1.1       Purpose of the Mission

The inception-phase assessment constitutes the analytical nucleus and strategic inflection point of the INVEST4Libya programme. Its purpose is to subject the project’s entire architecture—its Theory of Change, logical framework, and reform delivery design—to a scientific, methodologically defensible examination anchored in internationally recognised standards.

Over six months (January–June 2026), a senior, multidisciplinary team of experts will conduct a PEFA-informed, IMF- and WBG-aligned diagnostic across Libya’s macro-fiscal, financial-governance, and enterprise-development systems. The assessment’s mandate is not descriptive but determinant: to establish the empirical and institutional foundations upon which all subsequent implementation will rest, and to ensure that every reform measure under INVEST4Libya is credible, feasible, and sequenced within Libya’s political-economy constraints.

1.2       Strategic Context

Libya’s reform trajectory stands at a systemic crossroads, defined by structural dependence on hydrocarbons, recurrent fiscal shocks, and the fragmentation of public-sector authority. The volatility of oil revenues, the duplication of institutions, and the erosion of fiscal discipline have created a macro-economic environment where public finance, monetary policy, and investment regulation operate in isolation rather than synergy.

In this context, INVEST4Libya operates as a strategic convergence platform—a mechanism through which fiscal credibility, financial-sector governance, and private-sector dynamism can be realigned into a coherent national development pathway. The inception assessment is therefore conceived not as a baseline study but as a sovereign-scale diagnostic, designed to:

·         Identify and prioritise fiscal and financial reforms that can deliver early, confidence-building results without destabilising macroeconomic balances;

·         Evaluate institutional interdependencies among the Ministry of Finance (MoF), Central Bank of Libya (CBL), Audit Bureau, Ministry of Economy and Trade (MoE), and Privatisation and Investment Board (PIB)—the limited but decisive set of actors whose coordination determines systemic coherence; and

·         Establish the analytical foundations for a sequenced reform roadmap, linking fiscal transparency to financial governance and to the investment ecosystem required for entrepreneurship, innovation, and sustainable growth.

The Stakeholder Network Analysis highlights that reform feasibility in Libya depends less on formal mandates than on institutional alignment and signalling. Progress in one node—budget reliability or payments transparency—reverberates across the system, creating credibility loops that attract investment and consolidate reform momentum. Conversely, failure in a critical institution can cascade through the network, eroding trust and policy traction.

The inception assessment must therefore operate at a strategic altitude: mapping incentives, constraints, and interdependencies with a level of analytical depth comparable to that of IMF Article IV Consultations or World Bank Financial Sector Reviews. It must blend macroeconomic modelling, institutional diagnostics, and applied political-economy analysis into a coherent whole, yielding outputs that can withstand scrutiny by international financial institutions, policymakers, and peer reviewers alike.

1.3       Expertise France Strategic Positioning

As the implementing agency and lead technical partner of INVEST4Libya, Expertise France (EF) approaches this inception assessment as a demonstration of methodological excellence and institutional credibility. EF’s ambition is to deliver a diagnostic exercise that meets the highest standards of analytical and academic rigour.

This aspiration reflects EF’s dual identity as both a technical cooperation agency and a centre of methodological innovation within the French Development ecosystem. The Agency’s added value lies in its capacity to integrate:

·         International standards with contextual intelligence,

·         Empirical analysis with political-economy reasoning, and

·         Operational feasibility with academic-grade precision.

Accordingly, the ToRs target only senior, high-calibre experts with demonstrated experience in large-scale fiscal, financial, and institutional reform diagnostics. Entry-level or generalist profiles will not be considered. This mission demands strategic discernment, analytical discipline, and thought leadership commensurate with assignments commissioned by the IMF, the World Bank, or the EU at headquarters level.

EF’s approach to this inception phase is therefore twofold:

1.     To ensure that the analytical process and deliverables meet the highest international benchmarks of methodological transparency, coherence, and validation; and

2.     To position EF as a trusted technical interlocutor capable of translating complex reform diagnostics into actionable, nationally owned strategies for Libya’s sustainable economic transformation.

While the European Union remains the donor and contracting authority of the action, this inception mission is entrusted to EF precisely because of the Agency’s proven ability to operate at the intersection of academic rigour and operational diplomacy—a space where few actors can perform credibly in fragile and politically complex contexts.

1.4       Strategic Imperative

This inception assessment findings will precise the operational methodology of INVEST4Libya. Its success will:

·         Establish the empirical baseline for programme implementation and future evaluations;

·         Provide the analytical foundation for adjusting the Description of Action, Theory of Change, and logical framework; and

·         will contribute to the enhancement of methodologies and practices underpinning EF-led diagnostics in fragile and transitional environments.

