In a cleverly coordinated PR stunt, the Director General of the Libya Development and Reconstruction Fund, Belgasem Khalifa Haftar, son of the ageing military strongman in control of eastern, central and most of southern Libya, stressed to a gathering of eastern and central Libyan tribal leaders the need to continue public spending on development and reconstruction. He stressed that spending should be continuous and increasing every year. He said to his sympathetic audience “just give me the money and then hold me accountable’’.
The Hafters’ LD 300 billion spending without independent oversight
The Hafters run their territory devoid of any government oversight or control, operating a separate off the books budget with revenues accrued through several smuggling activities and their Military Investment Agency. However, the Tripoli government pays all state-sector salaries and many development projects in Hafter’s domain.
This off-the-books spending totalling about LD 300 billion is referred to as ”parallel spending” by Central Bank of Libya Governors and the Tripoli government. It is nevertheless accepted by the Tripoli government as part of the Libyan state’s budgetary deficit. Moreover, the Tripoli government blames the eastern regime for the crash in the FX value of Libyan dinar as the east buys up dollars off the black-market FX. Tripoli PM Aldabaiba has now called on the CBL Governor to stop all project spending across Libya. It is this call that Belgasem Hafter is responding to and attempting to rouse his regional constituent against.
The US-brokered unified spending agreement
The US has recently brokered an agreement between the Tripoli government and the eastern-based regime whereby they agreed to a unified budget for development spending to save Libya’s diminishing hard currency reserves, defend the foreign exchange value of the Libyan dinar, reduce imported inflation, price increases and protect purchasing power and standards of living. However, Belgasem Hafter’s pronouncements seem to have jettisoned the US-brokered agreement.
Libya’s crashing dinar and economy
Belgasem Haftar’s call for increased public projects spending comes despite warnings from the Central Bank of Libya and economic experts about the negative impact of uncontrolled public spending on development projects, and others, on the exchange rate, inflation, prices and the deterioration of the economic situation in the country.
In his speech justifying his family’s huge spending, Belgasem Haftar said the road network in Benghazi and its neighbouring cities and in southern Libya is in a great state of improvement, and during the next three years there will be a great change for the region, but he emphasized that “development and reconstruction must have continuous financial support, not financial support in one year, and in the next year the finance will be less, and the support for development must be increasing.”
Accuses government of profligacy, corruption
Hafter accused government of wasteful spending on fictitious projects, claiming that “In one of the years, the government said that it had spent on stationery five billion dinars, equivalent to 4 billion dollars.
LD 10 billion allocated to Derna’s reconstruction still not finished
Meanwhile, we were in the middle of the Storm Daniel disaster in Derna where we were allocated 10 billion dinars by parliament (the House of Representatives – HoR) and worked with them in 2024 and 2025, and so far we have not exhausted the allocation, and we have served the entire city of Derna and all its neighbouring cities that were affected by the hurricane.”
If it were left to the government Derna would not have been reconstructed
Belgasem Hafter said that If any government enters the city of Derna to compensate for what happened in it, I assure you that the rubble will be present in it until now, and no one will bear the responsibility for the reconstruction of what happened in Derna because what the city was exposed to is a disaster by all standards. But within two years we were able to return the city to a better place than it was.
The oil-rich Wahat region is rich with oil underground but with poor infrastructure overground
Turning to Libya’s oil-rich Wahat region, Belgasem Hafter said the region is rich underground (with oil) and poor above ground. He said despite producing two-thirds of Libya’s oil production, the infrastructure of the Wahat cities is dilapidated. There are no schools or hospitals, and that it needs a serious support from the Libyan state, and that he can implement projects that are felt by the citizen.
Veiled threat to cut off oil supplies
As Belgasem Hafter ended his speech, and sending a clear but veiled threat of the Hafter’s intention to the Tripoli government, one of the regional tribal elders and sheikhs responded on cue, saying: “The oil is under our feet. If reconstruction stops, then let the oil stop, let everything stop; we are losers, losers… and reconstruction is a red line.”
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