Libya’s economic instability is often discussed through exchange rates, foreign-currency supply and Central Bank interventions. Yet recent developments reveal a deeper problem: the state is struggling not only to manage its financial resources, but also to coordinate the institutions responsible for managing them.
The question is no longer simply how much money enters the economy. It is whether public institutions can produce consistent information, make coordinated decisions and ensure that financial resources reach their intended destinations.
Three recent developments illustrate this institutional challenge.
Oil revenues: When financial information becomes fragmented
In October 2026, conflicting public statements about oil-revenue transfers exposed weaknesses in financial reporting and institutional coordination. On 13 October, the National Oil Corporation (NOC) reported approximately US$1.232 billion transferred to the designated sovereign account at the Libyan Foreign Bank. By 14 October, its reported cumulative transfers had reached approximately US$1.448 billion. The NOC explained that the mechanism included deductions for fuel-import costs, with the remaining balance transferred to the Central Bank. The Central Bank, however, reported receiving US$361 million by 14 October, US$577 million by 15 October and US$934 million by 18 October.
These figures refer to different stages of the financial process and should not be treated as directly interchangeable. The Audit Bureau subsequently reported that approximately US$864.57 million had been allocated to fuel imports, while approximately US$577.41 million had been transferred to the Central Bank by 15 October. The Audit Bureau established a joint committee involving the CBL, NOC, Ministry of Finance and Libyan Foreign Bank to reconcile the figures and standardise reporting. The issue is not necessarily missing funds. It is the absence of a sufficiently integrated and publicly traceable reporting framework. When institutions report different stages of the same financial flow without a unified reconciliation mechanism, public confidence becomes vulnerable and economic decision-making becomes more difficult.
Institutional instability: Who is responsible for economic continuity?
The leadership transition at the Central Bank has added another dimension to the governance challenge.
Following Governor Naji Issa’s resignation request in August, the Presidency of the House of Representatives provisionally accepted his resignation on 22 October and assigned Fawzi Abu Khazam to perform the governor’s duties. On 25 October, the Central Bank’s Board confirmed the transfer of responsibilities, effective 22 October.
On 2 November, the House of Representatives voted to accept Issa’s resignation and appoint Abu Khazam as governor, with 78 votes in favour out of 90 members present.
Today, Naji Issa participated in an official handover ceremony with his successor Abu Khazam.
This transition raises important questions about institutional continuity, legal coordination and the independence of monetary institutions in a politically divided state.
The Central Bank is not simply another administrative department. Its credibility, governance and operational independence are fundamental to monetary stability and confidence in the financial system.
Leadership changes must therefore follow clear legal procedures and institutional consensus rather than become another source of political and administrative uncertainty.
Salary delays and administrative inconsistency: The cost to citizens
The difficulties are equally visible in public-sector salary administration. In September and October 2026, teachers across Libya protested and suspended educational activities over salary-related grievances, unpaid financial entitlements, working conditions and outstanding allowances. On 6 October, the Government of National Unity announced the adoption of a unified salary scale, including a reported 10% increase compared with the previous scale.
However, on 1 November, parliamentary and government financial committees were still reviewing technical and financial observations on the proposal. On 2 November, the Ministry of Finance published a draft unified salary-system law and proposed salary scales for further consideration.
This sequence illustrates a wider administrative problem: announcements, proposed reforms and actual implementation are not necessarily the same thing.
For citizens, institutional coordination is measured by whether salaries arrive on time, entitlements are honoured and public services operate consistently. A digital salary-payment system is valuable, but digitalisation cannot compensate for incomplete employee records, fragmented administrative responsibilities or unresolved financial obligations.
From financial intervention to financial intelligence
These developments demonstrate why economic reform cannot depend exclusively on exchange-rate adjustments or monetary intervention. Libya needs an integrated financial governance framework capable of connecting information across:
- The Central Bank and commercial banks.
- The National Oil Corporation and Libyan Foreign Bank.
- The Ministry of Finance and public payroll systems.
- Customs and public procurement authorities.
- Audit and regulatory institutions.
The objective should be to establish a consistent picture of public financial flows: where revenue originates, where it is transferred, what deductions are made, who receives public payments and whether expenditure achieves its intended purpose. This requires more than collecting data. It requires the institutional capacity to reconcile information, identify irregularities, assess risks and translate evidence into coordinated decisions.
What needs to change?
Libya’s immediate priorities should include:
1. Strengthening institutional independence and clarifying legal responsibilities.
2. Establishing unified financial reporting and reconciliation mechanisms.
3. Integrating payroll, banking, customs and public expenditure information.
4. Improving transparency in oil-revenue transfers and fuel-import settlements.
5. Linking public expenditure to measurable outcomes and accountability.
6. Ensuring continuity in public services through predictable financial and administrative procedures.
From intervention to institutional transformation
Libya’s economic problem is not simply a foreign-currency shortage. It is a governance challenge involving fragmented information, inconsistent decisions and insufficient coordination between institutions. Financial intelligence can help bridge these gaps by transforming disconnected financial records into actionable institutional knowledge. But technology alone cannot deliver this transformation. It requires institutional commitment, legal clarity, reliable information and accountability.
The real challenge is not simply to manage financial resources. It is to build a state capable of understanding, coordinating and governing them. And the question Libya must confront is:
How can a state achieve economic stability when its institutions cannot consistently coordinate the information, responsibilities and decisions on which that stability depends?
Dr Najat Altorjman is a Corporate Governance Researcher, founder of Financial Integrity and Public Spending Logic (FISL) and Banking Governance & Financial Integrity in Libya, of the Sunderland Business School at the University of Sunderland.
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