Libya signs first east-west financial deal in 13 years

After several rounds of meetings and diplomatic efforts, the work of Massad Boulos, President Trump’s Senior Adviser on Middle Eastern and African affairs, in bringing Libya’s rival centres of power into dialogue may be yielding results.

According to Libya Herald, on April 11th, the Central Bank of Libya (CBL) welcomed the signing of Annex No. 1 to the Unified Development Agreement.

The agreement represents a step toward unifying financial policy and strengthening public spending discipline, marking the first financial agreement between Libya’s polarised eastern and western administrations in over 13 years.

The CBL stated that the agreement aims to support financial sustainability, promote balanced regional development, enhance exchange rate stability, and strengthen the Libyan dinar.

The agreement has been welcomed by both the Government of National Unity (GNU), based in western Libya, and the Government of National Stability (GNS) based in eastern Libya.

As reported by Libya Observer on April 12th, the Head of the Presidential Council is one of the key governing bodies in western Libya.

On X, Mohamed al-Menfi said the agreement reflects the legitimacy of relevant institutions, enhances transparency, and adopts a realistic approach to managing the country’s existing political division.

The GNS described the agreement as an important step toward unifying institutions and improving economic stability nationwide, calling it a “foundation stone” for launching balanced development programs nationwide.

Both the CBL and the GNU explicitly thanked Boulos for his efforts in facilitating the agreement; the GNS expressed appreciation for the CBL and all those involved, without directly acknowledging the US role.

Beyond efforts to promote reunification, Boulos is also working to position Washington advantageously, particularly regarding Libya’s vast oil resources.

This strategic focus comes at a time when global competition over energy routes and supplies is intensifying, especially following disruptions affecting key chokepoints, including the Strait of Hormuz.

China, Russia, and several European countries, most notably Italy, are also seeking to expand their influence in Libya’s energy sector.

While this financial agreement marks a first step toward reunification, Boulos’s plan has not been accepted by either of Libya’s rival power centres.

On the contrary, the proposal has generated tensions within both camps, highlighting the extent of internal fragmentation.

In the same post on X, al-Menfi also stressed that the implementation of the agreement must ensure the regular collection of oil revenues through official channels in accordance with the law, warning against distortions caused by contracts for the development of marginal oil fields.

Revenue management remains a critical issue, as it continues to be affected by smuggling and competing visions between eastern and western authorities.

Although this agreement represents a step toward a more unified Libya, it remains insufficient to resolve the country’s deeply entrenched political and institutional crisis, a situation that the UN has repeatedly emphasised.

Libya Herald, Libya Observer, Maghrebi.org