning Moscow and Haftar could find an accommodation; whereas the US was merely seeking to block Russia, with no grander vision for Libya in place.

***

Tarek Megerisi is a senior policy fellow with the Middle East and North Africa programme at the European Council on Foreign Relations. His work mainly addresses how European policy making towards the Maghreb and Mediterranean regions can become more strategic, harmonious, and incisive—with a long-term focus on Libya.

_____________________

Milad Elharathi

Changes in Leadership and State’s

Political System

The quick current revolt spread rapidly from Tunisia to Egypt, and then from Egypt to Libya, in one timing date, threatening entrenched regimes and the status quo. For example, Libya’s revolted turned into a bloody civil war, and spilling over of armaments, everywhere in the country.

By the end of 7th of February 2014, the General National Congress ended its mandate, which led into political vacuum in the country. In contrary, there are effectively two rival governments. One is in Tripoli, where is a coalition of Islamist armed groups from (Msrata).

The other is in (Tobruk), where a newly elected Council of Representatives (COR) and a cabinet have convened by the majority of the Libyan people. While, in Tunisia, the Muslim movement (Nahdi Party) led the country into social unrest, only in the end of January 2014, and after four years, Tunis launched its new constitution.

In addition, Egypt and its revolt turned into Christian-Muslim confrontations, and it turned its destination twice (January uprising, 2011 and the road to 30 of June, 2013) with widespread of unrest and instability between the civic moments and the ousted Brotherhood.

This progress led by the military rule under the Commander, Assisi, who called his Egyptian people to march against the Brotherhood presidency, Morsi, in 30, June, 2013, with widespread of unrest and instability between the civic moments and the ousted brotherhood.

As result, this move, also, led to create interim government, and hunting all the brotherhood elites and became under arrest. While many observers have drawn matches with the rising of the American control of the International Order and the domination of the Western alliances, and its major leading role in combating terrorism, and the eastward spread of democracy to Eastern Europe, the outcome of the Libyan revolt is far from bringing political and social stability in this stateless.

This popular revolt has challenged authoritarian rule in the whole region, and highlighted the widespread desire for a responsible government.

Libya, in particular, is an evidential and exclusion example among other Arab revolts, that NTO played a major powerful militarized intervention in the name of supporting Obama’s terminology of “ Arab Spring”. In this regard, Libyan revolt could be described a career of immune factor towards democratic transition and transformation, revolts stolid in, overthrowing some regimes and shaking each other.

Four years (2010/2014) have passed since the arrival of the Arab uprising, turmoil, and leaders and decision-makers have been trying to analyze such historic transformation in order to find traction in the region that has been looking different from bad to worse, with new dynamics, unknown elites and political topography.

Observers noticed, during these events, the timing of the whole changes in leadership and state’s political system, and new elites occupied the political landscape of the region. This would suggest that the external factor was an essential motive in advancing such stages of sudden changes in the region.

Libya’s political development since

the Arab Spring

Libya aſter the assassination of Qaddafi is divided. Since mid-2011, the country has spiraled toward civil war. Rival armed groups are fighting for control of Libya’s capital. In the east, the Libyan armed forces led by a retired general, (Kalifa Haſter) is shelling Islamist armed groups in and around Benghazi for 6 months, during 2014.

By the mid-October 2014 the Libyan military brigades have entered the city heat of Benghazi and declared curfew from mid-noon to the next morning . In addition, there are effectively two rival governments.

One is in Tripoli, where is a coalition of Islamist armed groups from (Msrata). The other is in (Tobruk), where a newly elected Council of Representatives (COR) a cabinet have convened by the majority of the Libyan people.

Libya’s armed forces, both official and unofficial, are essentially at war with one another, with each faction strengthened by an arrangement of tribes and towns. As a result, Libya’s armed forces, both official and unofficial, are essentially at war with one another, with each faction bolstered by assemblage of tribes and towns.

Moreover, we are oſten lured toward a one-dimensional reading of Libya’s turmoil. It is easy to explain Libya’s breakdown as a political struggle between Islamists and secularists: the Justice and Construction Party (JCP) affiliated with the Muslim Brotherhood (MB) and more jihadi factions like Al-Qaeda versus the secularists. Components of all these dimensions are at play, but none of them alone has sufficient explanatory power, either political solutions to the elusive revolution.

At its core, Libya’s instability is an intensely local and regional affair, stemming from deeply entrenched sponsorship networks batiling for economic resources and political power in a state tortured by a gaping institutional vacuum and the absence of a central mediator with a multitude of force .

In crux, Libya suffers from a balance of weakness among its political factions and armed groups; no single entity can force others to act purely through coercion, but every entity is strong enough to veto the others . The current panorama of political polarization and the broken security sector presents the Western led coalition of 2011 military campaign with profound dilemmas.

A previous approach of supporting state institutions is problematic when those institutions, whether the governmental bodies, are successfully split between two warring factions.

