Libya's Oil Wealth and Economic Challenges
The article includes statements from Libyan Minister of Economy and Commerce, Sohail Boshayha, regarding the economic challenges facing the country despite significant increases in oil production. The minister confirmed that the production rate has risen from about 900-950 thousand barrels per day to approximately 1.4 million barrels, noting that the substantial economic growth over recent years has primarily been tied to the increase in oil and gas production, while the growth of other sectors has remained limited. He pointed out that reliance on oil remains fundamental, and that increased production has heightened demand for financing and financial measures, which necessitates changing the current economic model that focuses on supporting consumer demand into a model that more strongly supports production and the citizens. He considered that the current economic model produces a conflict between socialist and capitalist ideas and noted that economic indicators do not reflect the living reality of citizens, especially regarding purchasing power and exchange rates. He also discussed the costs of the electricity sector, which amount to around $14 billion, despite the expected economic returns exceeding $25-30 billion, emphasizing that money entering the economy without added value harms the national economy. Furthermore, he pointed out that the currency exchange crisis is linked to financial obligations accumulated since 2014 and stressed the need to unify the financial system. He mentioned that Libya has other resources beyond oil, such as solar energy and minerals, which can contribute to economic diversification. Boshayha proposed diversifying and more efficiently allocating hydrocarbon resources, dedicating around 65% of their revenues to the general treasury. He believed that the problem is not a lack of resources but how to transform them into sustainable wealth through economic reform, with a focus on supporting production, enhancing purchasing power, and fostering investments that generate real value for citizens.
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