The compromise that held Libya’s central bank together unravels as Naji Issa tenders his resignation

Libya’s central bank governor is out. What now? Libya’s eastern-based House of Representatives approved on Thursday the resignation of Central Bank of Libya (CBL) Governor Naji Issa and backed board member Fowzi Musbah Abukhzam to replace him on an interim basis, pending ratification.

The resignation is part of a Haftar family play to consolidate control over the country’s sovereign money institution. “The new nominee is ‘100% pro-Saddam Haftar,’” Jalel Harchaoui, a Libya analyst at the Royal United Services Institute, tells us, referring to the eastern commander’s son, who runs Libyan National Army ground forces and has become the family’s operational face.

Issa’s departure matters because it suggests that the compromise that put him in the chair is unraveling. Issa took the job in 2024 when the House and Tripoli-based High Council of State (HCS) jointly agreed on his appointment — the agreement that ended the previous stand-off over control of the central bank. He submitted his resignation in August without explaining why, and both chambers initially asked him to stay until the issue could be discussed.

It also means control of Libya’s oil revenues could shift to the eastern factions led by the Haftars. The CBL is the only Libyan institution that touches every USD of oil revenue — around 90% of state income. Whoever controls it signs off on spending, allocates FX, and decides whose budget priorities get funded.

Two forced-entry incidents on sovereign financial institutions the same week sharpened the stakes. Militants forcibly entered the CBL on Thursday and breached the governor’s office, the bank said in a statement that held the Defense Ministry responsible for failing to secure the building. The day before, masked men in military uniform also stormed the headquarters of Libya’s Audit Bureau, the body charged with safeguarding public funds. The UN mission in Libya called it an “unacceptable” attempt to install a disputed deputy head of the institution by force.

The response from Tripoli split the west in public. Naji Mukhtar Ali, first deputy of the HCS, rejected what he called “unilateral measures” by the House presidency and told Issa to stay, only to be later contradicted on the same day by HCS head Mohamed Takala, who wrote to Abukhzam to ask him to assume the governor’s duties on an interim basis pending a joint east-west agreement on a permanent appointment, Reuters reports.

REMEMBER- Earlier this month, we reported on a public dispute between the CBL and the National Oil Corporation (NOC) over October’s oil revenues, in which USD 839 mn of the USD 1.2 bn the NOC said it had transferred to the bank was unaccounted for. The gap — whether an accounting one or an actual leakage — remains unresolved.

The rift over controlling the CBL shows the limits of a unified budget without a unified government. Issa, now-former governor, had publicly flagged this risk, warning that Libya’s first unified budget in 13 years — announced in April under pressure from the Trump administration — was being asked to do work that only a unified political authority could do. He pointed at pressure to raise spending from the country’s two factions and persisting structural economic problems as two major problems preventing fiscal progress, as we previously reported.

What’s next: The next House session and the HSC public stance on the final appointee will be the ultimate test. If parliament ratifies Abukhzam’s appointment and the HSC backs the candidate, the Haftar family’s preferred candidate takes the chair with cross-camp cover. If no consensus is reached, Libya risks going back to two rival central bank governors — a scenario the country lived through before and one that usually disrupts fiscal and FX stability.