Tim Eaton
The Government of National Unity (GNU) became the first unified government since 2014 when it was appointed in March 2021. Its mandate was almost exclusively focused on taking Libya to elections planned for December that year. In this context, the GNU had no clear mandate to engage on any expansive set of economic objectives, beyond the existing day-to-day priorities pursued by the EWG, such as achieving improvements in the electricity grid.
While the EWG and LEEC continued their work, the GNU did not prioritize implementing their recommendations, viewing economic decision-making as its responsibility.
Moreover, the limited number of LEEC members who subsequently joined the GNU did not appear to act as advocates for the LEEC’s reforms once in government. Thus, Salamé and Williams’ goals of addressing economic drivers of conflict did not materialize.
Libya’s political process stagnated following the failure to hold elections in December 2021. In February 2022, the split between parallel governments – the GNU in the west, and the Government of National Stability (GNS) in the east – re-emerged. To address the executive division, UNSMIL, with the EWG’s support, pursued three main objectives: ensuring transparent and equitable management of state revenue; safeguarding the NOC’s operations; and advancing the reunification of the CBL.
Overall, these moves indicated a reversion to the pre-2017 agenda of improving day-to-day governance rather than seeking to reform the Libyan state per se. Importantly, the approach was also based on dialogue rather than active mediation, so any progress depended on the willingness of incumbent Libyan policymakers.
A US-developed proposal, the Mechanism for Transparency and Accountability in Public Finance (known as ‘Mustafeed’), was tabled at the EWG in the spring of 2022. This was a departure from previous efforts in that it sought to impose conditions on Libyan authorities.
Specifically, Mustafeed sought to limit state expenditures to essential categories. This was aimed at making it harder for officials associated with vested interests to cling to office, and at incentivizing a move towards elections. Unsurprisingly, the proposal faced stiff resistance from Libyan policymakers, who claimed it was an infringement of Libyan sovereignty. In the face of this resistance, and potential implementation challenges, Mustafeed did not materialize.
A key feature of the political process to date has been the idea that efforts should be ‘Libyan-led’. A genuinely Libyan-led effort on the economic track emerged in the summer of 2023, amid tensions between the rival western and eastern governments over control of state revenues. The Tripoli-based Presidency Council founded the so-called High Financial Committee, designed to mediate in economic disputes between rival powerbrokers.
The committee met several times, but eastern-based officials withdrew from it after a political deal was reached between the CBL’s governor, Sadiq al-Kabir, and the speaker of the House of Representatives (HoR), Agila Saleh, over a nominal ‘reunification’ of the CBL in which the bank’s eastern governor, Marei al-Barassi, became deputy governor.
With the collapse of the High Financial Committee, negotiations on the economic file withered. Real discussions between rival powerbrokers moved behind closed doors and focused on the tacit agreement in the oil sector to divide access to oil revenues between west and east. Subsequently, the HoR formed a technical committee in December 2023 to prepare a draft unified budget, although this budget was ultimately disregarded.
Libya has thus continued to operate without any formal agreement on state spending between west and east, allowing for the uncontrolled increases in expenditure detailed in this paper.
In June 2024, the US re-initiated its own economic dialogue to foster consensus between Libya’s divided state institutions. However, by August 2024 escalating disputes over resource allocation had triggered a leadership crisis within the CBL. Negotiations facilitated by UNSMIL resulted in the appointment of a new CBL governor and the re-establishment of a board of directors in October 2024, after a decade-long absence.
In December 2024, UNSMIL announced the launch of an UNSMIL-facilitated but Libyan-led and -owned ‘multi-track’ political process. The centrepiece of this initiative was the formation of an Advisory Committee of independent Libyan experts who would put forward options for UNSMIL to consider so that the political impasse could be broken.
As part of the process, UNSMIL would formulate an inclusive, structured dialogue among Libyan social constituencies to reach consensus on a collective vision for the country’s future and to address long-term conflict drivers. Notably, the dialogue aimed to build on existing work involving Libyan partners, with the economic consultations focusing on fundamental issues that could ensure a ‘stable, sustainable and prosperous economy’ for the benefit of the Libyan people.
Yet, the necessary parameters to define how the structured dialogue would interact with other lines of effort were never fully finalized and agreed.
In the summer of 2025, the Berlin process resumed, with Germany helping the UN to bring international players together in an attempt to forge consensus behind the UN’s developing plans. These plans were announced at the UN Security Council by the current head of UNSMIL and special representative of the secretary-general, Hannah Tetteh.
Building on the Advisory Committee’s recommendations – delivered in June 2025 – Tetteh’s proposals focused on navigating the political roadblocks to the holding of national elections, seeking the promulgation of an elections law that would have broad acceptance, and facilitating the establishment of an interim government ahead of polls being organized.
Yet, the connection of this process to the previously announced structured dialogue on economic reform remains unclear. As of November 2025, when this paper was being finalized, efforts to reconvene the EWG – which had not met in the previous three years – remained in progress. There is, however, no clear consensus over what the function of a reinstated EWG should be, or how it might interact with the structured dialogue that has already been initiated.
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Tim Eaton is a senior research fellow in the Middle East and North Africa Programme at Chatham House. His research focuses on the political economy of conflict in the Middle East and North Africa (MENA) region, and on the political economy of the Libyan conflict in particular.
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