The purpose of the assignment is to conduct a comprehensive diagnostic of Libya’s Public Financial Management (PFM) system, using internationally recognised frameworks (PEFA, IMF Fiscal Transparency Code, IPSAS), and to jointly develop a sequenced and feasible reform roadmap with Libyan institutions.

The expert will design and implement a comprehensive diagnostic exercise, engage with national and international stakeholders, analyze institutional and operational frameworks, and co-develop a sequenced reform roadmap aligned with international standards and Libya’s governance priorities.

The expert will ensure strong national ownership, coherence with donor initiatives, and production of high-quality, evidence-based analytical outputs that can inform policy decisions and capacity-building interventions.

Given the interlinkages between public finance, financial sector regulation, and private-sector development, the expert will ensure systematic coordination with the inception-phase assessments under SO2 (financial sector strengthening) and SO3 (entrepreneurship and MSME ecosystem), to guarantee methodological coherence and avoid fragmented diagnostics.

More specifically the expert will:

1. Conduct a Desk Review and Contextual Analysis
   • Compile and analyze all relevant PFM documents, laws, and strategies, including budget laws, financial regulations, audit reports, and ministerial decrees.
   • Review past reform initiatives (IMF 2013 roadmap, WB/AfDB diagnostics, EU and UNDP projects) to identify achievements, failures, and systemic gaps.
   • Map Libya’s institutional configuration across central and subnational levels to understand current PFM responsibilities and fragmentation.
   • Prepare a PFM Context Note summarizing institutional mandates, coordination structures, and ongoing donor programs.

2. Technical Input to the Establishment and Functioning of the TPC
   • Providing technical content for the TPC Terms of Reference (ToR), ensuring the mandate, scope, and analytical contributions are clear and aligned with the PFM diagnostic.
   • Advising on the technical composition of the TPC (skills and profiles required).
   • Presenting diagnostic concepts, evidence needs, and analytical expectations during TPC sessions to ensure members understand their technical role.
   • Documenting and integrating the technical feedback shared by TPC members into the diagnostic analysis and reform options.
   • Supporting EF in defining light operational tools, such as agendas, templates for technical discussions, and note-taking formats, to help structure TPC meetings.

3. Carry Out a Comprehensive Diagnostic Assessment
   • Apply the PEFA framework (Public Expenditure and Financial Accountability) and complementary tools (IMF Fiscal Transparency Code, IPSAS compliance checklist).
   • Evaluate PFM performance across the full budget cycle: planning, formulation, execution, procurement, accounting, internal/external audit, and legislative oversight.
   • Assess the degree of fiscal transparency, predictability of funds, and credibility of fiscal reporting.
   • Examine cross-cutting themes such as digitalization, gender-responsive budgeting, and environmental finance practices.

4.  Facilitate the Co-Creation of a PFM Reform Roadmap
   • Use diagnostic findings and TPC feedback to co-design a sequenced and prioritized PFM Reform Roadmap.
   • Distinguish between short-term “quick wins”, medium-term institutional reforms, and long-term systemic changes.
   • Identify potential technical assistance (TA) areas for INVEST4Libya and coordination points with other donor programs.
   • Prepare a feasibility matrix outlining institutional capacities, risks, and mitigation measures for each reform recommendation.
   • Present roadmap drafts in structured workshops for joint validation and approval by the TPC and national stakeholders.

5. Validation and Reporting
   • Facilitate at least two validation workshops (interim and final) with Libyan authorities, Expertise France and the EU Delegation.
   • Present the draft diagnostic and reform roadmap for feedback and endorsement.
   • Integrate revisions and produce final deliverables in Arabic and English.
   • Support dissemination through a Policy Brief summarizing key reforms, and contribute to a Lessons Learned Note on PFM reform trajectories in Libya.

The assignment will adopt a participatory, evidence-based, and context-sensitive approach, ensuring both analytical rigor and institutional ownership by Libyan authorities.

The methodology will unfold through a phased process, integrating international diagnostic tools with tailored national engagement strategies.

Throughout all phases, the expert will work in close coordination with the Senior National Expert to ensure the analytical process is grounded in institutional realities, and that all technical milestones benefit from timely engagement with Libyan counterparts.

The expert shall also maintain systematic coordination and methodological coherence with the diagnostic exercises under SO2 and SO3, ensuring that the three components remain fully aligned and mutually supportive given their intrinsic interdependencies.

1. Preparatory Phase – Inception and Framework Alignment

The expert will begin with an inception phase to refine the analytical framework, confirm the scope with Expertise France (EF) and national partners, and ensure complementarity with existing assessments (IMF, WB, AfDB, EU).

