Event

Last month proved to be another chaotic month in Libya’s transition. On 10 October Prime Minister Ali Zeidan was kidnapped from his hotel room in Tripoli. The abduction was carried out by armed militia men, reportedly connected to rivalling members of Libya’s interim parliament, the General National Congress (GNC). Meanwhile, disruptions in oil terminals and production sites have continued to impact Libya’s vital energy sector (see also Risk Monthly of September). Protests at these sites are related to a broad series of demands, including more autonomy (in the east of the country, which holds about 60% of Libya’s oil reserves), rights for non-Arab minorities (in the west), higher wages and more transparency. As a result, oil production and exports remain decimated compared to capacity. Besides, last month, gunmen succeeded in robbing no less than USD 55 million from a Central Bank van.

Impact on country risk

Although the abduction of PM Zeidan only lasted a few hours, the mere fact that he could be detained highlights the severity of the political chaos and anarchy Libya is currently going through. The political challenges for the transition government and the country are rampant: armed militias remain active and powerful, the country still lacks a permanent constitution, divisions within the GNC are widening, federalists in the east are pressing for more autonomy and security risks remain high. In this context, ONDD’s current cover policy (off cover for medium-/long-term political risk and short term political risk in category 6 out of 7) is unlikely to be eased soon.

Analyst: The Risk Management Team, r.cecchi@credendogroup.com