Economy of Libya

Theeconomy of Libyadepends primarily on revenues from thepetroleum sector, which represents over 95% of export earnings and 60% ofGDP.These oil revenues and a small population have given Libya one of the highestnominal per capita GDPinAfrica.
After 2000,Libyarecorded favorable growth rates with an estimated 10.6% growth of GDP in 2010. This development was interrupted by theLibyan Civil War, which resulted in contraction of the economy by 62.1% in 2011. After the war, the economy rebounded by 104.5% in 2012. It crashed again following theSecond Libyan Civil War.As of 2017, Libya'sper capita PPP GDPstands at 60% of its pre-war level.
Libyan GDP per capita was about $40 in the early 1920s and it rose to $1,018 by 1967. In 1947 alone, per capita GDP rose by 42 percent.
The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2022–2027). Inflation below 5% is in green.The annual unemployment rate is extracted from theWorld Bank, although theInternational Monetary Fundfind them unreliable.
Notes:1. For purchasing power parity comparisons, the US Dollar is exchanged at 0.77 Libyan Dinars only.
Mean wages were $9.51 perman-hourin 2009 (amounts to a compensation of $1598 for 21 working days of 8 hours).
Libya is anOPECmember and holds the largestproven oil reservesin Africa (followed by Nigeria and Algeria), 41.5 Gbbl (6.60×10m) as of January 2007, up from 39.1 Gbbl (6.22×10m) in 2006. About 80% of Libya's proven oil reserves are located in theSirte Basin, which is responsible for 90% of the country's oil output.The state-ownedNational Oil Corporation(NOC) dominates Libya's oil industry, along with smaller subsidiaries, which combined account for around 50% of the country's oil output. Among NOC's subsidiaries, the largest oil producer is theWaha Oil Company(WOC), followed by theAgoco, Zueitina Oil Company (ZOC), andSirte Oil Company(SOC). Oil resources, which account for approximately 95% of export earnings, 75% of government receipts, and over 50% of GDP. Oil revenues constitute the principal foreign exchange source. Reflecting the heritage of the command economy, three-quarters of employment is in the public sector, and private investment remains small at around 2% of GDP.
Falling world oil prices in the early 1980s and economic sanctions caused a serious decline in economic activity, eventually leading to a slow private sector rehabilitation. At 2.6% per year on average,real GDPgrowth was modest and volatile during the 1990s. Libya's GDP grew in 2001 due to high oil prices, the end of a long cyclical drought, and increased foreign direct investment following the suspension of UN sanctions in 1999. Real GDP growth has been boosted by high oil revenues, reaching 4.6% in 2004 and 3.5% in 2005. Despite efforts to diversify the economy and encourage private sector participation, extensive controls of prices, credit, trade, and foreign exchange constrain growth.
Although UN sanctions were suspended in 1999, foreign investment in the Libyan gas and oil sectors were severely curtailed due to the U.S.Iran and Libya Sanctions Act(ILSA), which capped the amount foreign companies can invest in Libya yearly at $20 million (lowered from $40 million in 2001). As of May 2006, the U.S. has removed Libya from its list of states that sponsor terrorism and has normalised ties and removed sanctions. This clears the road for U.S. oil companies to exploit Libyan oil and is expected to have a positive impact on the Libyan economy.[1]
The NOC hopes to raise oil production from 1.80 million bpd in 2006 to 2 million bpd by 2008. FDI into the oil sector is likely, which is attractive due to its low cost ofoil recovery, high oil quality, and proximity to European markets.Most Libyan oil is sold on a term basis, including to the country'sOilinvestmarketing network in Europe; to companies likeAgip,OMV,Repsol YPF, Tupras, CEPSA, and Total; and small volumes toAsianandSouth Africancompanies.
Notes:1. Energy Information Administration (2007)
In November 2005,Repsol YPFdiscovered a significant oil deposit of light, sweet crude in theMurzuq Basin. Industry experts believe the discovery to be one of the biggest made in Libya for several years. Repsol YPF is joined by a consortium of partners including OMV, Total andNorsk Hydro. Also located in Murzuq Basin is Eni'sElephant field. In October 1997, a consortium led by British companyLasmo, along with Eni and a group of five South Korean companies, announced that it had discovered large recoverable crude reserves about 800 kilometres (500 mi) south of Tripoli.Lasmo estimated field production would cost around $1 per barrel. Elephant began production in February 2004.
