Libya: what oil dependence is really costing the economy

Despite its vast land, strategic position, and wealth of natural and agricultural resources, Libya continues to face major obstacles in developing and expanding its non‑oil exports, according to the Libya Review on February 7th.

For decades, the country has depended almost completely on oil and gas revenues, facilitating a weak economic model with little diversification, reportedly leaving the economy highly vulnerable to external shocks.

Recently figures have presented a certain imbalance. Oil and gas make up approximately 94 percent of Libya’s total exports, while non‑oil exports remain below one billion dollars a year. Even within that limited share, iron and steel products reportedly dominate, leaving other potentially competitive sectors mostly undeveloped.

This situation has persisted despite Libya’s long Mediterranean coastline, fertile agricultural regions, and its ability to produce competitive goods such as dates and olive oil.

Local producers and industrial operators have raised concerns over structural obstacles, while administrative bureaucracy, slow banking processes, and cumbersome customs regulations routinely delay production and export operations for weeks.

Manufacturers have reported persistent difficulties accessing foreign currency, irregular shipping schedules, and inefficient logistical support, all of which drive up costs and erode competitiveness.

Institutional weaknesses have reportedly compounded these challenges. Libya still does not have a comprehensive national strategy for export development, marketing, and industrial promotion. Although official bodies acknowledge these gaps and have introduced corrective strategies, the progress is reportedly not fast enough.

Political instability has also reportedly been a major factor. Ongoing division and a lack of strong governance has discouraged long‑term investment and hindered the prospect of sustained economic reforms.

Economic experts argue that reversing this trajectory requires a fundamental policy shift. Strengthening local production, streamlining procedures, improving infrastructure, and supporting exporters through incentives and expanded market access are viewed by some analysts, as essential steps.

Libya Review and agencies, Maghrebi.org