US-backed deal risks entrenching Libya’s corruption
The US-backed deal aimed at breaking Libya free from it’s political paralysis is raising fresh questions over whether it can deliver genuine change in a country plagued by endemic corruption.
In a report published on July 20th, Chatham House has warned that efforts to end Libya’s political division, through a power-sharing agreement between rival elites, could fail to improve governance, while potentially deepening the corruption and financial mismanagement that continues to burden the country.
The warning comes as US efforts to resolve Libya’s political deadlock intensify, with Massad Boulos, US President Donald Trump’s senior adviser on Arab and African affairs, seeking to bring together the two main rival political camps. Libya remains divided between the UN-recognised Government of National Unity (GNU) in Tripoli, controlled by the Dbeibah family, and the Benghazi-based Government of National Stability (GNS), aligned with Khalifa Haftar’s Libyan Arab Armed Forces (LAAF).
Boulos’ proposal would seek to unite the Haftars and Dbeibah’s alongside other key constituencies under a single government. In June, LAAF deputy commander Saddam Haftar travelled to Washington for talks with US Secretary of State Marco Rubio, as Boulos sought the Haftar family’s backing for a power-sharing arrangement. The Dbeibah family did not travel to Washington, although Boulos continues to seek its support.
Opponents of the proposal fear it could reinforce family rule and legitimise the two rival families, while doing little to address the concerns of ordinary Libyans. The focus on dividing political power among elites risks overlooking the state’s ability to provide essential services and also sidelines the pathway to national elections.
Two recent reports produced by a coalition involving Libya’s Audit Bureau and National Anti-Corruption Commission highlight the scale of the challenges facing the country. Examining subsidised fuel and medicine supply chains, the reports describe systems marked by weak oversight, conflicts of interest and significant financial losses.
The fuel report found that Libya’s fuel import bill exceeded $9 billion in 2024, equivalent to almost $1,200 per person. Imports had more than doubled since 2021, while fuel consumption by state-affiliated armed groups and the Tripoli South Power Plant rose sharply. The report suggested that vested interests may be controlling lucrative supply chains, with subsidised public goods potentially diverted to black markets or smuggled abroad.
Similar concerns were identified in the medicine sector, where the absence of a national supply framework and a flawed system for registering pharmaceutical companies have allowed a small number of firms to expand rapidly. Some were found to have direct links to state officials and parliamentarians involved in shaping procurement policies.
The US-mediated unified budget for Libya, agreed in April, has yet to be meaningfully implemented, highlighting how political agreements negotiated abroad, without a clear implementation plan, have done little to change economic realities on the ground.
Chatham House argues that these findings raise questions over whether political power-sharing alone can provide the foundations for economic development. Without stronger financial transparency, public-service priorities and clear mechanisms to ensure implementation, a unified government could simply formalise existing arrangements without changing conditions on the ground.
As criticism of the US-backed plan mounts within Libya, a notable omission from the Chatham House report is the fact that there is an absence of a clear timeline for national elections in the US-backed power-sharing proposal, raising questions over how long an interim political arrangement could remain in place. Without a defined path towards elections, the deal risks focusing on the redistribution of power among Libya’s rival elites rather than establishing a clear route towards a democratically legitimate, unified government.
The US-backed power-sharing proposal has also faced scepticism over whether it can overcome the entrenched divisions between Libya’s rival political camps. Speaking to the Financial Times, Claudia Gazzini, a senior analyst at the International Crisis Group, described hopes of reconciliation as “wishful thinking”, arguing that there is little public discussion in Benghazi about reaching an accommodation with Tripoli.
Instead, she said, “There’s no public narrative here in Benghazi about reconciling with the other side or that it’s time to move on. It is all about the achievements of the people now in power and it’s all based on identifying Tripoli as the enemy.”
Ultimately, the success of the US-backed plan will depend on whether it delivers genuine institutional reform rather than simply rearranging, and consolidating, Libya’s existing centres of power. Without firm safeguards against corruption, greater accountability and a credible path towards elections, the agreement risks entrenching the very authoritarian and patronage-based systems that have kept Libya divided, allowing rival elites to consolidate their influence under the guise of national unity.
Chatham House, Libya Audit Bureau, Financial Times, Maghrebi.org
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