See also:
27.02.2013 - Libya "could produce more solar power than oil"
18.12.2008 - Africa commits to water development to fight hunger
15.12.2008 - Africa summit discuss massive hydro scheme for food and energy security
24.06.2008 - Libya seals 30 year deal on oil exploration
03.01.2007 - New gas discovery announced in Libya
09.11.2005 - New oil discoveries in Libya
31.05.2005 - France, Libya launch nuclear cooperation
26.03.2004 - Shell secures Libya deal during Blair's visit











buy from China
Libya
Economy - Development

Non-oil sector finally drives growth in Libya

afrol News, 11 April - Since the lifting in 2003-04 of international sanctions, Libya has experienced a strong economic growth, mostly driven by high oil prices and investments in that run-down sector. In 2005, however, economic reforms and trade liberalisation has finally lifted Libya's under-developed non-oil sector to become the motor of economic growth. This comes despite the still persistent limits to foreign investments.

The International Monetary Fund (IMF) yesterday published its conclusions from its annual economic consultations with the Tripoli government - the third ever IMF report on Libya's economic situation. The report is an account of fast and deep-ploughing macroeconomic reforms towards a market economy since 2003, followed by very positive economic results.

Libya's real GDP started growing rapidly as soon as sanctions against the Ghaddafi regime were lifted, new statistics revealed by the IMF show. In particular 2003 saw a tremendous GDP growth with 9.1 percent, almost exclusively driven by the oil sector. This coincided with the year that Europeans were let to invest in Libya's oil sector, which had suffered from the ten-year sanctions regime.

In 2004, Libya's GDP growth slowed somewhat but was still "satisfactory", according to the IMF assessment. Growth was mainly owed to higher oil prices - increasing by 31 percent - and an increased oil output, by 5.6 percent. IMF statistics show that real GDP grew 4 percent in 2004, while consumer prices declined by 2.2 percent, driven by an ease on import restrictions and tariffs.

While the non-oil sector had only grown by 2.2 percent in 2003, it almost caught up with the oil sector in 2004, growing by 4.1 percent. The 2004 growth in the non-oil sector however mainly was contributed to the implementation of a number of public projects, according to the IMF.

Only last year, preliminary data from Libyan authorities showed, the non-oil sector grew into the motor of the national growth. With an estimated total real GDP growth of 3.5 percent in 2005, the non-oil sector had contributed to most of the growth. The non-oil economy generated a growth rate of 4.6 percent while activity in the oil sector grew only 1 percent, "due to output capacity constraints," according to the IMF.

Also in 2005, the pick-up in activity in Libya's non-oil sector was essentially the result of the increase in government spending. The main sectors that registered strong growth include trade, hotels, and transportation - up 7 percent - and construction and services, growing by 5 percent. Gains in agriculture had remained modest at 2.5 percent, but the manufacturing sector registered its first positive growth in five years, going up by 1.8 percent.

The growth in Libya's non-oil sector comes despite the many structural limitations to investments. Libyan authorities still operate with a US$ 50 million floor on foreign investment in the country, which according to the IMF "de facto disqualifies most foreign investments in the non-oil sector."

As a relict from the tight state control on the economy and scepticism towards foreign economic activities in Libya, authorities still operate with a list of sub-sectors where foreign investors are allowed to engage. While this list has been strongly amplified during the last few years, the IMF yesterday urged authorities to "replace the current positive list with a clear and streamlined negative list" - meaning a list that defines sectors where foreign investments are barred.

The IMF report further praises Libyan authorities for its rapid speed of economic policy reforms and trade liberalisation, despite Tripoli's "severe human resource constraints and weak institutions." Reforms during the last two years in particular had streamlined import taxes, cut trade barriers, facilitated foreign investments, liberalised the financial market and initiated privatisation programmes.

Despite these moves towards an open market economy, the Libyan economy still was largely state controlled and poorly diversified, the IMF report noted. Three quarters of employment in the country of 5.67 million inhabitants is still in the public sector and private investment is minuscule, reaching only 2 percent of GDP, according to newest statistics. The oil sector remains totally dominant.



- Create an e-mail alert for Libya news
- Create an e-mail alert for Economy - Development news


 
    Printable version


On the Afrol News front page now

Rwanda
Rwanda succeeds including citizens in formal financial sector

afrol News - It is called "financial inclusion", and it is a key government policy in Rwanda. The goal is that, by 2020, 90 percent of the population is to have and actively use bank accounts. And in only four years, financial inclusion has doubled in Rwanda.
South Sudan | Sudan
Famine warning: "South Sudan is imploding"

afrol News - The UN's humanitarian agencies now warn about a devastating famine in Sudan and especially in South Sudan, where the situation is said to be "imploding". Relief officials are appealing to donors to urgently fund life-saving activities in the two countries.
Guinea
Panic in West Africa after Ebola outbreak in Guinea

afrol News - Fear is spreading all over West Africa after the health ministry in Guinea confirmed the first Ebola outbreak in this part of Africa. According to official numbers, at least 86 are infected and 59 are dead as a result of this very contagious disease.
Ethiopia
Ethiopia tightens its already strict anti-gay laws

afrol News - It is already a crime being homosexual in Ethiopia, but parliament is now making sure the anti-gay laws will be applied in practical life. No pardoning of gays will be allowed in future, but activist fear this only is a signal of further repression being prepared.
Ethiopia
Ethiopia plans Africa's biggest dam

afrol News / Africa Renewal - Ethiopia's ambitious plan to build a US$ 4.2 billion dam in the Benishangul-Gumuz region, 40 km from its border with Sudan, is expected to provide 6,000 megawatts of electricity, enough for its population plus some excess it can sell to neighbouring countries.



front page | news | countries | archive | currencies | news alerts login | about afrol News | contact | advertise | español 

©  afrol News. Reproducing or buying afrol News' articles.

   You can contact us at mail@afrol.com