How armed groups are plundering Libya's banks

TRIPOLI - The disgruntled residents took to the streets of Tripoli in their thousands on 17 March, hoping to one day reclaim their city. Chanting in unison, protesters called for a strong army and police to end militia rule. As nerves lay bare, divisive political slogans and insults drew the ire of gunmen, who dispersed the crowd with gunshots.

"We eat baryush, we don't eat people's livelihoods" read one of the posters. The baryush – a croissant-shaped brioche popular in Tripoli - represents not only the city's European-inspired cafe culture but is also a symbol of resistance. Back in 2013, brioches were distributed during demonstrations as a symbol of resistance against armed groups from other Libyan towns that had started battling for control of the capital.

The situation has become even more inextricable since 2013. Violent clashes once again rocked Tripoli in March. The actors involved are affiliated with different factions in Libya's civil war, which has been ongoing since 2014. They may have their ideological differences, but their turf wars are also driven by money.

The 2011 uprising gave rise to powerful revolutionary factions that felt entitled to state funds and a foothold in the capital. Six years later, some faces may have changed, some younger fighters may have entered the scene - but the sense of entitlement persists.

Only now, the state is no longer able to cash out and funds are seized by force.

Raiding the buffet

After the revolution of 2011, transitional authorities sought to demobilise, but also reward the rebel fighters who had helped overthrow the Gaddafi regime. They formed new security structures to incorporate rebels as supplemental police and army, as well as launching a vast programme to treat the wounded and assist those willing to lay down their weapons.

But the plan backfired when around 200,000 fighters signed up for salaries and benefits - many more than had effectively fought in the revolution. Instead of disintegrating, brigades retained a great deal of autonomy. More armed groups formed.

"Back in 2012 and 2013 it was an open buffet," recalled Saif, who works for a commercial bank in Tripoli and who, like others interviewed for this piece, requested his real name not be given for fear of reprisals.

"The Central Bank had lots of money from unfrozen assets and oil revenues, and there were plenty of opportunities to tap into state coffers."

The assistance programme was abused on a massive scale, with many beneficiaries registering with several brigades to multiply their pay, or going abroad on paid holidays on the pretext of treating battle injuries. According to the banker, "they all had relatives or contacts in high places, who kept the money flowing."

In parallel, fraudulent financial and commercial transactions became common practice. People found multiple ways to exploit the growing gap between the official and the black-market exchange rate for the dinar, the Libyan currency.

In late 2013, an oil port blockade and low crude prices slashed revenue: as a result, public expenditure was drastically reduced. Suddenly, the brigades had to look for new sources of funding.

"When the militias entered the banking game, the corrupt environment was already in place, and they fitted in perfectly," said Saif. "Their contacts facilitate access, and if a bank employee refused to cooperate they could put a gun to his head." In addition to running crooked business enterprises, armed groups began to physically seize bank premises.

'Now, almost all of Tripoli's 150 or so bank branches are de facto under militia control. The official guards may have the door keys but no authority'

- Saif, banker

Saif explained: "Now, almost all of Tripoli's 150 or so bank branches are de facto under militia control. The official guards may have the door keys but no authority."

Some groups only use their leverage for small advantages - "nice militias" he said. But others extort money from wealthy bank clients and businesses, kidnap for ransom and commit robberies.

Since then, massive budget deficits, corruption and instability have gradually taken their toll. A severe financial crisis that unfolded in 2015 saw banks run out of liquidity. "The militias shot themselves in the foot," said Saif. "They still take what they can, but there is little left for them to harvest."

Black markets and bank busts

Life in Tripoli carries on, despite rising crime, skirmishes and the occasional tank on the street. But the absence of law and order and dire financial conditions place a heavy strain on the population.

"It's impossible to get by with a salary that has not been raised since 2011 while prices are skyrocketing," complained bank employee Wurud, a mother of two who also teaches private English lessons to fill the gap.

"A box of nappies used to cost seven dinars, now it's 21. The price of some vegetables like chilli peppers has multiplied by 10."

A box of nappies used to cost seven dinars, now it's 21. The price of some vegetables like chilli peppers has multiplied by 10

- Wurud, mother

The unofficial exchange rate of the dinar has risen from 1.3 to the dollar in 2014 to more than seven dinar to the dollar at the time of writing, making it expensive to import the consumer goods that the Libyan market relies on.

Banks maintain an official rate of 1.4 dinars to the dollar, which is less punishing than that found on black market exchanges (see graph below). But official institutions do not have enough foreign currency left for importers and individual clients.

