Tripoli feels like a backwater these days — rather unusually so for a city on which Libya’s struggles over power and wealth have focused for the past 14 years. Now, all the action is elsewhere. Libyan businesspeople and foreign diplomats come back stunned from eastern Libya, describing with wide eyes how brand new roads, bridges, public buildings and housing projects are rising out of the ground at dizzying speed.
Their amazement at this sudden turn of events is all the greater as it comes after more than a decade during which large-scale infrastructure projects had been mostly on hold. But the reconstruction now underway in areas controlled by Libyan strongman Khalifa Haftar’s family is “unprecedented” even when compared with the late Gadhafi era, a Benghazi resident told me over the phone. (When you have written about the repression and corruption of the Haftars’ family-based power structure, as I have, it’s inadvisable to go and see for yourself.)
In Tripoli, by comparison, lethargy prevails. The only construction activity of any note is a motorway being built by an Egyptian consortium that cuts through Tripoli’s southern districts — an attempt by the Tripoli-based prime minister, Abdelhamid Dabeiba, to curry favor with the Egyptian government. Contractors working on other projects in western Libya complain that they’re having trouble getting paid unless they have allies in Dabeiba’s inner circle. And even if they do, business is slow: The government now has little access to funds for development.
This is a paradoxical state of affairs. Libya’s oil money, after all, is channeled through the National Oil Corp. (NOC) and the central bank. Both are headquartered in Tripoli and formally cooperate with Dabeiba’s government, rather than the rival administration led by Usama Hammad, which is based in Benghazi and provides a civilian facade to the rule of the Haftar clan. Officially, the central bank in Tripoli had not disbursed any funds to the Hammad government as of the time of writing. Opacity surrounds the financing of the large-scale projects in areas under the Haftars’ control — projects managed by an entity headed by one of Haftar’s sons, Belgasem, and a body that effectively reports to another, Saddam.
At the heart of the puzzle is a power struggle in Tripoli that has reshaped Libya’s political alliances and helped the Haftar family to unparalleled funds to dispense patronage. The Haftars have proven adept at exploiting that rift, between the seemingly immovable central bank governor, Siddiq Kabir, and Dabeiba — or more precisely, Dabeiba’s nephew Ibrahim, who is widely seen as the real power broker behind the Tripoli government. As a result of that struggle, the hemorrhage of state funds is worsening, Haftar’s sons are consolidating their power — and ultimately, the shaky balance that has maintained the calm in Libya over the past decade might come undone.
If Libyan politics has rarely made international headlines in recent years, this isn’t necessarily a good sign. Whereas the first decade after Gadhafi’s demise in 2011 was marked by turbulence and repeated civil wars, the period since 2022 has been one of deadlock and backroom deals. Politics is no longer a public affair but now plays out in the hidden machinations of a select few.
The basic contours are deceptively simple: two competing governments and military blocs, backed by two foreign powers — Turkey and Russia. Those two states’ military presence has prevented a relapse into civil war since western Libyan forces, supported by Turkey, defeated Khalifa Haftar’s offensive on Tripoli in mid-2020. In the wake of that conflict, U.N. mediation led to the formation of a unity government under Dabeiba in early 2021. But the U.N.’s plan to hold elections later that year failed. Dabeiba’s western Libyan discontents allied with Haftar to form a new government, but Dabeiba prevailed in the bidding contest for the loyalties of armed groups in Tripoli, leaving the rival administration nominally in charge of the Haftar-controlled east and south of the country.
But the formal divides have concealed increasing collusion between Libya’s leading antagonists. In July 2022, Ibrahim Dabeiba and Saddam Haftar struck a deal to appoint Haftar’s candidate, Farhat Bengdara, as head of the NOC. In exchange, Haftar lifted a partial blockade on oil production with which he had sought to pressure Prime Minister Dabeiba to stand down. From then on, oil exports once again washed revenues into the central bank, and thence on to the Tripoli government, which paid salaries across the country. Dabeiba and Kabir cooperated closely, each relying on the other to ensure their political survival.
