AfDB and Libya Partner with Japan to Launch $1M Project for Modernizing Public Financial Management

Libya’s Finance Minister, Dr. Khalild Al-Mabrouk, highlighted that reforming PFM is critical to the government’s priorities and instrumental in advancing Libya’s long-term development goals.

The African Development Bank (AfDB) and the Government of Libya have entered into a landmark partnership to enhance Libya’s public financial management (PFM) systems through a $1 million grant from the Fund for African Private Sector Assistance (FAPA). This initiative, supported by the Government of Japan, is a strategic step toward fostering economic growth, improving governance, and strengthening private sector development in the North African nation.

The “Strengthening Enabling Business Environment through Public Financial Management Support Project” (SEBE-PFM) aims to modernize Libya's financial systems by integrating digital tools and promoting transparency and accountability. These reforms will help Libya improve public expenditure management, streamline public procurement, and enhance service delivery, creating a more competitive business environment conducive to private sector growth.

The project’s comprehensive PFM reform strategy will include:

Digitization of Financial Systems: An IT infrastructure assessment, data center feasibility study, enterprise architecture planning (EAP), and readiness evaluation for an Integrated Financial Management Information System (IFMIS) will be key components.

Enhancing Governance and Efficiency: By reforming State-Owned Enterprises (SOEs) and strengthening Public-Private Partnership (PPP) frameworks, the project aims to stimulate private sector involvement and drive economic diversification.

Capacity Building: Technical support will be provided to build institutional capacity for PFM systems, ensuring sustainability of reforms.

The initiative is funded under FAPA, a trust fund managed by the AfDB and supported by Japan to advance private sector development across Africa. Speaking at the signing ceremony, Ms Malinne Blomberg, Deputy Director General for AfDB in North Africa, described the project as a “strategic investment in Libya’s future”, made possible through Japan’s generosity.

Japan’s Deputy Head of Mission and Special Coordinator for Libya, Mr. Masaki Amadera, reiterated Japan’s commitment to supporting Libya’s stabilization and economic recovery, emphasizing that “modern financial systems are essential for Libya’s growth and prosperity.”

Libya’s Finance Minister, Dr. Khalild Al-Mabrouk, highlighted that reforming PFM is critical to the government’s priorities and instrumental in advancing Libya’s long-term development goals.

Broader Implications for Libya

Libya faces significant challenges, including high dependency on hydrocarbons, a fragmented financial structure, and governance gaps. This initiative comes at a pivotal time as the country seeks to stabilize its economy and lay the groundwork for sustainable development.

By streamlining financial processes and fostering private sector growth, the SEBE-PFM project is expected to unlock new opportunities for economic diversification, job creation, and poverty reduction. The enhanced PFM systems will also enable Libya to better manage its significant financial assets, ensuring they contribute to inclusive and equitable development.

AfDB’s Vision for Libya

The project builds on AfDB’s ongoing efforts in Libya and aligns with its broader strategy to enhance governance, promote resilience, and support sustainable development across the continent. With this new initiative, Libya is poised to benefit from stronger institutions, improved financial transparency, and a more dynamic private sector.

Looking Ahead

The SEBE-PFM project will span three years (2024–2027) and is expected to serve as a model for future PFM modernization initiatives in other African nations. As Libya implements these reforms, it is anticipated to set a benchmark for leveraging digital tools to enhance governance and drive economic recovery in post-conflict settings.

This collaboration underscores the shared vision of the AfDB, the Libyan Government, and Japan in fostering stability and prosperity through strategic investments in governance and economic infrastructure.