Libya is attempting to reset the narrative around its fragile economy by anchoring growth in trade, logistics, and manufacturing, as it prepares to sign a strategic partnership with international firms to expand and develop the Misurata Free Zone in a deal expected to attract about $2.7 billion in foreign investment.
Prime Minister Abdulhamid Dbeibah said the agreements, involving companies from Qatar, Italy, and Switzerland, would significantly expand the scale and commercial relevance of the Misurata port complex, turning it into one of the most important logistics hubs in the central Mediterranean. The project is projected to generate around $500 million in annual operating revenues, a meaningful figure for a country whose public finances remain heavily tied to oil exports.
At its core, the initiative is an attempt to tackle Libya’s most persistent economic vulnerability: overreliance on hydrocarbons. Oil still accounts for more than 95% of Libya’s economic output and almost all government revenue, leaving the state exposed to price swings, production outages, and political disputes that have repeatedly shut down oilfields and export terminals over the past decade. By contrast, the Misurata Free Zone project is being pitched as a vehicle for steady, diversified income driven by trade volumes, industrial activity, and services rather than commodity cycles.
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“This project not only enhances Libya’s position among the region’s largest ports in terms of size and capacity, but it also relies on direct foreign investment within a comprehensive international partnership,” Dbeibah said in a statement, underlining the government’s effort to attract capital without adding to public debt.
Misurata’s geographic position is central to the strategy. Located about 200 kilometers east of Tripoli, the city sits along key Mediterranean shipping routes linking Europe, North Africa, and the eastern Mediterranean, while also offering potential access to land routes toward sub-Saharan Africa. Officials believe that expanding the port’s capacity to around 4 million containers annually could allow Misurata to compete more directly with established regional hubs, particularly as global shipping lines look to diversify routes and reduce congestion risks elsewhere.
The free zone itself spans roughly 190 hectares, offering space not just for container handling but for light manufacturing, assembly, warehousing, and re-export operations. Government officials and project backers argue that this integrated model could encourage companies to carry out more value-added activities inside Libya rather than simply moving goods through its ports, helping to build a domestic industrial base that has long been stunted by conflict and underinvestment.
Job creation is another central selling point. Dbeibah said the project would create about 8,400 direct jobs and as many as 60,000 indirect roles, figures that matter politically in a country where unemployment, particularly among young people, remains high and the public sector dominates employment. Shifting labor into private, trade-linked industries would mark a structural change for Libya’s economy, even if progress is likely to be gradual.
The choice of partners also signals Libya’s broader diplomatic and economic calculus. Italy has strong incentives to support stability and development in Libya, given its reliance on Libyan energy supplies and its exposure to migration flows across the Mediterranean. Qatari investment reflects Doha’s long-standing involvement in Libya’s post-2011 political and economic landscape, while Swiss firms are often associated with logistics, finance, and industrial management expertise that Libyan officials see as critical to the project’s credibility.
Still, the scale of ambition contrasts sharply with Libya’s political reality. The country has been plagued by instability since the NATO-backed uprising in 2011, and a formal split between eastern and western factions in 2014 left it with rival administrations and fragmented institutions. Although large-scale fighting has subsided in recent years, governance remains divided, and investors continue to cite legal uncertainty, weak enforcement mechanisms, and security risks as major obstacles.
Previous attempts to attract foreign capital outside the oil sector have often faltered for these reasons, with projects delayed or abandoned amid power struggles, funding disputes, or deteriorating security conditions. Infrastructure bottlenecks, unreliable electricity supply, and bureaucratic complexity add further layers of risk, particularly for industrial and logistics operations that depend on predictable operating environments.
Against this backdrop, the Misurata Free Zone is therefore more than a port expansion for Dbeibah’s government. It is a test of whether Libya can translate relative calm into durable economic progress, and whether foreign investors are willing to commit long-term capital despite unresolved political questions. Officials are framing the project as evidence that Libya can still leverage its strategic location and state assets to generate sustainable, non-oil revenues, even in the absence of a comprehensive political settlement.
If the project proceeds as planned, it could reshape Misurata into a regional trade gateway and provide a template for similar developments along Libya’s coastline. But it is also expected to reinforce skepticism about Libya’s ability to convert investment pledges into tangible economic transformation, if it stalls.