Broken by design: Libya’s profitable dysfunction

The country is richer than it was. No thanks to its leaders — or their foreign backers.

Fourteen years after Muammar Qaddafi’s fall, Libya is enjoying a sharp economic rebound. Oil production is up. Western energy firms are striking new deals. GDP growth is surging. But these signs of recovery mask a harder truth: Libya’s political dysfunction is not a temporary setback. It is the preferred situation for the country’s power brokers — and for the foreign patrons who fund and arm them.

The economy is rebounding on paper. Output recently hit 1.3m barrels a day, reviving revenues and attracting BP, Shell and ExxonMobil to fresh exploration contracts. The Tripoli-based central bank is flush, and ministries are resuming long-delayed spending. But the numbers flatter a reality in which little wealth reaches beyond the state’s payroll and its patrons. A large share of oil income is siphoned off through inflated contracts, ghost salaries and militia-run rackets, long before it reaches basic services or the wider economy. Infrastructure is crumbling. Inflation is high. Fuel queues stretch for hours. With more than 90% of state revenue tied to oil; and no credible reform agenda, the recovery is shallow and brittle.

Meanwhile, politics remain frozen in place. Two rival governments still compete for legitimacy: one in Tripoli, backed by the UN and Turkey, and another in Benghazi, aligned with Khalifa Haftar and supported by Russia and Egypt. A UN-led roadmap for elections has stalled. In Tripoli, militia violence has flared again — most recently in May after the assassination of a senior police official. No credible investigation followed.

That inertia suits Libya’s ruling cliques. The country’s wealth is carved up through opaque state contracts, militia-controlled subsidies, and smuggling networks. Holding elections or unifying institutions would threaten too many vested interests — not least among the dozens of armed groups that feed off the status quo.

Foreign powers are no less entangled. Turkey props up the Tripoli government with arms and military advisers. Russia, through its Africa Corps, maintains a strong presence in eastern Libya. Egypt continues to host Haftar and his allies. The UAE has long bankrolled his operations, including the supply of weapons and surveillance systems.

Libya’s neighbors treat it more as a bargaining chip than a partner. Tunisia is economically dependent on fuel and cash from Tripoli. Algeria prefers quiet borders and hedges diplomatically. Egypt views eastern Libya as a buffer zone and forward line of security. Morocco hosts peace talks more for symbolism than substance. Regional rivalries ensure no coordinated push for unity ever lasts.

Still, the current equilibrium is not indestructible. A sustained oil shock, a diplomatic rupture, or a major militia uprising could shift the incentives and force a political reckoning. External actors could also tie economic engagement to institutional reforms — if they wanted to.

The oil is flowing, and so is the money. But Libya’s recovery isn’t building a state. It’s paying for its absence.

*Lonzo Cook is a journalist and writer. He spent two decades at CNN in a series of senior editorial and management roles including leading breaking news operations across Asia, the Middle East and Latin America. He currently works as a senior communications strategist, partnering with corporations and executives to develop integrated communication strategies to connect with audiences in our fast paced, ever changing engagement landscape.