Written by consultant Mustafa Al-Manea, Libya and the African Development Bank Strategy 2025–2028
At this stage, Libya seeks to move beyond traditional models of financing development projects and to abandon exclusive reliance on the public budget. This comes as the Government of National Unity works to restore confidence with regional and international partners, stimulate foreign capital, and leverage external financing instruments. In this context, the renewed partnership with the African Development Bank (AfDB) stands out as one of the most important practical tools to support this transformation, especially after the Bank adopted this week a Strategic Cooperation Framework with Libya for the period 2025–2028.
The Bank, which counts more than 80 African and non-African countries among its members and manages an annual financing portfolio exceeding USD 10 billion, does not limit its role to providing loans. Rather, it supports governance, institution-building, and the mobilization of financing from multiple sources. This approach is of particular importance for Libya, which today is searching for sustainable financing and development solutions.
The launch of the Bank’s 2025–2028 strategy coincides with the Government of National Unity, headed by Abdul Hamid Dbeibeh, adopting a more open approach toward economic reform, stimulating development, and building partnerships with foreign investors.
However, the structural challenge within the public spending framework remains. Salaries and subsidies consume more than 70% of the general budget, leaving only a limited margin for development and investment. This makes reliance on public resources alone insufficient to drive economic growth or create sustainable employment opportunities.
Key Pillars of the Strategy
The Bank’s strategy for Libya for 2025–2028 focuses on several key objectives, most notably:
- Strengthening governance and public financial management, including support for budget reforms, improving spending efficiency, and developing transparency and accountability systems, including the digital transformation of public finance.
- Rehabilitating and developing infrastructure, particularly in the electricity, water, transport, and logistics sectors, to ensure an environment attractive to private investment.
- Focusing on the energy sector and energy transition, supporting the sustainability of the electricity grid, improving energy efficiency, and preparing Libya to gradually benefit from renewable energy projects.
- Agriculture and food security, by modernizing agricultural value chains, developing irrigation systems, and linking local production to markets, thereby reducing dependence on imports.
- Empowering the private sector and small and medium-sized enterprises, by improving access to finance, enhancing the business environment, and supporting entrepreneurship, especially among youth.
Previous Experiences of the Bank
The African Development Bank’s experience has proven successful in countries such as Morocco, Egypt, Kenya, Ethiopia, Senegal, and Rwanda, where the Bank linked financing interventions to institutional reforms. In these and other countries, the Bank financed projects with direct economic and social impact, including electricity generation, transmission, and distribution projects; highways and cross-city and cross-border logistics corridors; water and sanitation plants; integrated agricultural programs (production, storage, transport, and marketing); credit lines for local banks to support the private sector; and public-private partnership (PPP) projects. These are models that can be adapted to the Libyan context.
Financing Instruments Available from the Bank
Among the financing tools that Libya can leverage from the Bank are:
- Sovereign and non-sovereign guarantees to reduce investor risk
- Co-financing with international institutions and sovereign wealth funds
- Financing for public-private partnerships (PPP)
- Direct financing for the private sector
- Intra-African trade support windows
Conclusion
The African Development Bank’s strategy for the period 2025–2028, if coupled with the continued governance and reform efforts led by the Government of National Unity, can represent an opportunity to contribute to sustainable growth whose impact is felt by citizens and from which the state benefits over the long term.
Consultant Mustafa Al-Manea is a Libyan lawyer and legal and economic expert with more than 24 years of experience. He has worked with a number of investment institutions, sovereign funds, and banks in several countries around the world, including Libya. He serves as an expert for international research centers and worked for years as an advisor to the Central Bank of Libya. He has also served as a board member of the Libyan Investment Authority and the Libyan Foreign Bank, represented Libya in meetings of the World Bank and the International Monetary Fund, and heads the executive team for the Prime Minister’s initiatives and strategic projects. He has worked as an expert and lecturer with the American Bar Association and is a member of the Libyan-American Council for Trade and Investment. He has published numerous research papers and articles in Arab, American, and European newspapers and is known for his bold views on economic and financial transformation issues.