Correspondingly, a long-planned determination to train the Libyan army can only proceed aſter a ceasefire and a political compromise that produces a clearly defined road map toward the reform of security institutions .

Consequently, the eventual solution for Libya’s security anguishes lies in context-specific security solutions, a broad political pact and constitution. This is an area where outsiders can lend advice and measured assistance, but where the ultimate burden must be borne by Libyans themselves, solutions for Libya are only Libya solutions

The Islamist Armed Groups

Too oſten, Libya’s armed groups are thought to be outside of Libyan society and of the state. In fact, they are deeply intertwined into both. One of Libya’s challenges is that nearly all the armed groups claim legitimacy from their affiliation with competing organs of the weak and fractured government.

Government subsidization of these groups arose from the enfeebled state of the formal army and police . The results of this prearrangement in Libya have been mixed and highly dependent on location.

In some homogenous communities where the armed groups enjoyed organic roots and social ties, the forces played a role akin to a local gendarmerie, performing functions like tranquillizers interdiction, guarding schools and hospitals, and even street maintenance.

But in mixed or strategically important locales, namely Tripoli and Benghazi, they have evolved into dangerously parasitic and destructive entities, pursuing agendas that are at once criminal, political, and ideological

Conflicting to some expectations, no one faction is blameless on this front.

Islamists, armed groups have all used force or the threat of force to pressure the country’s elected institutions, capture smuggling, or seize strategic assets like border checkpoints, oil facilities, armories, ports, and, perhaps most importantly, airports.

The Islamist armed groups in the east reflect that region’s longtime alienation from the center and increasing embrace of moral devotion and transparency.

***

Milad Elharathi – Visiting Fellow, at Clare College, University of Cambridge UK

____________________

Russia, Libya and the Kremlin’s playbook

for fragile states

Tarek Megerisi 

Neighbouring sounds

Finally, the network also seems to have ambitions in Libya’s neighbouring countries. In December 2020 the TBZ deployed to south-western Libya. There Haftar’s unit entered into a low-burning series of skirmishes with GNA-affiliated forces to gradually claim control of the city and region, relying on intelligence, logistical and surveillance support from Wagner operatives stationed nearby in Brak al-Shati military airbase.

The oasis city of Sebha is notable as a crossroads for smuggling routes from Chad and Niger into southern Libya, as well as gold that is mined in southern Libya and the Tibesti mountains just across the border in Chad.

In September 2021 the TBZ again deployed. This time it was against the remnants of Chadian opposition group FACT (which had previously fought alongside Haftar in 2020, based out of Jufra). Back then, Wagner distrusted the group because of its close relationship with France, and now the group was licking its wounds after a failed attempt to invade its homeland earlier that year.

The TBZ struggled, suffering significant casualties over a four-day battle. But laser-guided artillery and airstrikes of foreign origin allowed Saddam Haftar’s alliance to significantly degrade FACT’s force. The rebel group blamed France for providing this foreign support. But it is more likely that it came from Wagner. Airstrikes from Jufra would have been easier to deploy and conceal than any French activity, and Wagner had experience working with the LAAF as spotters for guided artillery during the Tripoli war.

This operation could also be read as initial alliance-building from the Emirati-Russian coalition with Chad’s new dictator, Mahamat Déby, the son of the former autocratic president Idriss Déby who had been killed by rebel forces during the recent incursion. This coalition’s relationship-building with the new president would eventually displace France in N’Djamena and lay the ground for Chadian support for the RSF in Sudan as Russia found the opportunity to pursue its “first approach” once more in Chad.

Whatever the aims, when the battle ended, the TBZ with Wagner was able to enforce greater control over the region’s smuggling routes. This bolstered its revenues from people and drug smuggling, and Libya’s gold mining. Most of all, however, it enabled fuel smuggling.

There will be blood

Wagner’s modus operandi was always to lever its military support for frail dictators against a nation’s assets. By 2020 this model was already well-established in Syria and the Central African Republic. But no Wagner target-state ever had quite the resources of Libya; nor quite the international congestion around it. Libya underwent Moscow’s most sophisticated example of asset hijacking, as the country became a chip in the Kremlin’s efforts to squeeze out geopolitical rivals and eventually evade international sanctions.

Securing the bag

When Wagner then abandoned Haftar on the Tripoli front from May 2020 onwards, it did not just fall back to secure Jufra and other military bases. It pre-emptively claimed Libya’s oil installations. Wagner operatives and Syrian mercenaries (flown in by who else but Cham Wings) moved into the Ras Lanuf refinery and the oil crescent’s export terminals; seizing worker housing, large quantities of aviation fuel, and installing powerful S-300 air defence systems.

Simultaneously, other Wagner units alongside Sudanese mercenaries secured oil fields in the south, notably Libya’s largest field al-Sharara, reinforcing an oil blockade that had begun in January 2020.