WOC's Waha fields currently produce around 350,000 bbl/d (56,000 m/d). In 2005, ConocoPhillips and co-venturers reached an agreement with NOC to return to its operations in Libya and extend the Waha concession 25 years. ConocoPhillips operates the Waha fields with a 16.33% share in the project. NOC has the largest share of the Waha concession, and additional partners include Marathon andAmerada Hess.
Libya has five domesticrefineries:
Notes:1. Amounts in barrels per day.
In 2007, mining and hydrocarbon industries accounted for well over 95 percent of the Libyan economy.Diversification of the economy into manufacturing industries remain a long-term issue.
Althoughagricultureis the second-largest sector in the economy, Libya depends onimportsin most foods. Climatic conditions and poor soils severely limit farm output, and domestic food production meets only about 25% of demand. Domestic conditions limit output, while higher incomes and a growing population have caused food consumption to rise. Because of low rainfall levels in Libya, agricultural projects such as theKufraoasis rely on underground water sources. Libya's primary agricultural water source remains theGreat Manmade River(GMMR), but significant resources are being invested indesalinizationresearch to meet growing demand. Libyan agricultural projects and policies are overseen by a General Inspector; there is noMinistry of Agriculture,per se.
Libya produced in 2018:
In addition to smaller productions of other agricultural products.
The tourism industry was heavily hit by theLibyan Civil War. Before the war tourism was developing, with 149,000 tourists visiting Libya in 2004, rising to 180,000 in 2007, although this still only contributed less than 1% of the country's GDP. There were 1,000,000 day visitors in the same year.The country is best known for its ancient Greek and Roman ruins and Sahara desert landscapes.
Libya posted a 3.3% rate of population growth during 1960–2003. In 2003, 86% of the population wasurban, compared to 45% in 1970. Although no reliable estimates are available,unemploymentis reportedly acute: over 50% of the population under the age of 20. Moreover, despite the bias oflabor marketregulations favoring Libyan workers, the mismatch of the educational system with market demand has produced a large pool of expatriate workers, with typically better-suited education and higher productivity. However, because of shortages for manual labor, Libya has also attracted important numbers of less skilled immigrants.Expatriateworkers represent an estimated fifth of the labor force.
Although significant, the proportion of expatriate workers is still below oil producing countries in thePersian Gulf. Foreign workers mainly come from theMaghreb, Egypt, Turkey, India, the Philippines, Malaysia, Thailand, Vietnam, Poland,Chad,Sudan, andBosnia and Herzegovina.They tend to earn relatively high wages, taking either skilled or hard manual jobs. Census data for 2000 show the share of expatriates earning over LD 300 (US$230) per month was 20%, compared to 12% for Libyan nationals. A campaign encouraging conversion of qualifiedcivil servantsto entrepreneurs, in the face of public sector over employment and declining productivity, does not seem to be producing the desired results thus far.
The Government is in the process of preparing a financial sector reform program. Recent legislation setting corporate governance standards for financial institutions makes progress towards better management and greater operational independence of public banks. However, Libyan public banks still lack management structures supported by skills in critical areas likecredit, investment,risk management, and information and control systems.
The new banking law reinforces the independence of theCentral Bank of Libya(CBL) and offers a legal framework for regulating banking activities, even if some provisions call for improvement. Despite progress brought by the new banking Law that specifies and limits its duties and responsibilities, the CBL remains the owner of the public banks, with the associated potential conflict of interest between ownership and regulation.
Financial sector reform has also progressed with partialinterest rateliberalization. Interest rates have been liberalized on deposits, while a lending rate ceiling has been set above thediscount rate. TheLibyan Stock Exchange, established in 2007, is the first exchange of its kind in the country.
In 2011,Libya Oil Holdingshad its €38m stake in Irish exploration firmCircle Oilfrozen on foot of aEuropean Unionorder that's been put in place to put pressure on theGaddafi regime.
Two trans-African automobile routes pass through Libya:
Household income or consumption by percentage share:lowest 11%:NA%highest 10%:NA%
Industrial production growth rate:2.7% (2009)
Electricity - production:24 billion kWh (2007 est)
Electricity - production by source:fossil fuel:100%hydro:0%nuclear:0%other:0% (1998)
Electricity - consumption:22.17 billion kWh (2007 est)
Electricity - exports:104 million kWh (2007)
Electricity - imports:77 million kWh (2007)
Agriculture - products:wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans, cattle, corn