Following the tendering of his resignation letter on 10 August, the Central Bank of Libya (CBL) reported yesterday that its Governor, Naji Issa, met yesterday, with the Head of the High State Council (HSC), Mohamed Takala at the HSC’s headquarters in Tripoli.
Rejection of the Governor’s resignation
At the start of the meeting, the CBL reported, HSC members affirmed their rejection of the Governor’s resignation and insisted that he continue his duties. For his part, the Governor reviewed key financial and monetary indicators and challenges—including the management of public resources, expenditure, liquidity, and exchange rates—and discussed their impact on economic stability and citizens' living conditions.
Emphasis, the report continued, was placed on the necessity of ensuring the CBL’s continued, uninterrupted operation and safeguarding its professional and institutional independence, free from the political wrangling and interference that could compromise the stability of monetary policy.
The meeting also stressed the need for harmony between fiscal and economic policies, the rationalization of public spending, the elimination of avenues for waste and corruption, the protection of public funds and state resources, and the enhancement of transparency and accountability across the board.
Establishing a joint committee to formulate economic and financial reforms
In this context, the report revealed, the attendees underscored the importance of establishing a joint technical committee comprising members of the HSC and the House of Representatives—in coordination with the Central Bank of Libya and relevant entities. This committee would be tasked with formulating a comprehensive package of economic and financial reforms and overseeing their implementation, ensuring that existing imbalances are addressed on a sound scientific and institutional basis.
Overcoming the economic crisis requires responsible and courageous decisions
The participants affirmed that overcoming the economic crisis requires responsible and courageous decisions, support for the competent professionals and institutions driving reform, and the prioritization of the national interest over factional interests. Such measures are essential to preserve Libya’s assets, bolster its stability, and strengthen confidence in the country at both local and international levels.
The meeting also included First HSC Deputy Naji Mukhtar and Second Deputy Omar Boushah, the HSC’s Rapporteur, Belgasem Dabraz, and the heads of the HSC’s Standing Committees.
Comment: Governor is now less likely to resign?
Most observers now believe that it is less likely that the Governor will resign his post.
Some believe the tendering of the CBL Governor’s resignation letter was simply a calculated power play hoping to get the conflicting Libyan sides to accept economic and financial reforms, cut public spending and defend the falling black-market value of the Libyan dinar.
The move may have also been a signal to the international community to pressure the conflicting parties into accepting spending costs.
Some analysts even suspect that the resignation play may have even been implemented in collusion with one or more of the domestic and international power stakeholders.
It is still unclear, however, if the conflicting Libyan sides will indeed reduce spending in the long term or whether they will simply pay lip service to the concept in the short term to get past the potential political crisis that could be precipitated by the Governor’s resignation.
The Unified Spending Agreement
It will be recalled that the US had last April mediated a so-called Unified Spending Agreement between west and east Libya. This agreement was supposed to force both sides into limiting their public spending to within Libya’s earnings.
The fact that the CBL Governor felt he had to tender his resignation is proof that either or both sides have not kept to this agreement.
It must be recalled that the position of the CBL Governor is a very polarising issue with both west and eastern Libya determined to get their man’s hands on Libya’s rentier money. It is a very divisive issue that was only resolved last time round by UN mediation. It’s a can of worms Libya can frankly do without opening again.
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