Libya has unified two rival central banks which have been competing against each other for nearly a decade, into a single entity, according to a statement from the Central Bank of Libya (CBL) in Tripoli on 20 August.

The announcement followed a meeting between CBL governor, Saddek Omar El Kaber and deputy governor Maree Muftah Raheel, along with CBL representatives from both Tripoli and Benghazi.

“Both the governor and his deputy have announced that CBL has returned as a unified sovereign institution, and have reaffirmed that they will both continue to make efforts to address the issues that had arose from the division,” according to the statement.

The United Nations Support Mission in Libya welcomed the re-unification of the CBL, adding that it hoped it would create momentum to unify all of Libya’s political, security and military institutions. Similarly, the US Embassy Libya said on social media platform X (formerly Twitter), that the CBL reunification was a critical step to Libya’s economic stability and development.

Since 2014, Libyan institutions (including the central bank) split into two rival factions along political lines. The divergence consists of the UN-recognised government in Tripoli and the Eastern administration based in Tobruk, allied with military strongman Khalifa Haftar. Haftar’s supporters include Egypt, Russia and the United Arab Emirates.

The continued split of the central bank increased risks to Libya’s financial stability, according to a report by the International Monetary Fund (IMF), in June. The IMF has called for banking reforms which include developing a macroprudential framework as well as strengthening the CBL’s governance procedures.

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Libya’s appeal as a destination for foreign direct investment (FDI) has been almost non-existent since the country’s 2011 conflict and subsequent civil war.

The North African nation failed to attract any FDI projects from 2015 to 2017. Since 2019, it has only managed to attract nine projects, according to GlobalData figures.