International Investment Could Help Libya Build a More Diverse Economy

Libya’s economic future is often discussed through the familiar themes of oil production, reconstruction and political stability. Yet another factor could play a major role in the country’s development: building international partnerships that create productive industries and strengthen domestic business capacity.

For years, much of the international business activity in Libya has focused on importing finished goods. While imports meet immediate demand, they do little to develop the industrial skills, supply networks and production capacity needed to diversify the economy over the long term.

A different approach would see international companies invest in technology, expertise and local supply chains while helping Libyan businesses become part of wider regional and global markets.

One example is the developing partnership between Turkey’s Tosyali Holding and Libya United Steel Company (SULB), chaired by entrepreneur Ahmed Gadalla. Tosyali brings extensive experience in steel production and direct reduced iron, while SULB provides an established industrial platform in Benghazi and links to Libya’s broader economic potential.

The first phase of the proposed project is expected to support annual production of around 2.5 million tonnes of direct reduced iron. Longer-term plans could increase capacity to as much as 7.5 million tonnes.

The importance of the project extends beyond steel production. A large industrial operation can create demand for Libyan contractors, engineers, transport companies and suppliers. It can also give workers opportunities to develop technical skills while introducing international standards and practices.

Over time, such projects can encourage the emergence of interconnected businesses, creating supply chains that support wider industrial growth.

The agricultural sector offers another opportunity. Italy’s tomato processing industry demonstrates how basic agricultural products can be transformed into higher-value goods for export. Companies specialising in processing and packaging can generate considerably more value than exporting raw agricultural products.

For Libya, this model could mean developing production beyond the farm gate, with investment in processing, packaging, logistics and export networks.

The same principle could apply across other sectors. Access to capital, technology and international expertise can help establish productive capacity that supports sustainable economic growth.

Gulf countries could become important partners in this process. Qatar and other Gulf economies have extensive experience in developing infrastructure and internationally connected commercial networks.

The development of the Misrata Free Zone port terminal illustrates the potential. Qatari, Italian and Swiss partners have brought international expertise to a project designed to strengthen Libya’s port infrastructure and its links with global trade.

Libya’s Mediterranean location gives it potential to connect European, African, Middle Eastern and Gulf markets. With stronger infrastructure and domestic production, the country could move beyond its role as an importer and develop a more diversified economy.

The challenge is to combine international investment with domestic capacity building, allowing global partnerships to support businesses, workers and industries inside Libya.