This control over oil flows gave Russia the cards for its failed solution to the conflict. As the ceasefire that followed the Cairo declaration slowly fossilised, Europeans and Americans tried to transform a misshapen ceasefire of necessity into a more sustainable peace. Moscow, for its part, flexed its control over Libya’s oil. Not only did it continue enforcing the 2020 blockade to shape negotiations, but it used its position to pre-emptively move against an American initiative with the UN and the NOC that would have led to the demilitarisation of oil sites.

In September 2020 the Kremlin snuck one of its GNA assets Maitiq (the Sarraj deputy mentioned in the “Losing the war” section of this paper) to a Russia-Africa summit in Sochi. He was joined by Khaled Haftar, who had been given military responsibilities and designated the official interlocuter for Russia as part of Haftar’s post-war consolidation.

In Sochi, Russia brokered a deal that would see oil exports resume and a new committee formed to manage and distribute oil revenues between eastern and western Libya. The deal outraged the elite in western Libya. Sarraj and key financial players such as the central bank governor rejected it as opaque, illegal and favouring Haftar.

Maitiq, who had no authority to make such a deal, was blocked from going to Sirte for its signing ceremony. Despite this, the mere existence of the rejected deal now meant the GNA and NOC looked like the bad guys.

This pressure worsened as the US, UN and key European states pushed Libyans to accept the Sochi deal as an important step towards stability, a permanent ceasefire and new political process. But acquiescing to this deal represented nothing of the sort. Rather, it legitimised the divvying up of Libya’s oil wealth and was the first major chip in the NOC’s integrity.

It was also a boon for Russia’s stature in Libya and provided another stream of funding to help reconstitute Haftar in the east after his defeat. Finally, it meant the UN and the West had discarded perhaps the strongest leverage they had to expel Wagner from Libya’s oil sites.

They had also given Russia a pretext for future shutdowns—since the full administrative provisions of the deal could never have feasibly been implemented. As with the Cairo declaration, embracing the Sochi deal happened under the illusion of securing a short-term stabilising win that the UN could improve later and despite warnings from Libyans. The oil flowed once more. But Russia retained control.

Flexing control

In the spring of 2022, a couple of months after Russia’s all-out invasion of Ukraine, oil prices were rocketing and Europe’s energy crisis was already well under way. Meanwhile Libya’s political divisions had worsened in the wake of the 2021 electoral debacle. Dbeibeh, the internationally recognised premier, had outlasted his mandate, as the elections he was appointed to oversee failed.

This led the House of Representatives to appoint Bashagha as prime minister in a deeply flawed process (that would have installed half of the Turkish-Russian dream team for 2020 into power). But Dbeibeh exploited the procedural violations to cling on to power. Then on April 18th Libya’s oilfields, then its oil terminals, began to shut down.

This was framed by Haftar-aligned media as a popular protest against Dbeibeh’s unwillingness to cede to Bashagha. But it was an LAAF operation that could not have happened without the support of the Wagner operatives camped at these installations.

The shutdown cut off key Italian and other European refineries from a major source of energy supplies. Shortly after the oil blockade, the chair of the NOC sent a letter to Libya’s chief prosecutor asking him to take action against the fuel-smuggling tankers. But the blockade went on for three more months until the UAE negotiated a breakthrough deal between Dbeibeh and Saddam Haftar.

The terms of this deal were that Haftar would switch the oil back on, but he could appoint a new chairman of the NOC and would get additional funding from the body. This was the natural evolution of the Sochi deal: it again exploited the crisis of an oil blockade to solicit huge financial and structural concessions for Haftar at the cost of the structural integrity of both Libya and the NOC.

The new NOC chair, Farhat Bengdara, was a former central bank governor with no experience in the oil industry. According to those familiar with the deal, he was appointed as a result of his financial expertise. [20] Alongside this change, $6bn was released by the Central Bank of Libya, ostensibly as financing for the NOC.

Yet it seemingly ended up moving through a subsidiary to Saddam Haftar who then allegedly used it to pay Wagner. Within a year, Saddam’s loyalists were appointed to management positions over key subsidiaries, most notably the Brega Company that was responsible for all of Libya’s fuel imports.

***

Tarek Megerisi is a senior policy fellow with the Middle East and North Africa programme at the European Council on Foreign Relations. His work mainly addresses how European policy making towards the Maghreb and Mediterranean regions can become more strategic, harmonious, and incisive—with a long-term focus on Libya.

_____________________

I- Introduction

Libya’s sovereign wealth fund, the Libyan Investment Authority (LIA), has been under UN Security Council sanctions since 2011. Founded by Muammar al-Qadhafi in 2006, the LIA is now a $70 billion fund with assets ranging from stocks to real estate. Until the Council decided to let the LIA reinvest cash assets in January 2025, the sanctions regime on the investment authority had not changed, aside from minor modifications to the asset freeze made by the Council.

This regime requires that all states freeze any money held in their jurisdictions that belongs to the LIA or those acting on its behalf. The sanctions also apply to the Libya African Investment Portfolio, an Africa-focused investment fund under the LIA’s ownership.

