A topic for debate…

Libya occupies a unique geographical position that offers significant potential to become a major player in global supply chains. As a country on the southern Mediterranean coast, Libya serves as a natural bridge between Europe, Africa, and the Middle East. This makes it an ideal hub for countries seeking to expand their trade networks, particularly with Africa’s emerging markets. However, despite this immense potential, Libya’s political strife, outdated infrastructure, and complex geopolitical dynamics present significant obstacles. So, what opportunities does Libya present? What challenges does it face? And how can it unlock its full potential in global commerce? MORE IMPORTANTLY, IS LIBYA A GATEWAY OR A BARRIER?

 

THE ADVANTAGE OF GEOGRAPHY: CAN LIBYA BRIDGE CONTINENTS?

Libya’s geographical position has long been seen as a potential bridge between Europe, Africa, and the Middle East. However, to truly grasp its potential, it’s crucial to examine whether Libya can navigate the complex geopolitical and economic realities that accompany such a role.

With 1,700 kilometers of Mediterranean coastline, Libya offers significant trade and logistics advantages. Its ports—Tripoli, Misrata, and Benghazi—could serve as critical nodes in global supply chains, offering European and Middle Eastern nations direct access to sub-Saharan Africa. The Misrata Free Zone (MFZ) stands out, offering tax incentives and simplified regulations for foreign companies. But can this truly transform Libya into a logistics powerhouse? The infrastructure limitations are clear. Libya lacks a modern railway system, and even its road networks are underdeveloped, complicating its ability to facilitate efficient trade flows.

While Libya’s vast oil reserves give it strategic leverage, particularly with European energy markets (71% of its oil exports [those legal and known] are directed to Europe), the question remains: Can this potential be realised amid political instability and economic challenges? Ongoing conflict has hindered Libya’s ability to invest in critical port and transport infrastructure, while also making foreign investors wary, despite the allure of its resources and strategic location.

Historically, Libya has been a key transit point for migrants from sub-Saharan Africa into Europe. This underscores its geographical significance and raises questions about its political leverage. Could Libya’s geopolitical position turn it into a crucial player in European-African migration policies or in controlling trans-Saharan trade routes?

Libya’s geographic advantages are undeniable, but its future as a bridge between continents hinges on its ability to stabilise politically, modernise infrastructure, and capitalise on its economic resources. The bigger question is whether it can overcome internal and external challenges to leverage its position in the global arena.

 

THE IMPACT OF THE ARAB SPRING AND ITS AFTERMATH

The Arab Spring of 2011 brought a seismic shift in Libya’s political and economic landscape. The fall of Muammar Gaddafi, which many hoped would lead to a more democratic and prosperous nation, instead plunged Libya into years of civil war and instability. The revolution led to the fragmentation of Libya into regions controlled by rival factions, severely affecting its economic and logistical capabilities.

One major impact of the Arab Spring on Libya’s potential role in global supply chains was the frequent disruption of key infrastructure. Ports and transportation networks were often shut down or heavily damaged due to conflict.

International airlines avoid Libya due to political instability and security concerns, while Libyan airlines are forbidden from flying directly to international destinations. The frequent closure of airports, poor infrastructure, and lack of a unified government have further diminished confidence in the safety of Libya’s airspace, contributing to the international flight suspensions.

The lack of a unified government meant many foreign investors, particularly in logistics and transport, were reluctant to invest in projects that could be compromised by political instability. Additionally, the rise of powerful militias controlling critical economic assets like oil fields and ports further complicated Libya’s ability to function as a reliable player in global trade.

The 2011 Arab Spring caused instability, damaging infrastructure and deterring investment, while security issues and fragmented control disrupted Libya’s role in global trade.

 

BUT CONFIDENCE CAN BE REBUILT – WHAT DOES LIBYA NEED TO DO?

To regain the confidence of the international community and fully leverage its strategic location, Libya must address several critical issues:

  1. Political Stability: Libya’s most urgent priority is achieving lasting political stability. The divided government—with rival factions in the east and west—must work toward national unity. A unified government would provide the political stability necessary to attract foreign investment in infrastructure and logistics projects. Stability would also enable the development of clear regulatory frameworks, essential for international businesses.
  2. Investment in Infrastructure: Libya’s current infrastructure is insufficient to support its potential role in global supply chains. While ports like Misrata and Benghazi are functional, they lack the capacity to handle modern container ships and large-scale cargo operations. The road network is similarly underdeveloped, and there is no functional rail system due to the conflict.

To address these issues, Libya needs significant investment in transportation infrastructure, including modernizing port facilities, upgrading road networks, and developing air freight capabilities. The Misrata Free Zone has already begun attracting foreign investment, and the construction of the coastal road from Tunisia to Egypt is a positive step. However, large-scale projects will require international support in terms of financing and expertise.

