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Home Human Rights Libyan State Bank Drags Burkina Faso to World Bank Tribunal Over Nationalised Bank

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Libyan State Bank Drags Burkina Faso to World Bank Tribunal Over Nationalised Bank

West Africa WeeklyAugust 31, 20262 Mins read6

The Libyan Foreign Bank, a state-owned investment bank, has filed an international arbitration claim against Burkina Faso at the World Bank Group’s International Centre for Settlement of Investment Disputes (ICSID), challenging the military government’s 2024 nationalisation of a commercial bank they jointly owned. The case, registered on August 17, 2026, as Libyan Foreign Bank v Burkina Faso, case number ARB(AF)/26/3, centres on Banque Commerciale du Burkina, which was established in 1997 as a 50-50 venture between the Libyan institution and the Burkinabe state. Burkina Faso nationalised the entire bank in May 2024, a move that has now escalated into an international legal battle. The amount of compensation being sought by the Libyan Foreign Bank has not been disclosed.

The nationalisation is part of a broader drive by Captain Ibrahim Traoré’s military government, which seized power in September 2022, to increase state control over strategic assets. The government has presented its actions as necessary to ensure that more economic value remains inside the country. When announcing the takeover, Burkina Faso said the commercial bank had experienced operational difficulties and accused the Libyan partner of failing to provide the support required for the institution to operate properly. The government said the takeover followed unsuccessful exchanges between the two shareholders.

The Libyan Foreign Bank has rejected that account, maintaining that it had complied with the agreement establishing the bank, regional banking requirements and corporate laws applying across much of West and Central Africa. It has accused Burkina Faso of violating the agreement between the parties and decisions made under the West African banking system. No international tribunal has ruled that either party breached its obligations.

The Libyan Foreign Bank was established in 1972 and is owned by the Central Bank of Libya. It was created to manage Libyan investments and banking interests outside the country. For decades, Libya used state-owned institutions and bilateral ventures to extend its economic influence across Africa. The Burkina Faso bank was one result of that strategy. By nationalising it, Traoré’s government took control not only of a domestic banking institution but also of an asset half-owned by another African state, transforming the dispute from a domestic banking intervention into an international investment case.

The case is part of a wider nationalisation drive that has also affected the mining sector. Burkina Faso nationalised two gold mines and transferred several exploration licences to a state-owned company in 2025. Foreign investors have responded with legal claims, with Australian mining company Sarama Resources separately pursuing arbitration after Burkina Faso withdrew an exploration permit. The Libyan banking case expands the legal risk beyond gold and mining into financial services and introduces an unusual state-against-state commercial conflict, as the claimant is not a conventional private investor but a bank owned by Libya’s central bank.

The arbitration is at an early stage. A tribunal will have to determine whether it has jurisdiction before considering whether Burkina Faso violated the rights of the Libyan Foreign Bank. The case could examine the obligations of the host state and the protections available to foreign investors under international investment agreements. With the case now registered, Burkina Faso faces yet another legal challenge from a foreign investor, this time from a fellow African state, as the military government’s policy of resource nationalism continues to draw international scrutiny and legal pushback.