During this phase, the expert will:

• Map key stakeholders and institutional entry points across the Ministry of Finance, Ministry of Planning, Central Bank of Libya, Audit Bureau, and Parliament with the Senior National Expert supporting institutional entry points and access discussions.
• Define the technical mandate, structure, and analytical functions of the Technical Piloting Committee (TPC)
• Prepare the Inception Note outlining the diagnostic methodology, timeline, validation arrangements, and the proposed technical role of the TPC.
• Present and validate the methodological plan with EF, the EU Delegation, and Libyan authorities.

2. Diagnostic Phase – Analytical Assessment

The diagnostic phase will begin once the TPC is constituted and operational so that national institutions can guide and review the process.

During this phase, the expert will:

• Apply PEFA 2023 as the core analytical tool, complemented by the IMF Fiscal Transparency Code and IPSAS benchmarks.
• Gather and triangulate quantitative and qualitative data, including workflow mapping and structured interviews with institutional facilitation supported by the Senior National Expert.
• Analyse institutional performance across the PFM cycle and identify bottlenecks affecting fiscal discipline, budget credibility, cash management, reporting, and oversight.
• Ensure that diagnostic findings reflect linkages with SO2 (financial governance and investment framework) and SO3 (entrepreneurship and service-delivery ecosystem), particularly where PFM reforms enable or constrain reforms in these areas.
• Work closely with the TPC, which will support data validation, interpretation of findings, and accuracy checks, with logistical and institutional coordination assisted by the Senior National Expert.

3. Consultation Phase – Participatory Validation

This phase ensures that diagnostic findings are grounded in Libyan realities and institutionally endorsed.

During this phase, the expert will:

• Conduct structured interviews, focus groups, and consultations with ministries, oversight bodies, and development partners, with the Senior National Expert facilitating access and participation.
• Facilitate TPC technical review sessions to refine and validate diagnostic findings.
• Coordinate with SO2 and SO3 experts to validate cross-component implications, ensuring that findings are consistent across fiscal governance, financial-sector governance, and the entrepreneurship ecosystem.
• Convene a multi-stakeholder validation workshop.
• Finalise the PFM Diagnostic Report (EN/AR) with contextual adjustments supported by the Senior National Expert..

Once validated, the diagnostic serves as the agreed evidence base for the reform roadmap.

4. Reform Roadmap Development – Co-creation of Solutions

Based on the validated diagnostic, the expert will lead the co-creation of a sequenced and feasible PFM Reform Roadmap.

During this phase, the expert will:

• Prepare a reform options paper informed by diagnostic gaps, institutional constraints, and national priorities.
• Apply feasibility scoring and risk–capacity matrices to identify realistic implementation pathways and institutional responsibilities.
• Facilitate co-creation workshops with the TPC to prioritise and sequence reforms into short-term quick wins, medium-term improvements, and long-term governance reforms.
• Identify priority technical assistance (TA) needs for INVEST4Libya.
• Draft the PFM Reform Roadmap (V1) integrating analytical depth with national feasibility considerations.

This phase ensures that the roadmap is actionable, strategically sequenced, and aligned with the program’s operational capacity.

5. Synthesis and Validation – From Analysis to Policy Action

The final phase consolidates all technical outputs into accessible policy products and secures high-level endorsement.

During this phase, the expert will:

• Prepare and deliver a final validation workshop to present the reform roadmap with the Senior National Expert supporting institutional participation and contextual framing.
• Integrate feedback and finalise the PFM Reform Roadmap (EN/AR).
• Confirm the alignment of SO1 final outputs with SO2 and SO3 to ensure coherence across the programme’s overall reform architecture.
• Produce a concise policy brief summarising key findings and reform priorities.
• Deliver a final presentation to EF, EUDEL, and Libyan authorities.

This stage ensures the roadmap is institutionally endorsed and ready for operationalisation.

Throughout the process, the expert will emphasize capacity transfer by involving Libyan technical counterparts in data collection, analysis, and validation. This ensures the outputs are not only technically sound but also institutionally owned and implementable.

5.1       Governance Approach

The governance and validation architecture of the inception-phase assessment is designed to balance technical independence with institutional legitimacy. Given the strategic sensitivity of Libya’s fiscal and financial domains, the validation process must ensure that analytical findings are credible, nationally anchored, and internationally defensible.

The governance system rests on three complementary layers:

1. Expertise France (EF) – ensuring methodological rigour, operational discipline, and donor compliance;
2. Libyan Technical Piloting Committee – ensuring political legitimacy, contextual realism, and national ownership;
3. European Union Delegation – ensuring policy alignment, coherence with the EU Special Measure 2024, and donor visibility.

5.2       Institutional Configuration

The assessment’s governance structure will operate through a dual-validation mechanism between Expertise France and the Libyan Technical Piloting Committee, supported by structured communication with the EU Delegation and EF Headquarters (Paris).

This configuration ensures that validation is both technically robust and politically grounded, maintaining a clear chain of accountability while preserving EF’s analytical autonomy