Libyan authorities have long called on the Council to modify the sanctions, and in 2023 the LIA stepped up its campaign for sanctions reform. It drafted an investment plan, proposing five actions for the Council that it said would mitigate the sanctions’ harmful impact on the LIA’s value.

 The Council responded in 2023 by pledging to consider changes to the asset freeze. A year later, the LIA proceeded to submit its investment plan, which the Panel of Experts, a Council-mandated group that advises on the sanctions’ implementation, reviewed. In early January 2025, the panel made recommendations to the Council concerning how to respond to the LIA’s requests.

Soon thereafter, the Council decided to grant some of the LIA’s requests, notably by allowing the fund to reinvest its cash reserves. 

This report, a joint output of Crisis Group’s Middle East and North Africa and U.S. Programs, details the history of Security Council sanctions on the LIA. It examines various views of the sanctions, as well as the Council’s recent adjustments, and recommends further measures aimed at removing curbs on the fund’s growth and setting a path to long-term reform.

The report is based on dozens of interviews with diplomats, financial professionals, lawyers, sanctions experts, Libyan politicians, executives and civil society figures in Washington, New York, Tripoli, Tunis, Rome, London and elsewhere from 2022 through early 2025.

It is also informed by interviews with LIA staff, including the chairman, and a review of documentation, including unpublished material the LIA provided to Crisis Group. The UN Panel of Experts for Libya declined to be interviewed. Most, but not all, Libyan interlocutors were men, reflecting the gender-based power divide in the country, while women and men were represented approximately equally among international interlocutors such as diplomats and experts. 

II- The History of Sanctions on

Libya’s Wealth Fund

…

A. Protecting Libyans from

Qadhafi’s Abuses

Qadhafi established the LIA in 2006, just after the U.S. lifted sanctions on the country in exchange for his commitment to dismantle Libya’s nuclear program, destroy its chemical and biological weapons stocks, and renounce terrorism, and three years after the UN had lifted the sanctions it imposed in the wake of the 1988 Lockerbie air crash.

Starting with $40 billion in capital, the LIA’s initial investments spanned sectors including finance, agriculture, real estate and hydrocarbons.

Its stated purpose was to invest Libya’s oil wealth abroad for the benefit of future generations. While it was widely regarded as a slush fund for Qadhafi and his cronies, it nonetheless increased in value to approximately $56 billion by the start of the civil war. 

When war broke out in Libya in 2011, in the midst of uprisings across the Arab world and following mass protests in the country, the UN Security Council authorised a no-fly zone in Libyan airspace and enacted stringent sanctions – a travel ban, an arms embargo and an asset freeze – against powerful Libyan institutions and individuals.

Soon afterward, the Council froze the funds of Libyan economic institutions including the Central Bank, the National Oil Corporation and the LIA. Member states feared that Qadhafi would plunder these accounts to fuel the violent repression of his opponents.

With the fighting still under way in mid-2011, foreign backers of the anti-Qadhafi forces recognised the rebel-led National Transitional Council (NTC) as the legitimate governing authority of Libya. They requested that Libyan state funds be put at the NTC’s disposal to pay for salaries and other state services as well as for rebuilding.

The UN responded in September 2011: The General Assembly formally recognised the NTC, and the Security Council lifted sanctions on the Libyan National Oil Corporation and one of its subsidiaries.

In October 2011, the Security Council also modified the asset freeze on the Central Bank of Libya, the LIA and other listed Libyan financial institutions, making funds inside Libya available to the interim authorities while maintaining the freeze on funds held outside the country.

In December 2011, the Security Council removed the sanctions on the Central Bank of Libya and the Libyan Foreign Bank, thus lifting restrictions on all the Libyan institutions that it had blacklisted during the civil war – except for the LIA. The fund’s foreign assets remained frozen. 

B. Prolonged Sanctions

It is a fluke of history that the UN kept the LIA sanctions in place after the revolution. Council members were reluctant to lift the restrictions on the LIA when it delisted other institutions because, at the time, the fund had no board of directors and its head was a holdover from the Qadhafi regime.

The Council did commit to delist the LIA and its subsidiary, the Libya African Investment Portfolio, “as soon as practical to ensure the assets are made available to and for the benefit of the people of Libya”. 

Yet when a new board chairman was finally appointed to the LIA in April 2012, he advised the new Libyan leadership to wait until the LIA had completed a full audit of its assets before requesting that sanctions be lifted.

Shortly afterward, the country tipped toward chaos again, with rival factions fighting on the streets of Tripoli. The Security Council was reluctant to lift the sanctions amid escalating violence. Its members worried that the LIA’s funds could be used to fuel the unrest and could not be managed effectively at a time when the Libyan authorities could not maintain basic order.

They hoped that elections, scheduled for June 2014, would bring about a unified government with a popular mandate and conditions more suitable for unfreezing LIA assets. 

The 2014 elections were contested and split [Libya] into two rival authorities, one in the east and another in the west, each backed by a military coalition.

