Event

On 22 September, Libya’s latest elected parliament, the House of Representatives, approved a new government, led by outgoing Prime Minister Abdullah al-Thinni. Due to security concerns, this parliament is forced to convene in Tobruk, a city in the east of the country. In Tripoli, the capital, Libya’s previously elected parliament, the General National Congress (GNC), also appointed a new government. Tripoli is currently controlled by Libya Dawn, an Islamist-Misratan militia coalition, which refuses to recognise the House of Representatives. Last Monday, rival factions from the Tobruk parliament started talks brokered by the UN, calling for a ceasefire and dialogue, but their influence over armed factions is likely to be very limited.

Impact on country risk

The emergence of two rival parliaments seriously complicates the functioning of what remains of the Libyan state, particularly as the latest elected government does not even seem to have physical access to the ministries and other important institutions located in Tripoli. These also include the central bank and the National Oil Corporation (NOC), two central entities for the country, the functioning of which is now seriously impeded. Taking into account the countrywide turmoil, concerns also emerge over the reliability of the oil production data that are reported by the NOC. These data indicate that the country’s production may be at its highest level of the past 12 months. The chaos has also worsened Credendo Group’s payment experience with Libya in recent weeks, though payments still seem to come through sporadically.

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