It’s All About Oil Revenues: Kabir-Sarraj Conflict Over LFB Resurfaces

The dispute between the outgoing governor of the Central Bank of Libya (CBL), Siddik al-Kabir, and the President of the Presidential Council, Fayez al-Sarraj, has re-erupted again. 

(Libya, 18 November 2020) – Fayez al-Sarraj announced through his media office on Monday the approval of the minutes of the exceptional cabinet meeting, which adopted several measures and decision. He decided to exercise his powers on the Libyan Foreign Bank (LFB) as per its founding law No. 18/72, which is still in effect despite the issuance of Law No. 1/2005, as amended, on Libyan banks.


Sarraj’s statement indicated that “in line with Law No. 16/1991 on assigning some prerogatives to the Council of Ministers, the Council decided to form a general assembly to name the board of directors of the LFB as per its statute and founding law.”

Since the announcement of an imminent agreement to reopen oil production and export (on 18 September between the Presidential Council’s member Ahmed Maitiq and the General Command of the Libyan National Army), Siddiq al-Kabir, who resides in Turkey and is supported by the Muslim Brotherhood entrenched with him in the CBL, is trying to seize the LFB by removing its previous administration and replacing it with another one loyal to him to circumvent the agreement.


A recent article in Africa Intelligence had revealed that Siddik al-Kabir was hoping the formation of the new temporary management committee of the Libyan Foreign Libyan Foreign Bank (LFB) on 21 October would help him “tighten his grip on this institution that plays an extremely strategic role in the state’s finances.” 

The article also mentioned that Kabir replaced interim chairman Mohamed Najib Al Jamal with one of his loyal men, Khaled Al-Gonsel. Also, “the committee vice-chair Haji Nejmeddine Kaabar is another of Al Kabir’s protégés”, who Kabir had previously tried to have him appointed as managing director of the LFB.

Additionally, according to the report, the new managing director, Akram Grew Akram Grew, “is also in Al Kabir’s good books”. Akram Grew was particularly valuable for Kabir and was made part of the “bank’s committee that revised letters of credit award mechanisms.” As the report explained,  this was “a highly-sensitive task: letters of credit, most of which are given out by the LFB, are needed for imports but also helped some amass huge fortunes by playing off the official exchange rate with that of the black market.”

The awarding of letters of credit and the fact that revenue earned by the National Oil Corporation (NOC) is collected the LFB and then paid into the CBL. The Maitiq-Haftar deal on the resumption of oil guaranteed from the GNA side that the revenues would not be abused by Kabir’s CBL, who has been sacked twice by the elected Parliament of Libya. The opening of the escrow account was a key demand of the LNA and the eastern authorities and the insistence the revenue we equally share between the three regions of Libya (Cyrenaica, Tripolitania, Fezzan).

Kabir’s moves behind the scenes, therefore, once again undermine the creation of financial processes that can stop the abuse of oil revenues my militias and other stakeholders aligned to Tripoli. As the Africa Intelligence report explained: “In the meantime, Al Kabir has no intentions of letting go of the LFB nor his role as governor of the CBL, even though his official mandate ended in 2014. He has the support of Interior Minister Fathi Bashagha, a Misrati, who himself dreams of taking over from Sarraj.”


Following the measures adopted by Fayez al-Sarraj at the cabinet meeting on Monday on naming the board of directors of the Libyan Foreign Bank (LFB), Siddiq al-Kabir’s sends the following letter of objection. The letter translated here by Al-Marsad in full:

Mr. President of the Presidential Council of the Government of National Accord

After compliments;

We refer to the statement issued by the Media Office of the President of the Presidential Council of the Government of National Accord (GNA) on 16 November 2021, which referred to the cabinet’s decision to form a general assembly to name a board of directors for the Libyan Foreign Bank (LFB). In this regard, we confirm the following:

First: The designate Minister of Economy exceeded his powers and issued a commercial registry certificate to Mohammed bin Youssef, the former General Manager of the LFB, who wasted more than a billion dollars of its funds. The Public Prosecution opened investigations with him regarding the violations he committed since August 2016. It issued three arrest warrants against him. Such actions is an abuse of the authority of his position, which clearly obstructed the LFB’s work, by reinstating the said person to issue swift letters and administrative correspondence before he was arrested. This has exposed the bank to several local and external risks.

Second: The Commercial Registry Office subordinate to the designate Minister of Economy delayed the issuance of a commercial registry certificate for the Interim Administration Committee in charge under the Governor’s Resolution (No. 103/2020). This will impede the work of the LFB, negatively affect the banking sector in its foreign dealings, and confuse its relations with the network of correspondents. This has forced the designate administration to redouble efforts to curb the repercussions of these illegal practices.

Third: The above mentioned decision of the Council of Ministers to form a general assembly for the LFB, if issued, would violate all laws and regulations in force, including Articles (68), (72), (100), and (120) of Law No. 1/2005 on banks, as amended, and Article (258) of the Commercial Law No. 23/2010, all of which revoked the provisions of Law No. 18/1972 on the Council of Ministers’ jurisdiction to appoint the board of directors of the LFB. These legal provisions prove without a doubt that the CBL, in its capacity as the sole owner of the LFB and the holder of its shares, is its General Assembly (attached is a detailed note on the legal position and the negative effects of the aforementioned decision).

In conclusion, and noting the above, the CBL holds you legally and historically responsible for the damage that will befall the LFB and its contributions if such a decision is issued by the Council of Ministers in accordance with the statement issued by the Media Office of the President of the Presidential Council. The CBL also warns against the effects of the issuance of such a decision on the existing international criminal investigations on the systematic work that damaged the LFB by the previous administration that caused serious damage to public funds. The CBL notes the negative role played by the designate Minister of Finance and Economy to undermine the independence of the LFB in violation of the law and the legal opinion of the Legal Department while he issued a commercial registry for the former manager who was later arrested on orders of the Attorney General’s office.

Peace, mercy, and blessings of Allah be upon you

© Al-Marsad English (2020)