About Libya

Trade and Investment in the New Libya

In 1999, when the UN Security Council suspended more than a decade of sanctions, Libya began to change dramatically. As the country pursued a policy of diversifying its income away from oil and gas, it began attracting more foreign interest. And although the State continued to dominate the economy Libya’s private sector grew.

Reform, though sluggish, was underway, with Libya’s oil revenues driving massive investment programmes in the country’s infrastructure and many other sectors such as transport and telecommunications, banking and financial services and healthcare.

Geographically, Libya is close to Europe – a huge consumer market and source of supply. And during the past decade, Libya has consistently ranked as North Africa’s top performing economy, with little debt, a healthy capital surplus, a relatively small, adaptable and educated workforce, and carefully planned budget expenditures.

However, despite the reforms, doing business in Libya continued to present significant challenges to foreign participants: decision-making was sometimes slow and arbitrary, contracts could often be subject to late or incomplete payments, and the lack of transparency and frequent changes in legislation caused frustration.

The popular uprising which began in Benghazi in February 2011 and spread throughout the entire country, in just six short months caused the ouster of the Gaddafi regime after more than 40 years in power.

Political and humanitarian issues aside, the removal of the old regime and the establishment of a new governing authority in Libya can only be regarded as a positive development for the country’s international trade and investment prospects.

The National Transitional Council has already stated its commitment to genuine economic reform and to creating a business environment conducive to international partnership and private sector participation.

New market entrants and British companies with longstanding experience of the Libyan market will inevitably be faced with significant new challenges as they compete for contracts or seek to re-establish themselves in Libya. But in the long-term, the trade and investment potential of a free, democratic Libya must surely outweigh the difficulties associated with doing business in the New Libya.