Libya's parallel government in the east has sold bonds worth more than $23 ...
BENGHAZI, Libya - Libya’s parallel government in the east has sold bonds worth more than $23 billion to fund its wage bill, bypassing the central bank in Tripoli and creating a potential financial black hole if the country reunifies, bankers and diplomats said.
The eastern government is backed by Khalifa Haftar, a general whose Libyan National Army controls the east and has been deployed in the south since January, taking control of oilfields. The recent success of the LNA has led its supporters to urge Haftar to order his troops north to take Tripoli. To cover the wage bill and fund its army, which has just fought a three-year battle for control of Benghazi, the east has raised 32 billion dinars since 2014 via bonds, bypassing Tripoli.
The bonds are sold by the eastern finance ministry to its own central bank branch, now installed in a new building in Benghazi. Hibri said he is considering starting a secondary bond market to raise 10 billion dinars from citizens and state bodies in the east, such as social insurance funds and banks.
In a small reprieve for the east, Tripoli as agreed to public pay salaries from 2018 worth 177 million dinars a month, Hibri said.The eastern debt comes on top of an estimated 65 billion dinars that the Tripoli authorities have piled up since 2014, turning to the central bank there to fund a welfare state and expensive public services.
University graduates have also been added, swelling the number of public servants in Libya to 1.8 million from little over one million in 2010, diplomats say.
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