That did not happen. Instead, Libya continued to lurch from crisis to crisis and the sanctions remained in place. The 2014 elections were contested and split the country into two rival authorities, one in the east and another in the west, each backed by a military coalition. Both claimed to be legitimate. They were intermittently at war until 2020.

As this new divide between east and west took hold, a feud over the control of LIA also broke out. Two rival managers – Hassan Bouhadi, working from Malta with the backing of the government in Libya’s east, and Abdulmajid Breish in Tripoli, supported by powerbrokers in the west – claimed to be the legitimate LIA chief executive officer.

A leadership feud within the Tripoli-based camp further complicated matters. In June 2014, the Tripoli government sought to sideline Breish and appoint Abderahmane Ben Yezza as interim chairman in his place; then, in late 2015, a new UN-backed government in Tripoli installed a loyalist, Ali Hassan Mahmoud, to head the fund, but throughout this period Breish refused to step down. In the meantime, another former chairman, Mohsen Derrigia, who had been appointed in 2012 and was replaced by Breish in 2013, asserted that he was still the rightful leader of the LIA. 

By that point, at least four people were claiming to be boss. Their competition resulted in the intermittent use of violence and intimidation, with reported cases of militias using force to eject or instal those who claimed to be the LIA’s leaders at the fund’s headquarters in Tripoli. As the Panel of Experts wrote in 2017, “the security personnel in control of the Tripoli Tower has the final say as to who occupies the Authority’s head office, a situation that is not tenable”. The feud was also repeatedly litigated in courts in Libya and abroad. 

Jockeying over the LIA’s helm finally ended in 2020, when a court in the United Kingdom ruled that Ali Hassan Mahmoud was the legitimate chairman by virtue of having been appointed by the internationally recognised government of Libya. The ruling in effect ended challenges to his leadership. It also coincided with a short-lived political calm following a UN-mediated negotiation to appoint a unity government under a new interim prime minister, Abdulhamid Dabaiba, in early 2021.

While the government split again into two rival administrations in 2023, the LIA leadership based in Tripoli was, for the most part, undisputed.

________________________

Milad Elharathi

Abstract:

Libya is the most predisposed to internal divisions and instability. At the same time it’s also the only North African state to have failed to do away with the ethnic and tribal barriers and to create a national identity.

The main barrier to achieving this goal has been and still is geography and wealth along with the tribal segmentations in the country. This article presents current state of affairs in Libya after the uprising which led by the NATO’ campaign in March 2011.

In other word, the analysis is based on the context of the “Arab Spring”, in which we under the aspects of the current Libya’s military politics, and analyzing the prospects of the ongoing democratic control and the transitional attempts from the revolutionary to the institutional state status.

Geography and Wealth

First of all, by now we are familiarized with the idea that geography 1 plays almost always, if not always, the determining role in how a state evolves internally. The difference between states is that for some geography has a negative impact, while for others a positive one.

Libya is one of those states which is geographically disadvantaged, its territory having no major sources of water, no mountains or fertile areas (like the other North African countries have for example) which to enable large-scale agriculture.

It is simply a desert. In the absence of a geographic element which to inhibit ethnic and tribal differences, isolated communities have persisted (usually formed around sources of water) each with its own identity, in some cases dating back hundreds or thousands of years.

In addition, the only important resources of the country are oil (which for example is of higher quality than the Russian oil) and gas, but neither of those did nothing to contribute in a positive way in homogenizing the Libyan population, mostly because they were always under the control of a small group of people.

In contrast, energy resources have deepened the division within Libya due to the emergence of two producing regions, one producing mainly oil and the other producing mostly gas, each with its own bureaucracy and infrastructure.

Although, until the fall down of the Kaddafi regime in October 2011, Libya was a highly centralized and stable state, the authoritarian apparatus, the army and the political system created by Kaddafi having maintained the status quo for decades.

But none of those contributed in any way in creating a national identity, which is why when the system malformed, the divisions that until than had been more or less dormant, resurfaced.

Of course not only geography played a role in shaping Libya, but also it is the main reason, including its wealth with limited population. Libya is a major exporting oil country in the region In fact; Libya holds approximately (46.4 billion) barrels of oil reserves, the largest in Africa and in close proximity to Europe.

In 2010, Libya produced an estimated (1.8 million barrels) per day bbl./d of the world’s 88m barrels a day of oil of which (1.5 million bbl. /d) was exported. The ousted regime had planned to up its production to 3 million barrels a day by 2020, and further develop its natural gas sector in an effort to stimulate economic recovery against the backdrop of US and international sanctions during the 1980s and 1990s.

France, Britain, Italy and Spain accounted for nearly (85%) of Libya’s oil exports. Of these nations, Italy received over (28%) of its total oil imports from Libya which amount to (370,000 barrels) of oil per day .

Italy’s role was also outstanding as Silvio Berlusconi’s government offered the use of seven air and navy bases for the Libyan operation at the early stages of the military operations .

