Economy of Libya

The Libyan economy depends on sovereign revenue from the sale of crude oil as the export of the Libyan oil started in 1961. the country's oil exports have risen rapidly during the era of the sixties until it reached more than 3 million barrels per day in 1969, which made Libya one of the largest Member of the Petroleum Exporting Countries at that time, but the capacity of oil Libya reduced because of a lack of investment that resulted in reducing the productive capacities of Libya significantly. The crude oil of Libya gained attention because of its high quality and the location of Libya near to Europe, therefore, in recent years, this sector attracted in a remarkable investment, advanced technology and huge foreign capitals which led to the increase in production to 1.65 million barrels per day in 2010. The country's reserves gone up to 41.5 billion barrels, and thus the State of Libya occupied ranked third in terms of oil reserves in the African countries after Angola and Nigeria. It occupied twelfth rank in the world in terms of oil export. Libya has huge reserves of oil and gas. It also has great potential to increase production of oil and natural gas in the future. Considering the low domestic demand of oil consumption, there is great potential to increase the export of fuel in the future. The discovered reserves of Libya amount to 46.4 billion barrels of crude oil and 54.7 trillion cubic feet of natural gas. The estimate points out to the prospects of increasing the reserves  significantly through enhancing the level of expertise and knowledge in the field of exploration and field development. Libya relies on oil export revenues amounting to 95% of the total cash revenues which accounts for 80% of government resources.

Non-oil economic sectors expanded in Libya which represent more than 20% of the total GDP only agricultural crop outcomes including industries of petrochemicals, iron, steel and aluminum. The climatic conditions , poor soil and water shortage limits crop production in Libya so Libya imports about 75% of its food requirements from abroad. The Libyan market is distinguished as relatively active consumer market. The purchasing power of its people is high in comparison to the neighboring markets. It is also distinguished for its close location of supply sources from a number of Arab, European and African countries which make an open competition for goods and industrial products. The Industry sector occupies third place in terms of economic importance. There are local industries for local consumption such as iron – cement – building material – urea – petrochemical industries etc.

As for the financial markets are concerned, a determined efforts are going on at present for re-structure and modernize the Libyan financial sector. However, the role of the financial markets and capital markets of the Libyan economy is very limited. So far, there is no public of private debt markets.

Libya’s foreign account surplus has reached up to 20% of GDP in 2010 as the net foreign assets of the Central Bank of Libya and Libyan Investment Body (Sovereign Wealth Fund) is estimated about US $ 150 billion as per the estimates of the year 2010 which represents 160% of the DDP.

There are extensive plans to modify the role of the private sector in Libya, especially the banks, manufacturing operational process, mobile companies sectors. 

 


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