UN says Libya near economic collapse due to central bank crisis

Disputes over control of Libya's Central Bank have raised alarms about possible misuse of the country's finances

Libyan Ministry of Interior personnel stand guard in front of the Central Bank of Libya in Tripoli, Libya. Reuters

The UN mission in Libya expressed deep concern about the deteriorating situation there, saying on Monday that Libya could be on the brink of economic collapse because of a central bank crisis.

“The mission believes that continuing with unilateral actions will come at a high cost for the Libyan people to resolve the protracted crisis, and risks precipitating the country's financial and economic collapse,” a mission statement read.

Disputes over control of Libya's Central Bank have raised alarm about possible misuse of the country's financial resources.

Libya's economy is heavily reliant on oil revenue, and there have been moves to impose force majeure on oilfields, effectively cutting off the country's primary source of income.

The statement added that the UN mission is convening an emergency meeting for all parties involved in the Central Bank of Libya crisis with hopes of reaching a “consensus based on political agreements, applicable laws and the principle of the central bank's independence".

The UN mission called for the suspension of all unilateral decisions related to the central bank, the lifting of force majeure on oilfields, an end to use of force to achieve political objectives or factional interests, and protection for the bank's employees.

It stressed that resolving the “emerging” crisis is an “urgent necessity” to create a conducive environment for an inclusive political process.

Earlier on Monday, Libya's eastern-based administration said it was shutting down oilfields it controls and suspending production amid rising tension with the UN-recognised government in Tripoli.

A statement the Benghazi administration posted on X said it was “suspending all oil production and exports until further notice”, citing “force majeure”.

It linked the move to “repeated attacks on the leaders, employees and administrations of the Central Bank” in Tripoli, which manages Libya's large oil resources and the state budget.

The eastern-based administration said “outlaw groups” were responsible in a bid to control “Libya's most important financial institution”, the statement said.

Libya continues to grapple with the effects of the 2011 Nato-backed uprising that removed long-time leader Muammar Qaddafi.

The country remains split between the UN-recognised government in Tripoli, led by Prime Minister Abdul Hamid Dbeibah, and a rival administration in the east, supported by military commander Field Marshal Khalifa Haftar. Most of Libya's oilfields fall under his control.