Crisis within Libyan Central Bank leaves significant effect on Tunisia
Date
9/17/2024 2:42:50 AM
(MENAFN) The crisis within the Libyan Central bank is impacting not just Libya's internal politics but also has significant effects on Tunisia, a neighboring country with strong trade ties to Libya. As reported by Jeune Afrique magazine, the ongoing issues with the Libyan Central Bank could lead to disruptions in the Tunisian market, potentially depriving around 7 million Libyans of access to food and medicine from Tunisia. Additionally, this situation threatens the operations of approximately 1,200 Tunisian companies that depend on Libya as their fifth-largest export market.
The power struggle for control over the Central Bank of Libya between the governments in Tripoli and Benghazi is escalating concerns about the deepening of this crisis. The situation has become severe enough that the United Nations has intervened in an attempt to mediate and contain the conflict. Fouad Kadiche, the international director of CONNECT, the Tunisian employers' association for small and medium-sized enterprises, was quoted by Jeune Afrique as saying that the Central Bank of Libya has ceased issuing letters of credit, a crucial step for Libyan importers to make payments to their suppliers.
Libya relies on Tunisia for nearly all its consumer goods, including essentials like food, healthcare supplies, vehicles, and textiles. These imports account for about 39 percent of Libya's GDP. However, the ongoing blockade at the Central Bank could bring this trade to a halt, creating a risk that Libya might run out of these crucial supplies. A source in Tripoli indicated that while companies are still operating for now, consumers are stockpiling due to fears of an impending permanent crisis. Despite reassurances from Abdul Hamid Dbeibah's government that everything is under control, anxiety among Tripoli's residents is growing.
For exporters, the crisis is already taking a toll, as the market has been effectively closed overnight. In Tunisia, the potential fallout could be severe. With exports to Libya valued at 2.65 billion dinars (approximately $800 million) in 2023, Libya stands as one of the few countries with which Tunisia maintains a positive trade balance. The continuation of this crisis could thus have disastrous consequences for the Tunisian economy.
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