Days after the decision to end the duties of the executive authority in Tripoli was issued, the Presidential Council announced that it had taken a unanimous decision to elect a new governor for the Central Bank of Libya and form a new board of directors. What are the details of this decision and what are its effects on the economic situation in the country?
Regarding this decision, economic expert Dr. Omar Zarmouh told the “Ain Libya” network: “Regarding what is happening in or around the Central Bank, it can be said in short that what is happening are conflicts with unforeseen consequences, so we fear the negative effects of these conflicts and their results on the Libyan economy.”
He added: “The Central Bank is not managed by an individual, but by a board of directors. What we notice is that the Central Bank’s board of directors has only held one meeting since 2014 until this year, 2024, which is the meeting in which the exchange rate was changed on 12/16/2020, while the Banking Law stipulates that the Central Bank’s board of directors must meet at least once a month, and the minimum number of meetings that it should have held over ten years is 120 meetings, and out of 120 meetings, it held one meeting.”
Dr. Zarmouj said: “This is a major administrative and professional mistake committed by the Central Bank,” adding: “The responsibility, in my view, lies primarily with the governor, and although the governor called for a meeting, there was no response.”
The economic expert continued to the “Ain Libya” network: “This point has a legal solution, but the governor did not care about the legal solution, and preferred to manage the Central Bank alone, and in his management alone during the past ten years, Mr. Governor made many mistakes, which are considered mistakes against the economy, and the decisions he took that led to the creation of a black market from about mid-2014 to 2020, and when the exchange rate changed in the aforementioned meeting, the black market did not end completely, but we consider it to be finished during 2021 and 2022, but since the tenth month of 2023 it began to recover again, due to his policies that created great turmoil in the monetary aspect.”
Dr. Zarmouh added: “One of the mistakes made is that the Governor should or should be assumed to know that Article 5 of the Banking Law stipulates that the function of the Central Bank must be to work on monetary stability, and even when monetary turmoil occurs for reasons beyond the control of the Bank, it must work to address it.”
He added: “What we see from the governor is that he creates monetary disturbances, and this is what he has done since the tenth month of 2023 until now, including the decision he issued on February 1 regarding some controls, which the first to violate was the Central Bank itself, and then after that he came with the tax, and despite the issuance of a court ruling, he did not comply with the court ruling, and this means tampering with the law, violating judicial rulings, and tampering with the Libyan economy.”
Dr. Zarmukh added: “With the governor’s recent positions since the end of 2023, we find that he has become involved in politics, and is no longer working professionally, and has become a political party.”
He added: “On the part of the Presidential Council, we know that the Presidential Council, according to the law, whether we look at the Banking Law No. 1 of 2005 or the political agreement, we find that the Presidential Council does not have the power to change the governor or appoint the governor, and therefore I believe that the Presidential Council is aware of this fact, and therefore it has activated a previous decision of the House of Representatives, which is the decision issued in 2018, which stipulates the appointment of Mr. Mohamed Al-Shokry as Governor of the Central Bank.”
Dr. Zarmoh pointed out that: “The point that is unclear to me so far is that I do not know the extent to which the Presidential Council is able to implement its decision and quickly, because it says it will be implemented, and this is meaningless. Therefore, it is either able to implement its decision or it should not have taken such a decision. According to the legal experts, it is a revealing decision, meaning it is a decision issued by a previous party or taken for granted, but rather it is a process of activating an issued decision. This is from the perspective of the legal form or legal classification of what the Political Council did. Regarding the Presidential Council appointing a new governor, this does not have the power according to the law.”
The economic expert continued to the Ain Libya Network: “The other point, saying that the Presidential Council appointed a board of directors is also illogical, and I do not think it is correct for two reasons. First, we did not see any decision from the Presidential Council. We read a statement from the media office of the Presidential Council, but we did not see a decision. If he had a decision, why did he not publish it? The second point, the issue of appointment, is not within his jurisdiction either, and it is within the jurisdiction of the legislative authority in consultation with the governor. After the new governor begins his work, the legislative authority can consult with him in appointing members of the board of directors. The members of the board of directors other than the governor are 8, 7 of whom are appointed, while the eighth is the Undersecretary of the Ministry of Finance, who is a member in the capacity and does not need any decision. This is not within the jurisdiction of the Presidential Council.”
“We have not seen any document from the House of Representatives indicating that it decided to activate a previous decision of the House of Representatives to appoint the Board of Directors, and I do not believe that the House of Representatives has the right to issue a decision that is contrary to the law. It has the right to change the law, but it does not have the right to issue a decision that is contrary to the law. For example, the decision that the House of Representatives issued previously to give the governor and his deputy the authority (the powers of the Board of Directors), this is incorrect and illogical because it is contrary to Banking Law No. 1 of 2005, so there is currently no Board of Directors, and no one has the right to make a decision that falls within the jurisdiction of the Board of Directors,” Dr. Zarmouh added.
