(DW/DPA/SifaNews) The Libyan economy is near collapse due to inflation and lack of oil production, the World Bank said this week in a report titled ‘Libya’s Economic Outlook – October 2016’.
The report suggested that Libya’s lack of exploitation of oil – its main resource – is partially to blame for the country’s economic problems. The North African country is believed to be currently exporting only about 300 000 barrels, just one-fifth of its 1.6 million barrels’ daily production.
“With oil production just a fifth of potential, revenues have plummeted, pushing fiscal and current account deficits to record highs. With the dinar (Libya’s currency) rapidly losing value, inflation has accelerated, further eroding real incomes,” the report said.
Libya, which also faces trade deficit issues, is embroiled in an unprecedented political instability since the overthrow by the West of dictator Moammar Gaddafi five years ago.
Two governments, one in Tripoli and the elected parliament in Tobruk, claim to govern the country. Islamist groups that are also engaged in the war include Islamic State and its affiliates.
This situation has generated serious problems for the middle class, especially those that send money abroad to their relative students. Reports say they appear to have resorted to black markets to counteract the crisis.
“The currency black market is always working, no restrictions and it is possible for you to send any amount, any time, any day but at exorbitant exchange rates,” Deutsche Welle (DW) quoted Maaz Belkheir as saying.
Belkheir is a Libyan finance student at the Near East University in Cyprus.
The report finally suggested that “the country needs humanitarian aid and specific programs to address the destruction and lack of services that a large part of the population faces.”
The European commission, the executive body of the European Union, has invested US$9.6 million in humanitarian aid to Libya since 2014.
Photo: Nelson Mandela with the late Libya dictator M Gaddafi. credit: The Washington Post