Regarding France, it receives (17%) of its oil from Libya, along with Britain who receives (8%) of its oil from Libya as well. It is also interesting to point out that France, UK and Italy were the first NATO countries that undertook sorties and military logistical assistance across Libya as part of collective efforts to enforce a no-fly zone during the initial phases of the intervention

Furthermore, Libya is, also, awash in natural gas resources with an estimated capacity (of 55 trillion cubic feet) (TCF) of proven natural gas reserves. According to estimates by the International Energy Agency prior to the upsurge of popular revolution, Libyan production by 2012 could be increased by as much as 50 percent if planned pipelines and gas-fired power plants would have been built, but this is not happened due to the conflict over the oil ports of (Zwetina) and (Ras Alanowf), in the east part of Libya.

The natural resources of Libya attracted NATO members to organize and lead a major military campaign in the beginning of the second decade of this century.

Certain advanced questions remained without imperative answers; and how such NATO’s intervention, in supporting Libya’s revolt that created a large amount of debatable political and economic impacts on Libya’s affairs? The above arguments could explain why the wealth factor in Libya is important as the geographical one.

The Emerged Internal Divisions

One of the ways in which internal divisions resurfaced was the emergence of various well-armed militias in cities like (Musrata, Benghazi, Dirna, Sabah, or Zentan and Tripoli). While Kaddafi was still alive they had a common goal and therefore posed no threat, but when the former dictator was physically eliminated (possibly since before that) differences between these groups and differences between the militias and the new leadership in Tripoli started to take birth.

Ironically, the new government in Tripoli was originally forced to turn to the militias for maintaining internal order, which otherwise would not have been possible. Gradually though, they became the biggest obstacle in the way of achieving internal stability and in restoring the government’s authority. And given the large number of weapons the militia’s posses – weapons which originally belonged to the Libyan army.

It is unlikely that the regime in Tripoli will be able to disperse the militias too soon, not without massive external support.

In a fairly limited manner the General National Congress (the body which theoretically governs the country) managed to put the militias in a position of financial dependence, but this did not prevent the occupation of governmental buildings when pressure on the government was needed.

Moreover, it should be noted however, that since before the civil war Italy was hinting to a possible split in two of the country ( as it had had happened in the past) and the NATO commandment suspected that the militias will refuse to disarm themselves. So the countries that granted aid to the rebel cause were aware of the existing divisions in Libya, so what followed the civil war came as no disclosure.

However, most of the Libyan population is divided into four major ethnic groups: Arabs – the bulk of the population (Berbers, Tuaregs and Tebo (Tibbu). Of these, the Berbers and Tuaregs were the ones with the greatest freedom of action, even during the Kaddafi era.

That’s because it’s virtually impossible to control a group which when it feels threatened can simply pass the border into Mali or Niger or take the road to the Sahara Desert, and later return unhindered.

Again, geography prevented effective control, especially in the southern territories. Such an effort would require the continued presence of substantial military forces, which Libya never had. This did not prevent Gaddafi to recruit and equip Tuareg militants into his army in order to fight against the rebel forces.

It was this way that the Tuaregs came into possession of large quantities of weapons, which after the fall down of the Kaddafi regime, they used to foment a rebellion in northern Mali and perform operations in Chad.

It took a direct military intervention by France to push the Tuareg militants out of Mali. The above mentioned problems are amplified by the existence of two centers of power, one in the west – Tripoli – and one in the east – Benghazi. In parallel, both military and intelligence services had been affected by the internal conflict and thus have a very limited operational capacity.

Also, even within the General National Congress there are competing factions. Or, in the lack of a single powerhouse with effective instruments for the exercise of authority, it’s very difficult to solve these internal problems.

In short, the authority of the General National Congress (elected 2012) in Tripoli is further worn by the fact that within its administration there are people who were once part of the Kaddafi regime.

On the one hand this is due to corruption, but also because Libya simply does not have many people with administrative skills. In other words, there aren’t many who can actually govern the country, or what’s left of it.

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Milad Elharathi – Visiting Fellow, at Clare College, University of Cambridge UK

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Emadeddin Badi

The role of armed groups

Meanwhile, armed groups have entrenched themselves deeper into the infrastructure of Libya’s energy economy. In both east and west, militias have embedded themselves in utilities such as the General Electric Company of Libya (GECOL), where operational choices are influenced more by kleptocratic leverage than by institutional standards.

Between 2022 and 2024, an estimated 1.125 million tons of diesel—allocated theoretically for power generation—were illicitly exported from Benghazi’s old harbor. These exports were facilitated through inflated supply requests issued via GECOL, the obstruction of audits, and threats of violence against oversight bodies. The NOC, too, has been drawn into this vortex.

Crony contracting has allowed politically connected firms to secure procurement deals and operational privileges, eroding the firewall between national resource management and elite patronage.

This dynamic accelerated following the 2022 appointment of Farhat Bengdara as NOC chairman in a power-sharing arrangement between the GNU and eastern authorities. Though intended to ease executive tensions, the move entrenched political influence over the corporation’s operations.

