The government has a number of mechanisms to attract foreign investment, including the Libyan Investment Authority (LIA). Established in 2006, the LIA is the country’s sovereign wealth fund and is responsible for managing investment in a diversified range of assets, with a valuation of $68.4bn in 2019. That same year, the LIA adopted a new strategy, signalling its intent to diversify its portfolio and move away from oil.
Lack of unity in the country’s governance structure at a national level has economic implications, limiting regulatory adaptability and the effectiveness of government institutions in a variety of circumstances, including the negotiation of trade agreements.
The Government of National Accord (GNA) is backed by the UN and recognised internationally and based in the capital city of Tripoli, with Abdul Hamid Dbeibeh serving as prime minister. Meanwhile, the LNA, led by General Khalifa Haftar, is based in the eastern city of Benghazi, with the country’s Parliament and rival Prime Minister Fathi Bashagha based in Tobruk.
Established with the support of the UN and the international community in 2015, the GNA has struggled to assert its authority over the entire country. The LNA, which controls the east of the country, launched an unsuccessful offensive to capture Tripoli in 2019.
A lack of transparency has been a persistent problem in Libya for decades, with billions of dollars lost due to corruption in the oil industry alone. This, coupled with concerns surrounding accountability in the country’s governance structures, has deterred foreign investment, with many international companies hesitant to enter a market that is perceived as unstable.
At the end of February 2023 Abdoulaye Bathily, the UN envoy for Libya, announced an initiative to facilitate presidential and legislative elections in 2023. The installation of a unified and widely accepted national government through transparent elections would open the way for improving the regulatory environment and bureaucratic efficiency, creating considerable opportunities on the economic front.
The number of confirmed Covid-19 cases in Libya has exceeded 507,000 since the pandemic began, as per data from the National Centre for Disease Control. More than 49,000 individuals have recovered from the disease, while the virus has claimed the lives of 6437 people.
Over 2m individuals in Libya have now received at least one dose of the Covid-19 vaccine, while more than 1m have completed the vaccination course with two doses.
While the reopening of oilfields and ports in 2021 has provided relief, concerns surrounding transparency and security, as well as bureaucratic red tape, have continued to deter many foreign companies from setting up operations in the country. Although the SFL and the LIA are progressing positively, sustained efforts to improve the overall business environment will likely attract increased foreign investment.
Read More from OBG
