Libya’s eastern-based parliament has approved a 69 billion Libyan dinar ($12.7 billion) budget for its Development and Reconstruction Fund. The fund is managed by Belgassim Haftar, son of eastern military commander Khalifa Haftar, and is meant to finance infrastructure projects over the next three years.
However, the budget has sparked major political backlash during a time of growing instability. Armed clashes in Tripoli in May and June have raised fears of a full-scale civil war.
A group of 113 members of the House of Representatives (HoR) called on Speaker Aqila Saleh to suspend the budget approval. They argued that the session lacked the required quorum and broke procedural rules. These lawmakers also urged the Central Bank of Libya not to process any financial transfers related to the fund, citing legal concerns and possible institutional overreach, according to the Libya Observer.
At the same time, Prime Minister Abdul Hamid Dbeibah criticized the fund. He warned it could lead to financial mismanagement and trigger a new economic crisis. Dbeibah accused the HoR and its eastern allies of destabilizing Libya’s finances under the pretext of reconstruction.
This controversy deepens Libya’s political divide. Khalifa Haftar’s forces control key oil export terminals in the northeast. Meanwhile, Dbeibah’s internationally recognized government, backed by Turkey, governs the west. Disputes over oil revenue, control of the National Oil Corporation, and access to central bank funds remain major sources of conflict.
As tensions rise, global energy markets are closely monitoring the situation. Any disruption to Libya’s oil exports could affect Mediterranean crude prices and threaten Europe’s energy security.
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