Economic Structure Of Libya

The Libyan economy depends primarily upon revenues from the oil sector, which contribute about 95 percent of export earnings, 25 percent of GDP, and 80 percent of government revenue.

The 2009 drop in oil prices reduced Libyan government tax income and constrained economic growth. Revenues from the energy sector coupled with a small population give Libya one of the highest per capita GDPs in Africa.

The Libyan economy depends primarily upon revenues from the oil sector, which contribute about 95 percent of export earnings, 25 percent of GDP, and 80 percent of government revenue.

The 2009 drop in oil prices reduced Libyan government tax income and constrained economic growth. Revenues from the energy sector coupled with a small population give Libya one of the highest per capita GDPs in Africa.

In 2003 UN sanctions lifted following Libya’s announcement and pledge to abandon programs to build weapons of mass destruction lead to improvements in the economy, helping Libya attract greater foreign direct investment, especially in the energy sector.

All that has changed in 2011, as Colonel Gaddafi and his regime has progressively faced down revolt in many key towns outside Tripoli, followed by stiff sanctions and arial bombardment from a UN-backed coalition, which are likely to severely impact the Libyan economy in the short term.

The Structure of the Libyan Economy

As of 2010, agriculture constituted 4.2% of the Libyan economy, 60.7% was industrial, and 35.1% was services.

Both industries and services therefore play an important role in Libya’s economy. Although Libya is vast, apart from a small arable strip by the coast most of the country is desert, sparsely populated with bedouin and berber tribes.

As we have seen before, the oil industry and its support functions form the backbone of the economy.

After from energy, other important industries of the country are steel, textile, food and cement.

Major agricultural products of the country are wheat, peanuts, barley, soybeans, and cattle. 

Libyan Foreign Trade

Oil and gas are 95% of export eanrings, with Europe being the primary recepients of, primarily Italy (its former coloniel power, currently connected by the Greenstream Natural Gas Pipeline), Spain, Germany, and France.

It imports from the countries such as South Korea, Germany, UK and Italy. It imports consumer goods and machines.

In 1958, Libya joined the World Bank. Since then the bank has undertaken many steps for reducing inefficiency and fostering economic growth in the country.

Libya Economy Statistics and Indicators at a Glance:

Industries: petroleum, petrochemicals, aluminum, iron and steel, food processing, textiles, handicrafts, cement
Industrial production growth rate: 2.7% (2010 estimate)
Agriculture – products: wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans; cattle
Oil – exports: 1.542 million bbl/day (around 2% of world trade, reduced by two thirds during hostilities in 2011)
Oil – imports: 575 bbl/day

Libya’s Economic Geography

Around 90% of Libya is made up of desert. There is a coastal strip that borders the Mediterranean, on which some farming is possible. It produces wheat, barley, olives, dates, citrus, vegetables, peanuts and soybeans. Cattle is also popular here.

Land boundaries: total: 4,348 km border countries: Algeria 982 km, Chad 1,055 km, Egypt 1,115 km, Niger 354 km, Sudan 383 km, Tunisia 459 km

Coastline: 1,770 km

Maritime claims: territorial sea: 12 nm

Libya has the world’s 9th largest proven reserves of oil (and the largest in Africa). It also has the world’s 27th largest natural gas reserves.

Libya Population and Workforce

The Libyan population is 6.459 million, growing at 2.172% a year.

Liya has a labor force of 1.686 million (2009 estimate), with 59% occupied in the services, 23% in industry and 17% in agriculture. The unemployment rate is between 20% and 30%.