For a while, it appeared that the stalemate offered a comfortable setup to all key players. Both the Haftars and their nominal adversaries — the core group of militia leaders who had ensured Dabeiba’s survival — captured ever greater sums of money and influence over the distribution of posts. Ibrahim Dabeiba and the commanders allied with him now dealt routinely with Haftar’s sons. The Dabeibas’ western Libyan opponents were marginalized, and clashes in Tripoli — previously common — became extremely rare. The pillage of state funds, which had provoked so many confrontations and sudden reversals, now proceeded in silence. Meanwhile, the two ruling families and their allied militia leaders accumulated ever more wealth and power.
There are competing narratives about what prompted Kabir’s falling-out with the prime minister, which ended this tranquil state of affairs in the summer of 2023. Kabir and his advisers emphasize that the Dabeiba government’s expenditure proved unsustainably high, requiring the central bank to suspend payment authorizations for everything other than salaries in October 2023. A particular point of discord, an adviser to Kabir told me in late 2023, was implausibly high spending in public sector bodies headed by close allies of Ibrahim Dabeiba, such as the administration handling payments for hospital treatment abroad. In public, Kabir voiced particular alarm at a dramatic increase in the bill for fuel imports and the corresponding decline in the proportion of oil export revenues that the NOC transfers to the central bank.
With fuel imports, Kabir pointed the finger at a key source of the Haftar clan’s finances. Libya has limited refining capacity and imports most of its fuel. The NOC buys the fuel at world market prices, but its subsidiaries then sell it to Libyan consumers at some of the lowest prices worldwide: a liter of gasoline costs about three cents at the official exchange rate. The price differential offers huge opportunities for illicit profit. Fuel smuggling to neighboring countries was common even in the Gadhafi era, but since 2011 industrial-scale networks have replaced small-time smugglers.
Haftar’s forces have been leading players in the fuel-smuggling market since they extended their control over much of Libya’s land and sea borders. Leadership became domination after Haftar’s nominee Bengdara took over at the NOC in mid-2022 and subsequently appointed a Saddam loyalist as the head of its subsidiary Brega, which handles fuel sales. Since then, the quantities of imported fuel have continued to grow, as has the scale of smuggling operations in areas under the Haftars’ control. The opaque system under which the NOC barters the fuel it imports for crude oil exports has also attracted accusations of irregularities — “a black box,” one senior financial official called it.
In the months preceding Bengdara’s appointment, tankers had occasionally loaded fuel at Benghazi’s port to smuggle it abroad. But thereafter, such shipments became routine, according to an expert panel that monitors violations of U.N. sanctions on Libya. Trucks load fuel at depots controlled by Haftar’s forces and pass through checkpoints manned by these forces on their way to Sudan and Chad, reaching as far as the Central African Republic. Businesspeople I spoke to who are involved in these networks, and sources close to the operations at Benghazi port, all name Saddam Haftar as the actor ultimately overseeing fuel smuggling. The profits, they allege, are reinvested in military units reporting directly to Saddam, his brother Khaled and other close relatives.
Kabir understandably charged that the growing cost of fuel imports underpinning these activities was unsustainable. From 2021 to 2023, the annual fuel import bill more than doubled, to $8.5 billion — equivalent to a third of the oil revenue transferred to Libya’s central bank that year. But by singling out fuel imports, Kabir also denounced financial arrangements over which he, as central bank governor, had lost control. Since Libya’s government institutions split in two in 2014, Kabir had been the central arbiter of both monetary and fiscal policy in Libya. Now, bartering by Bengdara’s NOC prevented any central bank oversight over fuel imports. More importantly, the reckless expansion of fuel smuggling enabled by these imports had to be seen as part of the tacit arrangements linking Prime Minister Dabeiba and Haftar. Whether Dabeiba liked it or not, they were a part of the price he had to pay to keep the oil flowing. These arrangements were at the heart of Libya’s politics, but they bypassed Kabir and thereby undermined his centrality.
Kabir and his entourage point the finger at the Dabeiba government’s corruption as the reason for the rift.