Bengdara’s abrupt resignation in early 2025 did not reverse this trajectory. Instead, his tenure left a lasting imprint: a politicized NOC, increasingly leveraged for factional gain rather than safeguarding Libya’s oil wealth. This erosion of institutional neutrality has a fiscal analog in Libya’s monetary policy, where political imperatives now override sound economic management.

At the core of the dysfunction lies the unchecked expansion of the money supply. Independent estimates suggest that the volume of money in circulation now exceeds 170 billion LYD—a level of liquidity that far outpaces productive output or revenue generation. But the deeper concern lies not in the quantity itself, but in how much of it has been manufactured ex nihilo.

Digital monetary creation—the injection of funds into the economy without any corresponding revenue or production—has become the fallback of a political order unwilling to curb spending or enforce discipline. The predictable result has been a cascading erosion of the LYD’s value, a surge in inflation, and a growing public mistrust in the state’s ability to steward its financial future.

As foreign reserves shrink and black-market rates spike, Libya’s monetary system is no longer a stabilizing force; it is a mirror of its dysfunction.

To call this mismanagement is too generous.

This is structural predation, a system designed both to fail and extract. Public wealth is scarcely channeled into services or national development. It is captured, funneled through kleptocratic networks, and increasingly siphoned through untraceable contracts and offshore accounts.

Avenues of reform

Addressing this collapse requires more than fiscal prudence. It demands political realignment. Libya’s economic institutions must be recentered as sites of national governance, not tools of factional financing.

The institutions that govern oil revenues, control disbursement, and oversee procurement must be protected, reformed, and in many cases rebuilt, not just with new laws, but with new incentives, protections, and public visibility.

A credible reform strategy must begin with mandatory public disclosure of all oil contracts, real-time publication of state spending, and a ban on off-budget arrangements. Procurement must be regulated through transparent, competitive systems.

Revenue distribution must be guided by transparency, equity, and public oversight—not by decentralization for its own sake, nor by external stewardship.

Reform must strengthen national institutions while ensuring that public funds reach intended sectors and communities through accountable, legally grounded mechanisms. These are not just technocratic ideals. They are prerequisites for legitimacy and recovery.

International actors—donors, multilateral institutions, and diplomatic envoys—must stop treating Libya’s economic collapse as a mere byproduct of its political fragmentation.

Stability manufactured atop corruption is not stability at all.

While much emphasis is placed on unifying the government, doing so without reforming its fiscal architecture would merely centralize corruption under a single executive. That may deliver temporary coherence, but it will not constitute progress. In fact, it risks consolidating the very networks that have driven economic ruin.

Libya does need a single budget and a unified executive—but one subject to strict and enforceable guardrails on how public money is spent, disclosed, and audited. External engagement must support this principle. Anything less only subsidizes the continuation of state capture under a new administrative label.

Libya is not doomed to economic failure. But its current trajectory is unsustainable—not solely because the price of the oil barrel dropped, but because the political will to govern with integrity has long since evaporated.

Recovery will require confrontation, not consensus.

And it must begin with reclaiming the institutions that were designed to serve the public, not those who profit from its decline. Tinkering with technical levers like the exchange rate may buy time. But when such adjustments are used to sustain elite corruption rather than correct structural imbalances, they do not stabilize, they provoke.

If this continues, the next phase of Libya’s crisis will not be quiet erosion. It will be public revolt.

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Emadeddin Badi is a nonresident senior fellow with the Middle East Programs at the Atlantic Council where he advises on US and European policies toward North Africa and the Sahel, focusing on Libya’s conflict.

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Libya’s sovereign wealth fund has been under UN sanctions since the revolt against Muammar al-Qadhafi in 2011. These measures restrict investment that would enlarge the fund. The UN has eased them, but further changes would better protect the Libyan people’s patrimony while posing minimal risks.

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What’s new? 

The UN Security Council has granted the Libyan sovereign wealth fund permission to reinvest some of its assets that have been frozen since 2011. But Council members remain reluctant to reform the sanctions constraining Libya’s finances while the country is divided. They also lack confidence in the fund’s competence.

Why does it matter? 

The Security Council imposed an asset freeze on the fund during Libya’s 2011 civil war, with the aim of preventing the Qadhafi regime from plundering the fund, estimated then at over $60 billion. Over a decade after the regime’s ouster, the sanctions still act as a brake on the fund.

What should be done? 

Council members should make further reforms to the sanctions regime to enable the fund to grow, while maintaining safeguards. Since resolution of Libya’s political crisis is not imminent, they should also define a realistic plan for long-term sanctions relief. The fund should do more to enhance its credibility and transparency.

Executive Summary

Libya’s sovereign wealth fund, the Libyan Investment Authority (LIA), has been under UN sanctions since the country’s 2011 civil war. Established in 2006 to invest Libya’s surplus oil revenues abroad, the fund consists of a vast network of subsidiaries worth around $70 billion.

