The African Development Bank Group has released its 2025 Country Focus Report for Libya titled "Making Libya's Capital Work Better for its Development".
The report presents a comprehensive analysis of Libya's recent macroeconomic trends and medium-term outlook, with a particular emphasis on domestic capital mobilization, the evolving financial landscape, and the use of innovative financing instruments.
It also proposes a coherent set of short, medium, and long-term policy options designed to accelerate economic growth, strengthen resource mobilization, and promote inclusive and sustainable development. The publication provides policymakers, development partners, and investors with timely, data-driven insights to inform decision-making.
According to the report, Libya's economy contracted by 0.4% in 2024, but is expected to rebound strongly, with growth forecast at 12.4% in 2025 and 4% in 2026, supported primarily by improvements in oil production. Despite persistent challenges, the publication underscores Libya's considerable development potential, rooted in reconstruction needs, significant natural resource endowments, and opportunities for broader economic diversification.
The report also estimates that achieving Libya's economic transformation will require annual investments of approximately $6.9 billion by 2063 as structural reforms take root. Progress, however, continues to be constrained by a heavy reliance on oil revenues, a limited tax system, and underinvestment in strategic sectors. The financial system remains shallow, limiting the flow of capital needed to support growth and diversification, while the private sector operates below its potential due to high levels of informality and regulatory bottlenecks. Addressing these structural challenges and prioritizing economic diversification is essential to restoring stability and securing long-term prosperity.
Malinne Blomberg, Deputy Director General for North Africa and Country Manager for Libya, emphasized the Bank's commitment to supporting Libya's development agenda. "Libya's untapped assets--its strategic location, natural wealth, and human capital--are pillars of long-term growth," she noted. "With the right tools and partnerships, we expect Libya to translate its potential into measurable progress. The African Development Bank remains fully committed to supporting an enabling environment for reconstruction and economic diversification and strengthening institutions and infrastructure."
Among its key recommendations the report calls for a phased reform strategy, with the short-term focus on improving resource management and transparency. Medium-term efforts would prioritize economic diversification and stronger private-sector participation. Over the long term, policy actions would consolidate a resilient and diversified economy by broadening revenue sources, modernizing tax policies, and reinforcing institutional and legal frameworks.
The African Development Bank Group calls on development partners to deepen their engagement to bolster institutional capacities, support sustainable development, and contribute to Libya's economic transformation.
To learn more about the Libya report, click here.