“Ibrahim’s commitments to Haftar, Saddam, Ghnewa [a powerful Tripoli militia leader] go far beyond what Siddiq [Kabir] agreed on,” a senior financial official close to Kabir told me last December.
But there is another narrative of how Kabir and the Dabeibas fell out, one of political intrigue between power brokers who install and eject senior officeholders to pursue their private ends through Libya’s state institutions. Ibrahim Dabeiba’s power politics, this narrative goes, had begun to directly threaten Kabir months before he rang the alarm bells on expansionary spending. In July 2023, two militia leaders closely allied with Ibrahim had enabled a new appointee to take over at the Administrative Control Authority — a position that offered its holder veto power over public sector appointments and contracts.
“When that happened, Siddiq [Kabir] started worrying about his own post,” a senior financial official said. The previous incumbent, Tripoli militia leaders and senior officials agree, had been beholden to Mohamed Taher Issa, a prominent businessperson with close ties to Kabir. Previously, Issa had staunchly backed Prime Minister Dabeiba in his bid to retain the loyalties of armed groups in Tripoli. But following the change, Issa assembled a coalition aimed at ousting Dabeiba.
In the same month, a former finance minister was arrested on arrival in Tripoli, where he sought to rally the support of parliamentarians for his bid to replace Kabir at the central bank — apparently backed by both Ibrahim Dabeiba and Saddam Haftar. To protect himself against Ibrahim’s scheming, Kabir built his own alliances with eastern factions. He solicited the support of Agila Saleh, the head of Libya’s east-based Parliament, which had previously considered Kabir an impostor whose term as governor had expired long ago. Only weeks after the incident involving the former finance minister, Kabir obtained a decree from the Parliament’s presidency confirming his position as well as that of his east-based deputy Marei Barassi — another key official who owed his appointment to Haftar’s sons. The decree handed Kabir and Barassi the competencies nominally held by the central bank’s board of governors, requiring them to work closely together.
In the autumn, Kabir began blocking first the transactions of Ibrahim’s political clients and then capital and operating expenditure more broadly, saying that the money for 2023 had run out. Eventually, two militia leaders close to Ibrahim threatened Kabir directly, according to two senior officials close to him. “This crossed the line for him,” one of them said. Shortly afterward, in early November, Kabir left for Turkey, where he was involved in a car accident. Rumors quickly swirled that it had been an attempt on his life. Whatever the truth, Kabir stayed in Turkey for over a month, ostensibly for medical treatment. All the while, he blocked payment authorizations for Dabeiba’s administration. Politicians and militia leaders in Tripoli believed that Kabir was trying to bring Dabeiba down. Tensions were building up between two emerging militia alliances in Tripoli, one of them backing Dabeiba, the other now looking to Kabir as Dabeiba’s leading opponent. Kabir’s ally Mohamed Taher Issa was holding meetings to rally support for a change in government. The dinar’s rate against foreign currencies was sliding on the black market.
In the early months of 2024, Dabeiba’s financial travails kept worsening, while the Haftar family and its east-based government suddenly became awash with money. “The Haftars used to negotiate with us over a billion here, a few hundred million there. Now they no longer ask for anything, they have more than they need,” a senior financial official told me this June.
The most important reason for the dinar’s slide was that the Haftar clan was printing money both figuratively and literally, as well as converting that money into hard currency on the black market, boosting the demand for dollars. In public, both Kabir and Dabeiba referred to this as “the parallel expenditure of unknown origin.” Kabir argued that the threat to Libya’s economy from parallel spending made it necessary to negotiate a unified budget between both administrations. In fact, Kabir himself was facilitating the eastern authorities’ financing mechanisms.
In the final months of 2023, rivalry between the two governments obstructed the response to the catastrophic flooding in the city of Darna. In September, the collapse of two dams after torrential rains devastated large parts of the city’s center. More than 4,000 people died; another 8,000 are still considered missing.