  1. Reforming the Banking and Financial Sector: Libya’s fragmented banking system continues to be a significant obstacle to participating in global supply chains. Issues with the central bank complicate financial transactions and undermine investor confidence. Libya needs a unified banking system with clear, transparent regulations to facilitate international trade and investment.

Efforts to strengthen regulatory frameworks, as recommended by the World Bank and African Development Bank, would increase transparency and improve financial governance. These reforms are essential for reducing risks associated with liquidity and financial mismanagement.

Libya must achieve political stability, invest in infrastructure, and reform its financial system.

 

FOREIGN INTERVENTION, GEOPOLITICAL RIVALRIES, AND COMPETING AMBITIONS

Libya’s strategic location and vast natural resources have attracted the attention of many foreign powers, each with their own geopolitical ambitions. Turkey, Russia, Egypt, the United Arab Emirates and many others have all intervened in Libya’s civil conflict, backing different factions in the hopes of securing favorable economic and political outcomes. Some key examples (but there are many others) are as below.

  1. France: France has supported the Libyan National Army (LNA) particularly because of its interest in counterterrorism operations in the Sahel and to secure its energy stakes, particularly in the south of Libya. France’s backing of the east is also linked to its desire to curb Islamist movements in North Africa​
  2. Turkey: Turkey has provided military and logistical support to the Government of National Accord (GNA) in Tripoli, largely to expand its influence in the region and secure energy and maritime agreements in the Mediterranean. Turkey’s intervention has been seen as part of its broader ambition to establish itself as a dominant player in Africa and the Eastern Mediterranean
  3. Russia: Russia has backed the east and the LNA, providing arms and mercenaries through private military companies like the Wagner Group. Moscow’s interest in Libya is tied to securing access to oil resources, increasing its strategic foothold in the Mediterranean, and challenging Western influence in North Africa​
  4. Egypt: Egypt has supported the east due to its desire to maintain stability on its western border and counter Islamist forces, which it views as a threat to its own internal security. The controlling authority in the east’s secular stance aligns with Egypt’s interest in preventing political Islam from gaining power in the region
  5. United Arab Emirates (UAE): The UAE has provided significant military support to the east, including airstrikes and weaponry, in an effort to counter the rise of Islamist movements in the region. The UAE’s involvement is driven by its broader strategy of curbing political Islam and expanding its influence in North Africa and the Mediterranean
  6. Italy: Italy, with historical ties to Libya and key energy interests, has attempted to mediate the conflict, although it has leaned toward supporting the GNA in Tripoli. Italy is deeply invested in maintaining a stable Libya to manage migration flows and secure its energy
  7. Qatar: Qatar has backed the GNA, providing funds and weapons, largely due to its alliance with Turkey and its support for political Islamist movements in the region. Qatar’s involvement reflects its broader strategy of expanding influence through soft power and aligning with groups that challenge Gulf rivals like Saudi Arabia and the UAE

These interventions have complicated Libya’s internal conflict, turning it into a proxy battleground for regional and global powers. Each country’s involvement is driven by a combination of strategic interests, including control over oil resources, counterterrorism, migration control, and ideological rivalry.

These, and other foreign interventions have exacerbated Libya’s internal divisions and complicated efforts to establish a unified government. Until these geopolitical rivalries are resolved or managed, Libya will struggle to achieve the political stability needed to attract foreign investment and play a significant role in global supply chains.

A clear example of this interference is the current situation regarding oil production, the selling of crude oil and the importation of refined products.

 

INFRASTRUCTURE: A MIXED PICTURE

Libya’s infrastructure is currently inadequate to support its ambitions as a logistics hub. Roads and airports are in disrepair due to years of neglect and conflict, and while ports like Misrata have remained operational, they lack modern facilities to handle large-scale international trade.

Significant investment in infrastructure is essential for Libya to become a key player in global supply chains. The government has already begun efforts to attract foreign investment in infrastructure, but much more needs to be done.

 

HOW DOES LIBYA OPEN THE COMMERCIAL HIGHWAY?

Libya has tremendous potential to play a strategic role in global supply chains due to its geographical location. However, political instability, underdeveloped infrastructure, and complex geopolitical dynamics continue to hinder its ability to fully exploit these advantages.

To move forward, Libya must prioritise political stability, invest in infrastructure, reform its financial systems, and address the geopolitical challenges posed by foreign interventions. With the right reforms and international support, Libya could become a critical link in global supply chains, serving as a gateway between Africa, Europe, and the Middle East.