The EU-OECD project on Promoting Public-Private Dialogue (PPD) in Libya (2020-2023) demonstrated how dialogue can serve as a cornerstone of economic transition. By engaging over 200 public and private institutions, the process helped reduce fragmentation, build trust, and identify priority reforms to foster diversification and private sector development. A key lesson learned is that inclusive dialogue is not only a mechanism for reform design but also for strengthening governance, accountability, and stakeholder ownership. Sectoral consultations revealed strong potential in Banking and Financial Services, Agribusiness, ICT, Infrastructure and Construction, and Transport and Logistics, which are critical areas for job creation, competitiveness, and resilience. PPD also highlighted that reforms require modernised legislation, clearer communication channels, and targeted incentives for the private sector to thrive. Ultimately, the project showed that PPD is more than consultation: it is a practical tool for aligning national recovery efforts with sector-specific strategies and sustainable economic growth.
Encouraging Economic Diversification in Libya Through Public‑Private Dialogues
Abstract
Executive summary
Libya’s economy continues to face long-standing challenges, with limited diversification and a business environment still largely shaped by the state. In an effort to open space for reform, the EU-OECD Project on Promoting Public-Private Dialogue (PPD) brought together people from across the public and private sectors in four cities—Tripoli, Benghazi, Misrata, and Sebha. Through a series of conversations and workshops, the project helped identify practical solutions in five key sectors, while building trust between institutions and businesses. These efforts came together in a final national dialogue, where participants outlined shared priorities for moving the economy forward.
This report presents key findings and policy recommendations across five priority sectors of the Libyan economy: Banking and Financial Services, Agribusiness, Information and Communication Technology (ICT), Infrastructure and Construction, and Transport and Logistics. These sectors were selected for their potential to drive economic diversification, support job creation, and strengthen Libya’s resilience in a fragile and rapidly evolving environment. Each chapter draws on targeted public-private dialogue sessions and OECD good practices to assess challenges, identify reform priorities, and propose actionable solutions.
The Libyan banking sector remains underdeveloped and heavily reliant on public banks with limited private sector participation. Challenges include a weak regulatory framework, limited access to credit—especially for SMEs—and the absence of a national financial inclusion strategy. Stakeholders highlighted the urgent need to modernise the banking infrastructure, introduce credit guarantee mechanisms, strengthen supervisory capacity, and promote digital and mobile banking solutions. Enhancing financial literacy and developing tailored financial products for entrepreneurs and start-ups were also prioritised.
Despite Libya’s vast arable land and a strong domestic demand for food products, the agribusiness sector suffers from inadequate irrigation infrastructure, fragmented value chains, outdated regulatory frameworks, and limited private investment. Public-private dialogue participants emphasised the need to improve land tenure systems, enhance access to agricultural finance, develop agro-processing capabilities, and invest in cold chain logistics. Enabling conditions for contract farming, market access, and rural entrepreneurship—especially for youth and women—were seen as essential to revitalising the sector.
Libya’s ICT sector holds significant potential for growth and job creation, but is constrained by weak digital infrastructure, monopolistic market structures, and outdated legislation. Participants across regions called for liberalising the sector, improving digital connectivity—especially in underserved areas—and introducing a robust legal framework for data protection, cybersecurity, and e-governance. Strategic investments in digital skills development and support for the start-up ecosystem were identified as critical enablers for a competitive digital economy.
Infrastructure gaps in transportation, energy, and utilities are among the main barriers to private sector development in Libya. Years of underinvestment, conflict-related damage, and inconsistent urban planning have disrupted service delivery and increased business costs. Dialogue sessions underlined the need for a national infrastructure strategy, greater transparency in project selection, and mechanisms to crowd in private investment, including through public-private partnerships (PPPs). Streamlining procurement processes and strengthening municipal capacity were highlighted as urgent reform areas.
The transport sector, once a strategic connector between Africa and Europe, has suffered from years of neglect and insecurity. Fragmented governance, outdated facilities, and the lack of multimodal integration have constrained trade and mobility. Stakeholders stressed the importance of rehabilitating key transport corridors, modernising customs and border procedures, and developing regulatory frameworks for logistics services. Investment in ports, intermodal hubs, and digital transport solutions were viewed as critical to restoring Libya’s position as a regional trade gateway.
