With the development and exploitation of the rich oil deposits (since 1959) Libya developed into one of the most important oil exporting countries. In 2013, the OPEC member was the fourth largest oil producer in Africa after Nigeria, Angola and Algeria. The gross national income (GNI) per resident was (2009) 12,930 US $. This made Libya one of the richest countries on the continent until the economic collapse as a result of the civil war in 2011. With the outbreak of the civil war in the spring of 2011, however, economic activities largely came to a standstill; the infrastructure was partially destroyed. The slump in gross domestic product (GDP) was 62.1% in 2011.
Due to political instability, corruption, capital flight and fluctuations in the oil price on the world market, the economic situation is still extremely tense. The GNI per resident for 2017 is given as US $ 6,540; the unemployment rate (2016) is 20.6% and inflation is 27.1%.
Foreign trade: Libya has had a positive trade balance for more than 25 years (2016: imports US $ 9.6 billion, exports US $ 11.5 billion). Mainly industrial goods (machines and equipment), consumer goods and food are imported. When it comes to exports, the share of petroleum and petroleum products is 99%. The most important trading partners are the EU countries and China.
Around 3% of the workforce worked in agriculture in 2015; they generated 1-2% of GDP. The agricultural area (almost 9% of the country’s area) in the coastal regions of Tripolitania and Cyrenaica as well as the oases has more than tripled due to ambitious development projects since 1970 and consists of arable land (about 1%), permanent crops (especially olive, date and and almond trees) and pastureland. The main crops are cereals, tomatoes, peanuts, soybeans, melons, olives, potatoes, citrus fruits and dates. Although considerable increases have now been achieved in some crops (wheat, tomatoes), Libya is still dependent on extensive food imports from Europe.
Great efforts to expand the cultivated land were made especially in the oases of the Sahara (including Mursuk and Sebha in Fessan, Kufra in the Libyan desert). More than 20,000 hectares of new land have been reclaimed here (irrigation systems are often used that are fed with fossil water from a depth of 400–1,500 m). A modern oasis economy emerged with agricultural cooperatives. In many cases, the excessive use of existing groundwater stocks has led to the subsidence of the aquifers. Nevertheless, with the project »Large Artificial River« (construction started in 1984; commissioning of the first sub-network and start of water delivery in 1991) fossil water is piped from the southeast into the reservoir near Adjedabia via a 3,000 km pipeline and from there distributed in the coastal region. namely to supply the population and industry as well as to irrigate 180,000 hectares of agricultural land, especially for the cultivation of grain.3 water per day (2017: 2.5 million m 3). Scientists are warning of an ecological catastrophe for the oases in the southeast (Tazarbu, Kufra), as the fossil water is not renewed.
Forestry: The forest area covers only 0.1% of the country’s area; afforestation with eucalyptus trees, cypresses and acacias is difficult because of the climatic conditions, but has already achieved some success in the Achdar mountainous region. The annual logging is (2015) 1.1 million m 3; it is mainly used as firewood.
Fishing: Despite coastal waters rich in fish, fishing is not of great economic importance; the catch is (2015) 26,000 t. Reasons for this are, in addition to the outdated fishing fleet, an underdeveloped infrastructure and insufficient processing capacities.
Production and export of oil and natural gas dominate the Libyan economy. The national interests in the oil industry were taken over in 1970 by the National Oil Corporation, which initially granted licenses, but since 1973 has become the majority shareholder in all the important oil companies in Libya. Almost 95% of the country’s foreign exchange income and over two-thirds of GDP and 99% of export earnings are generated by the oil industry. The secured reserves are estimated at 6.3 billion t; the annual output is (2017) 40.8 million t. The largest deposits are located southeast of the Great Syrte. The Buri offshore field, 120 km northwest of Tripoli, is the largest in the Mediterranean to date. Natural gas is extracted as a by-product of oil production and is exported to Italy and Spain, mainly in liquefied form. Pipelines lead from the oil fields to the oil export ports on the Great Syrte. Since 2005, natural gas has been exported from the Libyan coast to Sicily (Italy) via an underwater pipeline. In addition to crude oil and natural gas, potash and rock salt as well as lime and gypsum are extracted.
According to sourcemakeup, around 15% of those in employment work in manufacturing and construction; in 2015 they generated 4.7% of the gross domestic product. The most important industries are metal production and processing, the food, textile and building materials industries. The centers of the petrochemical industry are Marsa el-Brega, Ras Lanuf and Abu Kammash.
With the outbreak of the civil war, international tourism – which had hardly developed until then – came to a complete standstill. The Mediterranean coast, the capital Tripoli, the ruins of Sabratha, Leptis Magna and Cyrene offer potential for tourism. Oasis and desert tourism is also becoming more and more attractive for visitors.
Since gaining independence, the transport infrastructure has been steadily expanded and modernized at great expense. Nevertheless, there are only satisfactory connections in the coastal area and in the economically developed regions. The main artery of the road network (about 75,000 km in total) is the 1,822 km long coastal road from Tripoli to Benghazi. Access roads lead to the oases and oil production sites. Highways were planned to the Republic of Niger and Chad as well as in an east-west direction to Egypt and Tunisia (laying of the foundation stone in 2009; work has been suspended since 2011). The 1965 discontinued rail traffic in Libya should be resumed; however, it has not yet been possible to start realizing the project due to a lack of capital. Tripoli, Benghazi, Along with the oil ports on the Great Syrte, Misurata and Tobruk are the most important port cities. There are international airports in Tripoli, Benghazi, Sebha and in Ben Gashir (near Tripoli).