Libya’s Economic Tangle

Economist Helmi al-Qamati said that rising prices in Libya cannot be explained by speculation alone. They are driven by a combination of the dinar’s fragility, dependence on imports, disruptions to foreign currency and fuel supplies, oil facility closures, weak oversight, and imbalances in public spending. According to published figures, the dollar was approaching 10 dinars on the parallel market, compared with an official rate of around 6.43 dinars. Public spending reached 88.6 billion dinars in the first nine months of 2026, including 60.6 billion for salaries and 1.6 billion for development spending. The foreign-currency flow deficit stood at about $4.7 billion. Al-Qamati warned that the closure of the al-Riyaina pipeline could put around 15,000 barrels a day of supplies to the Zawiya refinery at risk. Repeated disruptions to oil production, he said, harm revenues, confidence, and investment, while fuel and letters-of-credit crises drive up the cost of transport and goods. He stressed that unifying or raising wages requires an assessment of sustainability and fairness across occupations—not simple mathematical equalization or permanent commitments based on volatile oil revenues. He linked recovery to five parallel tracks: safeguarding oil production, unifying public finances, reforming monetary policy, regulating letters of credit, and shifting from a rent-based economy to production—alongside greater transparency and accountability and more efficient public spending.

Size: 120%Text Size

Notice: This Is an AI-Generated Summary

Display The Full Article