Libya’s factions characteristically seized on the disaster as an opportunity to get ahead of their competitors. On paper, Dabeiba decreed 2 billion dinars (then around $400m at the official exchange rate) for the emergency response and reconstruction; the east-based Parliament allocated five times that sum to the parallel government. But Dabeiba’s government had no presence in Darna, while the parallel administration had no regular access to funding from the central bank. Meanwhile, Kabir insisted that reconstruction had to be overseen jointly and with the involvement of the World Bank to ensure transparency. For months, the impasse kept reconstruction on hold, even as more than 40,000 people remained displaced from their homes.
Saddam Haftar had overseen the initial response to the crisis, while his brother Belgasem became head of the eastern government’s Darna reconstruction committee in December 2023. Initially, Belgasem had little to show for it. Two months later, however, the east-based Parliament transformed the committee into a reconstruction and development fund for the whole of Libya, and exempted it from all administrative and financial oversight. Shortly afterward, the sluggish work of clearing damaged or illegally built structures in Darna gave way to frantic construction activity. And it was no longer just Darna. Egyptian and Turkish companies began building roads, bridges and buildings in Benghazi and other cities.
It is unclear where the money for this sudden boom came from. Belgasem Haftar has told journalists that the funding for the projects he oversees comes from the central bank. Western diplomats also believe the central bank in Tripoli has financed the eastern government, though they lack specifics. Several senior financial officials in Tripoli equally claimed that the central bank had made direct transfers, including to Belgasem’s fund. But the central bank itself, which publishes detailed data on the disbursements it authorizes, did not declare any such payments. In August, the Tripoli central bank for the first time acknowledged that the Benghazi central bank had used $950m for construction projects in the east, but it did not say where the dinar equivalent of that amount had come from. A close adviser to Kabir repeatedly denied to me that the central bank had made transfers to Belgasem’s fund or other arms of the eastern government. This could change after the east-based Parliament in July 2024 adopted a unified budget shared between the two parallel governments, as Kabir had proposed. But at the time of writing, Kabir and the Parliament are still at odds over the budget, which apparently does not correspond to Kabir’s expectations.
Three senior financial officials offered an alternative explanation for the bonanza — one that suggested a less direct flow of funds from the central bank, but nevertheless one ultimately overseen by Kabir. In the decree Kabir obtained from the Parliament’s presidency to protect his position, he committed to transferring assets held by commercial banks in the parallel central bank’s accounts in Benghazi to those of the central bank in Tripoli, and allowing the banks to use them. These assets, worth a total of around 51 billion dinars (or around $10bn at the official exchange rate), represented the bulk of the debt previously accumulated by the eastern authorities.
Since 2015, banks headquartered in the east, under pressure from Haftar’s forces, had disbursed money at the behest of the eastern authorities, in exchange for treasury bonds. The eastern central bank then nominally purchased these bonds, and in return credited banks with assets in its accounts. These assets were purely hypothetical, because the eastern central bank had no access to revenue. By the time Haftar launched his offensive on Tripoli, in 2019, this financial wizardry had brought the east-based banks to the brink of bankruptcy, and the eastern central bank ended it. The assets, which banks were unable to draw on, remained an unresolved problem.
Kabir had already begun crediting east-based banks for part of these assets in early 2023, while he was still on good terms with Dabeiba. In June of that year, central bank officials told me that around $3.7 billion had been “transferred.” But after Kabir fell out with Dabeiba and reached out to the east, that operation accelerated, and by the end of the year, it was complete. In addition, the central bank extended billions in long-term, interest-free loans to banks. Board reshuffles brought east-based banks under the Haftars’ de facto control — banks that now had dozens of billions of dinars in assets in the account of the central bank in Tripoli. This meant that the eastern government — and Belgasem Haftar’s fund — could once more take out debt from solvent commercial banks, with the help of the Benghazi central bank. Indeed, the law creating Belgasem’s fund explicitly authorized it to do so. Control over banks also allowed associates of the Haftar sons to officially buy hard currency on credit, then pay back the dinar equivalent after converting the hard currency on the black market, pocketing the differential.
