Economy
The Libyan economy depends primarily upon revenues from the oil sector, which account for over half of GDP and 97% of exports. Libya holds the largest proven oil reserves in Africa and is an important contributor to the global supply of light, sweet crude. During 2010, when oil averaged at $80 a barrel, oil production accounted for 54% of GDP. Apart from petroleum, the other natural resources are natural gas and gypsum. The International Monetary Fund estimated Libya's real GDP growth at 122% in 2012 and 16.7% in 2013, after a 60% plunge in 2011.
In 2023 Libya emitted around 23.77 million tonnes of greenhouse gases, about 0.17% of the world's total emissions. However, the nation ranked as the 21st highest emitter per capita globally and the highest in Africa, at just over 13 tonnes per person. Libya was slow to join climate efforts, signing the United Nations Framework Convention on Climate Change (UNFCCC) in 2016 and the Paris Climate Agreement in 2021. However, as of 2024, Libya has not ratified the Paris Agreement and submitted its Nationally Determined Contributions (NDCs), and has made little progress toward the development of climate change adaptation plans.
The World Bank defines Libya as an 'Upper Middle Income Economy', along with only seven other African countries. Substantial revenues from the energy sector, coupled with a small population, give Libya one of the highest per capita GDPs in Africa. Although the government supported Arab causes, including the Moroccan and Algerian independence movements, it took little active part in the Arab–Israeli conflict or the tumultuous inter-Arab politics of the 1950s and early 1960s. The kingdom was noted for its close association with the West, while it steered a conservative course at home. This allowed the Libyan Arab Jamahiriya state to provide an extensive level of social security, particularly in the fields of housing and education.
Libya faces many structural problems including a lack of institutions, weak governance, and chronic structural unemployment. The economy displays a lack of economic diversification and significant reliance on immigrant labour. Libya has traditionally relied on unsustainably high levels of public sector hiring to create employment. In the mid-2000s, the government employed about 70% of all national employees.
Unemployment rose from 8% in 2008 to 21% in 2009, according to the census figures. According to an Arab League report, based on data from 2010, unemployment for women stands at 18% while for the figure for men is 21%, making Libya the only Arab country where there are more unemployed men than women. Libya has high levels of social inequality, high rates of youth unemployment and regional economic disparities. Water supply is also a problem, with some 28% of the population not having access to safe drinking water in 2000.
Two trans-African automobile routes pass through Libya, the Cairo–Dakar Highway and Tripoli–Cape Town Highway. These routes have further contributed in the economic development of Libya.
Libya imports up to 90% of its cereal consumption requirements, and imports of wheat in 2012/13 was estimated at 1 million tonnes. The 2012 wheat production was estimated at 200,000 tonnes. The government hopes to increase food production to 800,000 tonnes of cereals by 2020. However, natural and environmental conditions limit Libya's agricultural production potential. Before 1958, agriculture was the country's main source of revenue, making up about 30% of GDP. With the discovery of oil in 1958, the size of the agriculture sector declined rapidly, accounting for less than 5% GDP by 2005.
The country joined the OPEC cartel in 1962. Libya is not a WTO member, but negotiations for its accession started in 2004. In the early 1980s, Libya was one of the wealthiest countries in the world; its GDP per capita was higher than some developed countries.
UN sanctions were lifted in September 2003, and Libya announced in December 2003 that it would abandon programs to build weapons of mass destruction. Other steps have included applying for membership of the World Trade Organization, reducing subsidies, and announcing plans for privatisation.
Authorities privatised more than 100 government-owned companies after 2003 in industries including oil refining, tourism and real estate, of which 29 were 100% foreign owned. Many international oil companies returned to the country, including oil giants Shell and ExxonMobil. After sanctions were lifted there was a gradual increase of air traffic, and by 2005 there were 1.5 million yearly air travellers. Libya had long been a notoriously difficult country for Western tourists to visit due to stringent visa requirements.
In 2007, Saif al-Islam Gaddafi, the second-eldest son of Muammar Gaddafi, was involved in a green development project called the Green Mountain Sustainable Development Area, which sought to bring tourism to Cyrene and to preserve Greek ruins in the area. In August 2011, it was estimated that it would take at least 10 years to rebuild Libya's infrastructure. Even before the 2011 war, Libya's infrastructure was in a poor state due to "utter neglect" by Gaddafi's administration, according to the NTC. By October 2012, the economy had recovered from the 2011 conflict, with oil production returning to near normal levels. Oil production was more than 1.6 million barrels per day before the war. By October 2012, the average oil production has surpassed 1.4 million bpd. The resumption of production was made possible due to the quick return of major Western companies, like TotalEnergies, Eni, Repsol, Wintershall and Occidental. In 2016, an announcement from the company said the company aims 900,000 barrel per day in the next year. Oil production has fallen from 1.6 million barrel per day to 900,000 in four years of war.
The Great Man-Made River is the world's largest irrigation project. The project utilises a pipeline system that pumps fossil water from the Nubian Sandstone Aquifer System from down south in Libya to cities in the populous Libyan northern Mediterranean coast including Tripoli and Benghazi. The water provides 70% of all freshwater used in Libya. During the second Libyan civil war, lasting from 2014 to 2020, the water infrastructure suffered neglect and occasional breakdowns. By 2017, 60% of the Libyan population were malnourished. Since then, 1.3 million people are waiting for emergency humanitarian aid, out of a total population of 7.1 million.
As of March 2024, Libya was actively promoting business development and encouraging both domestic and foreign investment. This strategic initiative is aimed at securing long-term economic stability and prosperity for Libya by diversifying its economic foundation. Embracing green industries like renewable energy, energy efficiency, sustainable agriculture, and eco-tourism holds the potential to generate fresh employment prospects across a spectrum of sectors, thereby addressing unemployment challenges, particularly among the youth demographic.