Before the crash, many people could afford medical treatment and education abroad. Now, if you want to pay for anything overseas using the services of black market dealers is usually the only option: banks will not let customers transfer through official channels and at the official rate.

This raises costs five-fold and more.

In Tripoli's gold souk, which is the prime market place for currencies, wheelbarrows of cash are pushed through the narrow alleys, only a stone's throw away from the central bank.

Meanwhile, people queue for hours to withdraw weekly allowances of as little as 300 dinars from their personal accounts, or else go home empty-handed when the bank has run out of cash for the day.

Unsurprisingly, banks are often the scene of scuffles, sometimes deadly. In the first week of March, the brigade guarding Aman bank in Gurji Street killed a man in a queue dispute. Outraged residents attacked the brigade and the bank burned down after being hit by RPGs.

On 28 March, gunmen attacked the National Commercial Bank branch in nearby Souq at-Tlat, killing one policeman, injuring three and kidnapping three others. "Such incidents multiply precisely because the militias are short of money and on edge," explained Saif.

Why militias are popular

Recent protests have conveyed widespread frustration at the little progress made by the UN-backed Government of National Accord (GNA) since it arrived in Tripoli one year ago.

The GNA inherited a patchwork of semi-official brigades and security agencies with often overlapping and conflicting responsibilities and agendas. Like its predecessors, it chose to work with whoever was too powerful to be ignored and willing to tolerate their new leadership.

Despite the turmoil, most of these brigades still remain popular. Tripoli's most powerful security forces emerged as revolutionaries or neighbourhood defence groups and remain connected to their core constituencies. They deliver public services and provide security, often assisted by local volunteers.

"Ghneiwa keeps his area safe", said Nadia, using the nickname of Abdelghani al-Kikli, who heads the so-called Central Security Force in the southern neighbourhood of Buslim. She teaches at a nearby school. "We have had power cuts when the lights stayed on in Buslim. He even arranged a bank transfer for an old lady whose daughter was sick. Some call him Robin Hood."

Nadia also praised the work of the Special Deterrence Force or Radaa, a brigade headed by Abderrauf Kara, a Salafi who started in 2012 with campaigns against drugs, bootleg alcohol and prostitution. Since then Kara, has diversified operations: his well-trained men now guard the GNA, chase down IS militants and run their own prison.

People under their protection appreciate how they still go after the small fish. "The other day a friend of mine got robbed by her maid, who took off with lots of valuables," recalled Nadia. "Radaa found her within 12 hours."

But brigade leaders are not always held in such high regard. Saif is especially contemptuous of Haitham al-Tajuri, who he described as the "biggest thug" and added: "He started hijacking banks in 2013 and now controls 90 percent of the business."

• READ: How Libya's oil smugglers are bleeding country of cash

Tajuri heads the Tripoli Revolutionaries' Brigade and the so-called First Division of the Central Security Force. A report last year by the UN-appointed Panel of Experts on Libya suggests that he and his business associates were granted around $20m in fraudulent bank guarantees for imports during 2015, setting up numerous front companies and threatening Central Bank employees.

According to Saif and another well-placed source, this is only a fraction of the money appropriated by Tajuri, who has multiplied his wealth still further since then. Despite Tajuri's infamous reputation, the GNA counts him among its allies and recently had his First Division expel the rival "Salvation government" from its Tripoli headquarters.

Yet strongmen like Kikli, Kara and Tajuri are often described as a lesser evil compared with groups from other parts of Libya - in particular from the powerful city of Misrata - still present in the capital.

"They may not be an ideal choice, but at least they are from among us," said Tripoli resident Omar.

That underlying resentment against outsiders manifested itself in the recent clashes. In Tripoli's western neighbourhoods, tensions had been simmering for weeks, as residents demanded the departure of brigades from Misrata and the Nafusa mountains. The Aman bank shooting, which involved a Misratan brigade, was the final straw. "After this, residents had enough and set up barricades," said teacher Sara, who lives in the area.

To be honest, I don't care who's in charge. I just want them all to leave us in peace

- Sara, resident

For Tajuri, this seems to have been an opportunity to add another bank to his "portfolio".

On 13 March, his First Division seized the National Commercial Bank's Hay al-Andalus branch from another Misratan brigade. The ousted Nuri Friwan Brigade, which said it had been appointed by the bank, gave Tajuri 24 hours to pull out.

But the subsequent heavy fighting tilted the balance in favour of the Tripoli brigades. According to Sara, Kikli and Tajuri joined residents to push out the forces from Misrata and Nafusa mountains.

"To be honest, I don't care who's in charge," she said. "I just want them all to leave us in peace."

This article is available in French on Middle East Eye French edition.