The Financial Evolution of IS Libya
While it was once the Islamic State's most notable franchise, IS Libya is now considered a counter-terrorism success story. The group first established its presence in Libya in 2014 when local fighters returned to the country from Syria. Several individuals established a base for the group in Dernah, and subsequently pledged allegiance to Islamic State leader Abu Bakr al-Baghdadi. For 2 years, IS Libya quickly grew in membership and strength. By controlling large amounts of territory, the group was able to raise money through looting, taxation, smuggling, corruption, and coerced donations.
However, IS Libya’s success didn’t last.
Eventually kinetic counter-terrorism operations by Libyan and Western forces, along with the group’s own financial mismanagement, substantially weakened IS Libya.
After establishing an initial base in Dernah, IS Libya publicly announced its provinces in the East (Barqah), the South (Fezzan), and central Libya (Tripolitania). The group launched a variety of state-building initiatives while conducting attacks on armed forces and civilians to gain territorial control. At the height of its power, IS Libya was estimated to have thousands in its ranks.
After the group’s territorial strongholds mostly fell to government forces in late 2016, operatives fled to the central desert in Libya. As of 2023, the UN estimates that IS Libya’s membership has been reduced to a couple hundred fighters in the country. It is confined to the southern part of Libya, and the remaining members mostly target militias using guerilla-style tactics.
While IS Libya is a shadow of its former self, the group still plays a role in regional logistics and financing for other IS provinces.