At least half of that amount remains under an asset freeze that has severely restricted the fund’s growth. In 2024, Libyan authorities submitted a first request to the Security Council to enact reforms allowing them to reinvest some of the frozen assets. The Council has long been reluctant to relax its sanctions, given Libya’s tumult and its lack of confidence in the LIA, but in early 2025 it acceded to some of the requests.

These reforms are a good start, but the Council should not wait for resolution of Libya’s political crisis to make additional changes to its sanctions regime. Instead, the Council should develop realistic conditions for broader sanctions relief over the long term, while the LIA should take steps to bolster its credibility. 

The Security Council originally sanctioned Libya’s sovereign wealth fund to prevent the regime of Muammar al-Qadhafi from plundering Libya’s coffers during the civil war that erupted in 2011 when rebels rose up to topple the regime. Although the Qadhafi regime was overthrown months later, the freeze remains in place almost fifteen years on.

After the regime fell, the Council delisted other Libyan institutions such as the Central Bank of Libya and the National Oil Corporation, which had also been sanctioned during the 2011 war, but left the sanctions on the LIA in place. The rationale for maintaining these restrictions was to give post-Qadhafi fund managers time to map out all the fund’s assets.

Yet Libya’s transition quickly descended into chaos, with rival governments intermittently at war from 2014 until today. Council members were accordingly wary of lifting the sanctions.

Over the years, Security Council members have cited various justifications for keeping the sanctions in place. At first, they pointed to the emergence of competing governments, each with its own group of loyalists claiming to be the legitimate managers of the country’s sovereign wealth fund.

While the dispute over the LIA leadership was eventually resolved, allegations of corruption plagued Libya’s other institutions and fighting broke out periodically. Council members worried that if they unfroze the LIA funds, armed groups and other powerbrokers would embezzle the money.

Council members also cited a lack of confidence in the LIA’s ability to manage the fund competently, transparently and independently. In recent years, the fact that neither claimant to government power had an electoral mandate became another reason to maintain the freeze. The Council, like many Libyans, sees the sanctions as a means of protecting the population’s sovereign wealth nest egg from these various ills.

Libyan political elites benefit from the country’s enormous oil wealth, but the Libyan people see little of it.

Today, Libya has again lurched into political and economic turmoil. Two rival governments are still vying for power, and there are no elections in sight. Libyan political elites benefit from the country’s enormous oil wealth, but the Libyan people see little of it.

Foreign officials have sounded alarms about mismanagement in the National Oil Corporation and the Central Bank of Libya, which are foundational to Libya’s economy. These officials also point to institutionalised embezzlement throughout the state. Meanwhile, Libya’s leaders have channelled hardly any oil money into development projects, and the Libyan people face poverty, high unemployment and economic stagnation. 

Yet the sanctions may be making things worse. Libyan officials, while refraining from calling for lifting them wholesale, say these measures have caused financial losses and curbed the sovereign wealth fund’s growth. For years, sanctions meant that billions of dollars of Libyan assets sat in cash, which lost value over time due to inflation.

Outside firms charged hefty fees to administer frozen accounts, on terms that had been negotiated before 2011, while doing little to manage the LIA’s holdings due to restrictions. Citing these and other reasons, the fund asked the Council to consider reforms to allow for reinvestment of some LIA assets while maintaining the freeze. 

In January 2025, the Council made a novel decision to reform the LIA sanctions regime by allowing the investment authority to invest its cash reserves on certain conditions, including the requirement that the reinvested funds and the interest they accrue remain frozen.

The reforms remove important curbs on the fund, but sanctions still block it from growing to its full potential. Council members are nonetheless hesitant to offer broader sanctions relief, given Libya’s dysfunctional politics and the LIA’s flawed management. Yet, counterintuitively, Libya’s long-running crisis only underscores the importance of bolder reforms. Neither political unification nor an election is likely to happen soon, and without action now, the sanctions on the LIA could persist for many more years.

In the meantime, the fund’s growth will be slower than it could be, and the Council will have overseen a decades-long sanctions regime disconnected from its original purpose. To address these challenges, the following reforms should be pursued:

The Security Council should consider reforming additional elements of the LIA sanctions that curb its growth, such as by allowing low-risk reinvestments for non-cash assets, while keeping the assets and accrued interest frozen.

The Security Council and the LIA should consider creating a pilot project where LIA partners and a credible third party such as the UN or the World Bank co-manage a portion of the frozen assets. 

The LIA should take vigorous steps to enhance transparency, accountability and independence, such as by complying more fully with the Santiago Principles on sovereign wealth fund best practices and producing comprehensive reports on its holdings. 

The Security Council should set realistic goalposts for sanctions relief for the LIA, considering that resolution of Libya’s crisis and elections are far off.

The opportunity to improve the long-term prospects of all Libyans should not be missed. Modest reforms pose minimal risks and could better protect Libyan wealth. They would enhance the credibility of Council sanctions on Libya, which if left unaltered would face fair criticism for being discriminatory and anachronistic. The Security Council and the LIA should take corrective action. 

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