The African Development Bank Group has launched its 2024 Country Focus Report (CFR) for Libya, providing a detailed analysis of the country's recent macroeconomic performance and outlook, progress in structural transformation, and financing needs.
Titled Driving Libya's Transformation: The Reform of the Global Financial Architecture, the report outlines short- medium-, and long-term policies to accelerate Libya's economic growth and structural transformation. It also provides the government and potential investors with up-to-date data to inform policy and investment decisions.
Through this report, the African Development Bank aims to support Libya's economic recovery and, together with the country, advocate for a favorable reform of the international financial architecture.
According to the report, the Libyan economy rebounded with a 9.1 percent growth in 2023, driven by the resumption of oil production, following a 3.7 percent decline in 2022. However, the economy is projected to contract by 3.2% in 2024 due to a decline in oil production during the third quarter. Projections for 2025 are more optimistic, with anticipated growth of 6.2%, contingent on stabilizing oil production.
The report highlights that Libya's structural transformation has been weak, with minimal industrialization in non-oil sectors. To accelerate the transformation and catch up with high-performing African countries by 2030, the report recommends Libya close its annual financing gap--estimated at around $37.2 billion--by making immediate investments in infrastructure, energy, education, and productivity improvements in selected value chains.
The African Development Bank reaffirmed its commitment to supporting Libya's structural transformation. "The Bank is dedicated to fostering an enabling environment in Libya for reconstruction and economic diversification. We have been actively supporting the development of effective institutions and infrastructure," said Malinne Blomberg, Deputy Director General for North Africa and the Country Manager for Libya. "Private sector financing will be key, particularly in renewable energy, to drive climate action and green growth in Libya."
Among the report's key recommendations is that Libya should develop a comprehensive national development plan with climate-oriented measures to address the challenges of structural transformation and resilience against climate change impacts. The report also emphasizes the need for Libya to attract greater private sector participation in its economy by creating a more conducive business environment.
Unlocking private sector opportunities will be crucial for promoting economic diversification and creating jobs for citizens. Additionally, implementing appropriate strategies for economic diversification, improving efficiency in government revenue utilization, combating illicit financial flows, and leveraging the country's abundant natural resources will strengthen inclusive and sustainable growth.
The report urges Multilateral Development Banks to review their business models to provide long-term financing support at scale for Libya's reconstruction and structural transformation, while also mobilizing additional funding for climate action to shield the country from external shocks.
To learn more about the Libya report, click here.