By describing debt-fueled eastern spending as “parallel expenditure of unknown origin,” Kabir ostensibly denied any connection to it. In fact, central bank officials were well aware of how the funds granted to east-based banks were being used, but publicly they maintained silence. “Marei Barassi is operating with a gun to his head. We have to be easy on him,” an adviser to Kabir told me this June, referring to Kabir’s Benghazi-based deputy.
Kabir also adopted a permissive attitude to counterfeit currency, apparently printed under the Haftars’ aegis in eastern Libya. The Benghazi central bank had previously printed its own dinar notes in Russia from 2016 to 2021, and the central bank in Tripoli had grudgingly allowed them to circulate. But in early 2024, large amounts of 50 dinar notes began circulating that the central bank identified as fake, and of a quality inferior to the Russian notes. Central bank and other financial officials said they believed the Haftar family had brought in a printing machine and was producing the notes in eastern Libya. Their estimates of the face value of the counterfeit notes varied widely, from $400 million to $1.4 billion. The central bank notified the attorney general about the notes in February but waited until April to go public. Even after announcing that it would withdraw all 50-dinar notes (worth about $10) from circulation, it gave banks until the end of August to use them. In the meantime, the counterfeit notes have continued to circulate in eastern Libya.
The Haftars now receive hundreds of millions of dinars from the Tripoli government each month even as they maintain their own rival government. Their sway extends to the highest levels of the NOC while they smuggle imported fuel on a large scale. Their control over both commercial banks and the Benghazi central bank has enabled them to wipe out old debts and start spending on credit all over again. Dinars created out of thin air turn into hard currency. The center of gravity in Libya’s state of plunder has moved decisively to the east. And following years of wreaking destruction, Khalifa Haftar and his sons are now cultivating an image as builders.
To the Haftars’ credit, their reconstruction efforts are progressing swiftly and are already yielding visible results. But they also make clear that the Haftar family views those parts of Libya it controls as its private domain.
In addition to Belgasem’s fund, another body has recently started major construction work in Sirte and other cities: the National Agency for Development. This is a new name for an entity set up by Saddam Haftar, the Tareq ben Ziyad Agency for Services and Production. The head of both agencies, Jibril al-Badri, reportedly oversees fuel smuggling from Benghazi, according to an associate of his. The Tareq ben Ziyad Agency served to channel profits from embezzlement and predation to Saddam’s military units. It also forced residents of Benghazi’s destroyed city center to sign over their properties with little or no compensation and subsequently cleared the area. Now, the National Agency is developing the prime real estate Saddam Haftar appropriated in Benghazi.
“Jibril al-Badri has closed off the seafront. People can’t access it, and they don’t even know what is being done there,” a Benghazi resident told me in June.
In Sirte, the National Agency’s projects are managed by Mahmoud al-Firjani, who has also run two TV channels supporting Haftar with propaganda. Municipal officials say they haven’t even been told — let alone consulted — about the agency’s plans.
“Egyptian companies have shown up and started working without anyone knowing what they are building,” one said.
“Some projects are Saddam’s, some are Belgasem’s, others are Khaled’s [another son] — all projects are divided between them,” a Benghazi contact with close ties to Haftar’s inner circle told me. An entrepreneur from western Libya who does business in the east confirmed this: “Turkish and Egyptian companies have to subcontract to either of two companies — one belonging to Saddam, the other to Belgasem. All Libyan companies working in construction have to contract with these two companies.”
Businesspeople and militia leaders from western Libya have flocked to the east and courted Haftar’s sons. So have Western diplomats. Before the reconstruction bonanza, there had been no public meetings between Western representatives and Haftar’s sons. Diplomats had met with Haftar himself for years but steered clear of the parallel eastern government, and were reluctant to be associated with the Haftar family’s blatant nepotism. From April onward, however, meetings with Belgasem, Saddam and Khaled Haftar became part of the routine schedule of Western diplomats visiting the east. The French ambassador also led a delegation of businesspeople to meet with Belgasem, and others are likely to follow suit. “Internationals are now completely resigned to normalizing relations with a mafia state,” one frustrated diplomat in Tripoli said.
