What is the Libyan Investment Authority?

The Libyan Investment Authority (LIA) is a government-controlled entity that manages the sovereign wealth fund of the nation of Libya. The sovereign wealth fund has assets in excess of $67 billion, primarily from oil revenues, making it Africa's largest sovereign wealth fund.

Civil war, political turmoil, and economic sanctions led to a period of suspension of the Authority and the freezing of some of its assets. As of August 2020, the Libyan Investment Authority was pressing the United Nations to allow it to invest billions of dollars that have been sitting idle in its accounts.

Role of the Libyan Investment Authority

The Libyan Investment Authority was established by government decree in August 2006 after the lifting of international economic sanctions that had precluded foreign investment in Libya.

Key Takeaways

  • The Libyan Investment Authority is Libya's sovereign wealth fund, which administers and invests the nation's oil revenues.
  • It aims to diversify the Libyan economy and invest in the nation's future.
  • The Authority has been thwarted in its aims by years of war, political turmoil, and international sanctions.

The LIA is a holding company that manages government investments from the oil and gas industry. Its primary role is to manage the assets derived from Libya’s oil output and diversify the nation's economy.

The LIA oversees the assets of the Libyan Arab Foreign Investment Company (LAFICO) and manages government investment in other industries including real estate, agriculture, stock and bond shares, and infrastructure development.

The Authority is Africa’s largest sovereign wealth fund and a member of the International Forum of Sovereign Wealth Funds.

Libyan Investment Authority Structure

As a government entity, the Libyan Investment Authority ultimately answers to the Libyan prime minister and is managed under governance processes. The LIA is governed by a board of trustees that consists of a mix of government officials and Libyan banking experts.

The vast majority of LIA assets are managed outside of Libya, although a portion is reserved for domestic investment through its Internal Investment Development Fund. The stated goals of the LIA is to secure the future prosperity of Libya by enhancing its financial and economic stability and creating long-term investment prospects.

The LIA also manages the Economic and Social Development Fund (ESDF), which is designed to benefit Libya’s low-income citizens.

Effects of the Political Upheaval on the Libyan Investment Authority

Libya has endured a grueling period of war and upheaval beginning in the NATO- and U.S.-supported Libyan Revolution of 2011, which culminated with the capture and torture-murder of its long-reigning autocratic leader, Muammar Gaddafi. Gaddafi's removal and death subsequently led to chaos and ongoing civil war. Since 2014, the nation has been wracked by conflicts among several rival factions seeking control of Libya.

The LIA underwent a period of suspension due to the conflicts arising from the Libyan Civil War, and many of its assets remained frozen by international sanctions for years. At one point, two rival management teams claimed ownership of the Libyan Investment Authority. In 2016, a five-member caretaker committee that included representatives from two of the factions had control of the Authority.