Regarding the tasks expected to be achieved by the new governor, Dr. Zarmouh said: “I believe that if the Presidential Council is able to implement its decision to activate the previous decision of the House of Representatives, to appoint Mr. Mohamed Al-Shokri, then I believe that what is expected of him is to do what the previous governor failed to do, which is to create monetary stability in application of Article No. 5 of Banking Law No. 1 of 2005. If he does that, it will be a very great achievement by the new governor, in addition to my hope that he will work on forming the board of directors. Of course, the law does not stipulate that the board of directors be proposed by the governor, but rather by a decision of the House of Representatives after consultation with the governor.”
Dr. Zarmouj added: “There is a difference between consultation and proposal. If the House of Representatives was not convinced by the governor it had previously appointed and there is nothing to indicate that it cancelled its decision because the last decision, according to the legal experts, was taken without a legal quorum, meaning the decision in which it cancelled its decision to cancel Shukri’s appointment is an illegal decision because the legal quorum was not available according to the legal experts.”
“Also, saying that the House of Representatives decided to extend the term of Mr. Al-Siddiq Al-Kabeer is also illogical, because Al-Siddiq Al-Kabeer, from the House of Representatives’ point of view, is dismissed, and dismissal does not extend his term,” he added. “We are surprised by this, and some legal experts have raised such questions. How can the House of Representatives dismiss the governor, and then, after several years of dismissal, extend his term? It extends the term of a person who does not follow it and does not recognize him as governor. How is that? Did it appoint him again? This is not possible because the political agreement requires that the governor be appointed in consultation with the State Council, and this did not happen.”
Regarding the kidnapping of Musab Muslim, the bank’s IT manager, Dr. Zarmoh told the “Ain Libya” network: “This is a matter that requires investigation, a judiciary, and a prosecution. Although I read, we do not know how true that is, that the person in question was not kidnapped, but was summoned by some security agencies to hear his statements on a matter we do not know what it is, and then he was released. If that is the case, it is considered a normal matter and does not deserve to raise any controversy about it.”
Regarding the impact of the attempt to forcefully replace the bank’s leadership on Libya’s access to international financial markets, economic expert Dr. Omar Zarmoug said: “The issue of appointing or replacing the governor is an internal matter, and external parties should have no involvement in it,” adding: “But unfortunately there may be interference due to the weak political situation in Libya, but in terms of what should be, they should have no involvement.”
He added: “The issue of replacing the bank’s leadership by force is the issue, not replacing a legitimate leadership by force, but rather it is the activation of a previous decision. If the previous decision was from a legitimate body, which is the House of Representatives, if this is true, then implementing it by force becomes one of the justified things, and no one should interfere in it. However, if there is a mistake, then the mistake is with those who cling to the position despite the existence of a decision to dismiss him.”
Dr. Zarmouj continued: “This decision should be examined from a legal perspective. If the decision is sound, then the current governor should carry out the handover process without any need for any kind of pressure or force, unless he wants to entrench himself in his position without caring about the legal aspects. In my opinion, the point here is in the legal interpretation.”
“As for access to international financial markets, of course, if the procedures are legal, the signatures should be replaced normally. Just as the previous governor was replaced from the previous era, which of course was changed because of the revolution, the one after him will be replaced, and no one has the right to object. If there is an effective objection from external forces, this is a reflection of the lack of statesmen among us and our extreme weakness,” he added.
Dr. Zarmouj continued: “In my opinion, we must ensure that the decision taken by the Presidential Council is legally justified. As I mentioned previously, the decision is not the appointment of a new governor, but rather the decision is the activation of a previous decision by the House of Representatives, and there is a difference between the two matters.”
“As I said before, the Presidential Council has not published its decision yet and we have not seen it, so it is difficult to evaluate it properly. All we have seen is a statement. If the Presidential Council is confident in what it is doing from a legal perspective, it must implement its decision quickly. If it implements its decision quickly, I do not think there will be a major problem. There may be small problems that will end.”
“But if he is not confident in the legality of his decision, there will be a back and forth, and there may be procrastination or difficulty in implementation. In this case, this difficulty will be reflected in the economic situation and confusion, chaos and pessimism will increase among businessmen and traders. This will be reflected in the parallel market and the exchange rate of foreign currency will rise, and consequently the value of the Libyan dinar will decrease. I do not mean the official value, but rather the value in the parallel market, and we hope that this does not happen,” Dr. Zarmouh concluded.
Last update: August 19, 2024 – 21:44
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2024-08-19 21:43:29