Can a U.S.-Brokered State Budget Help Unite Libya?

Inside what analysts call a “pinky promise” between Libya’s rival factions.

Foreign Policy
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Can a U.S.-Brokered State Budget Help Unite Libya?

Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Analysts weigh in on what Libya’s unified state budget means for the country’s future, rebel fighters double down on their offensive in Mali, and the Economic Community of West African States moves into its new Chinese-built headquarters in Nigeria.


Libya’s rival administrations approved the country’s first unified state budget in more than a decade last month, sparking hopes of greater stability in a nation that has been sharply divided between two governments since 2014.

The April 11 agreement, which aims to reduce corruption and allocate enough money to the Libyan state-owned National Oil Corp. (NOC) to boost production, was brokered by Massad Boulos, U.S. President Donald Trump’s senior advisor for Arab and African affairs. Boulos described it on X “as part of a broader roadmap toward peace and national unification.”

Yet while the deal is a positive step, analysts told Foreign Policy that it is more of a restricted spending agreement and is unlikely to prompt broader unification anytime soon.

As Emadeddin Badi, a senior fellow at the Global Initiative Against Transnational Organized Crime, told Foreign Policy, the budget isn’t underpinned by structural reforms or enforcement mechanisms. “The deal at this stage is more of a pinky promise,” Badi said.

Libya has faced an economic crisis since civil war broke out in 2011, with rising living costs, inconsistent oil revenue, and soaring public debt. Today, in the wake of the 2020 cease-fire, both administrations—the United Nations-recognized government based in the capital, Tripoli, led by Prime Minister Abdul Hamid Dbeibah and a rival faction in the east controlled by warlord Khalifa Haftar—contribute to rampant overspending.

“The most obvious symptoms of that [spending] has been the decline in the value of the Libyan dinar,” said Rhiannon Smith, the managing director of Libya-Analysis, a consultancy.

Boulos began negotiations with the rival governments last July, with the goal of fostering peace and advancing “commercial deals” for U.S. firms in Libya, a petrostate that exports the majority of its oil to European markets. (A few weeks after the budget deal was announced in April, U.S. energy giant Chevron signed a preliminary agreement with Libya’s NOC to assess the country’s shale oil and gas potential.)

The approach in Libya aligns with much of “the Trump administration’s foreign policy, whereby American interests across various conflicts are largely viewed through economic considerations,” Belal Abdallah recently wrote for the Cambridge Middle East and North Africa Forum.

The result of negotiations was a $30 billion unified development budget, which allocates around $1.9 billion to the NOC, with other dispersals covering subsidies, staff wages, family allowances, and operational spending, according to Reuters. While many of the budget’s details have not been publicly disclosed, the overall goal is to align parallel infrastructure spending and curb state overspending.

However, Badi said, “two political entities [are] dispersing separate portions of said budget,” and there is “limited willingness to exert coercion or pressure on the Libyan parties.” Smith echoed this sentiment. “This isn’t a government agreeing to a budget,” she said. “This is two distinct political families agreeing that they’re going to limit their spending.”

The U.N. Support Mission in Libya has welcomed the agreement as “important progress towards addressing the urgent need to strengthen discipline in public expenditure management” but called for “robust oversight of public spending across Libya in line with international standards.”

Analysts including Badi and Smith say the spending framework, which concerns the 2026 fiscal year, is a temporary fix that does not address deeper structural issues, such as graft and the siphoning of oil revenues to foreign networks enabled by Russia and other international actors.

It is also unclear what the war in Iran will mean for government spending. With the conflict rattling oil markets, Libya has ramped up production to meet global demand. Last week, the NOC said oil revenue had climbed to $2.9 billion in April, up from $1 billion in February.

While the two administrations have seen a significant windfall since the outbreak of the Iran war, that money is unlikely to go toward public services or paying off the country’s debt. “Almost certainly it will probably be siphoned off,” Smith said.

The nature of the budget negotiations will also have implications for the future of Libyan politics. In talks, Boulos dealt primarily with Dbeibah’s nephew Ibrahim and Haftar’s son (and likely successor) Saddam—a move that, critics argue, sidelined wider political institutions and parties.

