Libya’s division, bureaucracy hinder investment flow- State Department

Division of state institutions, bureaucracy, and corruption were key obstacles to promoting foreign direct investments in war-torn Libya, despite the country’s colossal need in terms of infrastructure and economic diversification, the US State department said.

“Despite the high potential for domestic and foreign investment in Libya due to its reconstruction needs, unmet consumer demand, and rich natural resources, the country still faces a difficult investment environment,” the US State Department said in a report.

It cited the country’s instability, division of state institutions, unclear bureaucracy, burdensome regulations, and widespread corruption among the hindrances to investors.

Libya ranked very low in Transparency International’s 2023 Corruption Perceptions Index (170 out of 180 countries) and in the World Bank’s “Ease of Doing Business” Index (186 out of 190 countries).

On bureaucracy, the report highlighted that “the process of granting licenses and permits is often subject to long and unexplained delays, and decisions are usually based on subjective and non-transparent criteria, allowing for widespread corruption and exploitation.”

Rival armed groups continue to “jockey for control over the country’s political institutions and economic resources, which means that insecurity and instability remain a cause for concern,” the report said.