Sarraj-Elkaber controversy reveals hidden budget for financing militias in Libya

Menna Abdel Razek

Amid severe crises facing Libya, including the war that has left scores of people dead and the danger of the corona virus pandemic, a new crisis has erupted, exacerbating the situation, due to differences between the country’s pillaging partners, Tripoli-based Government of National Accord (GNA) head Fayez al-Sarraj and Central Bank of Libya Governor Saddek Elkaber, over foreign exchange and budgets of the eastern region.

Last March, Sarraj asked Elkaber to open the system of foreign exchange sales, with supervision by the Presidential Council, which is led by Sarraj, to determine foreign exchange sale fees and other financial arrangements and policies in 2020. The matter was strongly rejected by Elkaber, as several requests were made to confront the corona virus, including liquidating salaries, opening a system of documentary credits for the supply of food and medical goods, preparing financial arrangements for the year, carrying out exchange orders, and requesting coverage of emergency allocations to counter the pandemic. The bank has stated that citizens’ salaries for January and February were accessible.

Sarraj then requested the unification of the central bank and in early April called for bankers to unite in Tripoli in the west and Al-Bayda in the east. He also called for a general meeting to set monetary, credit and banking policies to serve the public interest of the country, requesting the UN mission in Libya provide technical assistance.

Sarraj attacked Elkaber, saying that unilateralism must be ended by unilateral decision and control over monetary policy, and he criticized the latter’s financial and economic policies and the delay in transferring monthly permits to citizens, which has caused them great harm.

Elkaber responded in a statement that the bank had adopted an initiative to unify the Libyan bank and the parallel bank since 2015 after conducting comprehensive audits of both banks, adding that he had provided the necessary support to the Ministry of Health to confront the corona pandemic and implement all financial claims. He said that temporarily stopping the sale of foreign exchange was a precautionary measure and in accordance with the extreme state of necessity due to stopping oil production and export, in light of demand for foreign exchange being exaggerated for profit and speculation by some.

Elkaber accused Sarraj’s government of laxity in the production and export of oil, which is the country’s only source of income and the main cause of its financial and economic crisis.

Brotherhood

Because of the Brotherhood’s infiltration into the central bank led by Elkaber, they are trying to pull the rug out from under the Sarraj government. Last March, Major General Ahmed al-Mesmari, spokesman for the Libyan National Army (LNA), said that the Brotherhood had taken control of the Libyan bank and spent 2 billion pounds on its militias in just one day.

Ibrahim al-Jarari, head of the Libyan-Egyptian Chamber of Commerce, said that budgets are the main reason for the differences between Sarraj and Elkaber because of the latter’s control of the Libyan central bank’s budget, since both of them have militias protecting them, consequently forcing them to spend the budgets on these militias. Other differences regarded hard currency conversion, as well as Elkaber’s control over the exchange of budgets of the eastern region after it was approved by the House of Representatives in Tobruk.