The Tripoli based Libyan Ministry of Economy and Trade announced yesterday that its Minister, Suhail Abu Shiha, issued Decree No. (555) of 2026, which regulates the importation of goods and commodities using foreign currency from the parallel market.
The decree permits such imports on a temporary basis—subject to established legal regulations and procedures—until 31 March 2027.
Justifying the U-turn, the Ministry said this decision is intended to regulate import operations and oversee trade financing mechanisms.
It said certain essential goods and medicines are excluded from this authorization; any exceptions regarding these items will require prior approval from the competent authorities.
Analysis: Why another U-turn?
It will be recalled that this is not the first time that the Tripoli government has attempted to restrict imports through bank payments. However, as was the case with the predecessor (Mohamed Hwej) of the current Minister of Economy and Trade (Suhail Abu Shiha), the government was forced to back pedal.
Analysts put this to four main factors.
LCs dominated by a few fat cats
First, the CBL hard currency documentary letters of credit system are unjust and unequal. It is dominated by a few so-called ‘‘fat cats’’ who obtain the lion’s share of hard currency LCs. These are the who’s who of Libyan business and industry. They are well known to the Libyan public as the CBL routinely publishes lists of companies that obtain LCs and the amounts granted. These lists are the target of regular full-blown social media rebuke.
Fat cats colluding with bank officials?
These fat cats are perceived to be in collusion with bank officials, including CBL bank officials, who insure they obtain regular hard currency LCs to keep their multi-million-dinar businesses operating smoothly with the needed supplies.
This means that most SMEs fail to obtain LCs and are forced to seek funding for their imports through the parallel market.
Added to this is an element of laziness and convenience. Banks prefer to process a few hundred large applicants for hard currency LCs rather than a few thousand foe smaller amounts. They can also extract more favours out of fat cats and SMEs.
Small businesses do not use bank transfers
Secondly, many SMEs are just that. They are very small and deal in the goods that the fat cats are not interested in. These include traders in fresh fruit or vegetables and other goods that cross the borders of neighbouring states. Many of these traders are sole traders dealing in cash and often they don’t even have bank accounts.
CBL needs more time?
On the other hand, there is an operational justification, namely that the CBL is unable to deal with the new policy and needs more time to create and implement payment systems for the larger volume of SME companies.
Tripoli has no control of Hafter-controlled ports
Fourthly, the failure by the Tripoli government to implement this policy reflects Libya’s political split. It reflects the fact that the Tripoli government does not control ports under the control of the Hafter regime. This fact means that the policy is ineffective and, moreover, favours companies based in the Hafter-controlled areas – and disadvantages those based in the Tripoli government-controlled zones.
Tripoli government keeps trying the same failed policies
Ironically, the factors that have led to the U-turn have existed for years if not decades. Yet, the Tripoli government insists on trying the same failed policy again and again – without changing the fundaments that lead to its failure.