As Smith pointed out, the talks strengthened the legitimacy of the Haftars, whose regime is generally not recognized by the international community: “They now have a direct line to the U.S. administration.”

“It’s not very logical to hope that the stakeholders that have been at the center of dilapidating the state’s reserves and economy will spearhead a solution for its economic problems,” Badi said.


Sunday, May 3, to Friday, May 15: Nigerian President Bola Tinubu visits France, Kenya, and Rwanda.

Wednesday, May 6, to Thursday, May 7: Botswanan President Duma Boko hosts his Rwandan counterpart, Paul Kagame, in a state visit focused on trade.

Thursday, May 7: The U.N. Security Council holds a briefing on the U.N. peacekeeping mission in the contested Abyei border region between Sudan and South Sudan.

Monday, May 11, to Tuesday, May 12: Kenyan President William Ruto and French President Emmanuel Macron co-host the Africa Forward Summit in Nairobi.


Malian insurgency. After launching coordinated attacks across Mali late last month, including one that killed Malian Defense Minister Sadio Camara, rebel fighters have continued their offensive by imposing a blockade on the capital of Bamako and pushing back Malian forces and their Russian paramilitary allies in the country’s north.

So far, militants from al Qaeda-linked Jamaat Nusrat al-Islam wal-Muslimin (JNIM), alongside the Azawad Liberation Front, a coalition of Tuareg separatists, have seized the northern city of Kidal and the Tessalit army base. A recent video posted by Al Jazeera allegedly shows Malian soldiers held prisoner in Kidal.

The security crisis poses a threat to Mali’s military government, led by Gen. Assimi Goita, who also named himself defense minister on Monday following Camara’s death. More broadly, JNIM’s expansion across the Sahel endangers neighboring West African states, which are planning a standby force to handle jihadi threats.

New ECOWAS headquarters. The Economic Community of West African States (ECOWAS) formally moved into a new, Chinese-built headquarters in Nigeria’s capital of Abuja on April 28. The $56.5 million complex, which Beijing gifted to the regional bloc, is called the “Eye of West Africa.”

The ECOWAS building is the latest in a string of Beijing-built government complexes, including the $200 million African Union headquarters and the $80 million Africa Centres for Disease Control and Prevention headquarters, both located in Addis Ababa, Ethiopia.

Nigerian repatriation. Some 130 Nigerians in South Africa have already registered to fly home on flights chartered by the Nigerian government, amid rising xenophobic sentiment and attacks against Black African migrants in the country.

Nigerian Foreign Minister Bianca Odumegwu-Ojukwu cited the killing of two Nigerians in separate incidents in South Africa as the catalyst for the voluntary repatriation scheme. “Nigerian lives and businesses in [the country] must not continue to be put at risk,” Odumegwu-Ojukwu said.

Africa-France summit. Kenya will be the first non-Francophone African nation to host next week’s Africa Forward Summit. The gathering, which will take place in Nairobi on May 11 and 12, highlights France’s pivot to courting Anglophone countries amid anti-French sentiments across its former colonial nations.

In recent years, after military governments in Mali, Niger, and Burkina Faso kicked out French soldiers, France has deepened defense ties with Kenya, Nigeria, and Ethiopia, among other Anglophone nations.


FP’s Most Read This Week

  • Who Wants to Be an American Diplomat? by Sam Skove and Rachel Oswald

  • Ghana’s health deal. In the Accra Street Journal, Samuel Kwame Boadu reports that Ghana may look to the European Union to cover part of its health budget shortfall after the government rejected a $109 million aid deal with the Trump administration that would have granted U.S. entities access to sensitive health data.

    “A $50 million Digital Health Acceleration project, combining World Bank IDA [International Development Association] credits and EU grants, is expected to be presented to Cabinet by July 2026. Unlike the US deal, this project includes explicit data residency provisions aligned with Ghana’s Data Protection Act,” he writes.

    Egyptian repression. In an article for Africa Is a Country adapted from his new book, Hossam el-Hamalawy, who was among the organizers of the 2011 Egyptian uprising, argues that President Abdel Fattah al-Sisi has ushered in a new order that governs through violence, surveillance, and permanent emergency.

    “The result is a republic without a social contract, devoid of hegemony, locked in an existential war against its own people, and operating more like a colonial occupier than a national government,” he writes.

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