In their public communication on Libya, Western governments had long emphasized the need for a transparent management of public funds. But they have yet to raise the questions of where the reconstruction funds are coming from and how they are being used. When I suggested to a European ambassador that meetings bestowed legitimacy on the Haftar sons’ apparent ambitions to consolidate their family’s rule, he defensively argued that he had merely met Belgasem in his official capacity, not as Haftar’s son.
There are significant differences between Libya’s competing power structures — between Haftar’s brutal despotism and Dabeiba’s shrewd juggling of competing factions. When it comes to the pillage of state resources, the Haftars’ operations stand out for their far greater scale and brazenness. But there are also striking parallels.
One is nepotism. It is no coincidence that the eminence grise in Tripoli is Ibrahim Dabeiba. The Dabeiba family owes its influence to the rise of Ibrahim’s father, Ali, under Gadhafi. Ali Dabeiba — the prime minister’s cousin and brother-in-law — became spectacularly rich as a civil servant, at the head of a state agency in charge of infrastructure projects. He, his sons and relatives came to own an empire of offshore accounts, companies and real estate abroad.
Today, Ibrahim is the family’s key political player, and he has spoken derisively to foreign diplomats about Abdelhamid Dabeiba’s political acumen. But other relatives and in-laws also hold official positions and wield influence. Entrepreneurs in Tripoli complain that doing business with state institutions requires backing from Ibrahim Dabeiba, other members of the prime minister’s inner circle, or one of the handful of militia leaders that prop up the Dabeiba power structure.
The brazen looting of state wealth by a select few requires repression, though this takes very different forms in east and west. In Tripoli, security services controlled by militia leaders harass and arrest journalists, civil society activists, and even ordinary people who vent their anger on social media. In areas controlled by Haftar, speaking out can get you not only arrested but also tortured and killed. Society has been cowed into silence. “It feels like Libya in the darkest days of the 80s and 90s,” a western Libyan entrepreneur who does business in the east told me.
Can the two systems coexist indefinitely? The rift between Siddiq Kabir and the Dabeibas has fuelled tensions among rival coalitions of militias in western Libya — including competing groups deployed at the Tripoli central bank. In mid-August, Kabir and the U.S. embassy denounced an attempt to take over the central bank by force, pointing to threats made by militias aligned with Dabeiba that had prompted a countermobilization by opposing forces.
More importantly, the arrangements bridging east and west appear to be nearing a breaking point. The voracity of the leading protagonists shows no signs of abating. The NOC recently accorded a share of production in several oil fields to a newly formed Libyan company of unknown ownership but rumored to function as a front for Saddam, which has already begun selling its own oil. Moreover, senior financial officials allege that a multibillion-dollar gap has accumulated over the past two years between the value of the crude oil lifted from Libyan ports and the transfers of revenue into the NOC’s account at Libyan Foreign Bank, a central bank subsidiary. Ever bolder schemes may come light — but every new scheme could be a step too far and unravel the tenuous relations among the Dabeibas, the Haftars and Kabir.
In the meantime, the Haftars’ greatly improved access to funds threatens to destabilize the balance of power. Saddam has told close associates that he is seeking to turn western Libyan factions against each other and buy the support of selected militia leaders — a task made easier by the money he now has at his disposal. His father has informed Western diplomats that he intends to make another attempt to seize Tripoli. The Haftars’ continuous acquisitions of military hardware leave little doubt that he means it. Recently, the Italian authorities intercepted a shipment of Chinese combat drones on their way to Benghazi — part of a transaction that allegedly involved crude oil sales.
For the time being, Turkey’s military presence in western Libya poses a formidable obstacle to such ambitions. So does the self-interest of militia leaders, regardless of whether they thrive or languish under the Dabeibas — all know that a Haftar takeover would immediately make them dispensable. But with the sudden accession to wealth and power, as well as the courtship by foreign emissaries, may come illusions of omnipotence that carry the risk of disastrous miscalculation.
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