This is an article from our weekly Libya Politics & Security publication.

Libya’s financial institutions continue to face upheaval that stunts the country’s economic growth. Infighting between individuals competing for the chairmanship of the Libyan Investment Authority (LIA) sovereign wealth fund has, for example, resulted in dismal revenues for the fund in 2016. According to the spokesman for the Government of National Accord (GNA) appointed steering committee — which is now widely recognised as the legitimate head of the LIA following a Supreme Court ruling in late May — returns on the US$67 billion fund were only US$331 million last year.

Ambiguity about the central bank’s leadership has also contributed to the monetary crisis. The House of Representatives (House) has suspended its sessions until 18 June, and noted that it would be considering candidates to fill the positions of head of the Administrative Control Authority and central bank governor on 3-4 July. Debate on the latter’s leadership was supposed to take place in April, but the chairman of that session re-opened debate on the matter despite the majority decision to reject further debate.

It is unlikely that any new appointment will be recognised throughout the country. The High State Council head Abdurrahman Swehli has insisted that — under the terms of the rules of the Libyan Political Agreement of December 2015 — his council has to approve the appointment, but it is unlikely that the House will oblige. The acting central bank governor, Sadiq al-Kabir, has stated that he will not vacate the post unless this condition is met. But re-unification of the financial institutions is an absolutely critical element to Libya’s economic revival. It will not only help reduce the current chaos in Libya’s financial institutions but would also provide clarity for international investors as to the appropriate Libyan interlocutors. These leadership challenges are compounded by the security situation. Last week the central bank was only able to get cash shipments to the south by air after land-convoys were attacked by criminal gangs.