The fastest growing economy in the Maghreb may surprise you

For the second year in a row Libya is on the International Monetary Fund’s (IMF) list of the top ten fastest-growing economies in the world. The IMF expects the Libyan economy to grow by 7.8% in 2024, decreasing to 6.9% in 2025.  

So, what’s driving all this? Well very simply – oil. 

The oil economy accounts for around two-thirds of Libya’s GDP, more than 95% of goods exports and around 97% of government revenues. However, rarely a month goes by when there aren’t reports of instability; the potential for further disruption to oil production due to protests or coordinated action by governing authorities in the East or West. Risks to political stability remain high amid UN-backed efforts to form a unified national government and hold elections.  

While foreign operators are returning to Libya, another recent protest highlights how fragile the situation is. Oil distribution valves in Zintan were shut down over the abduction of a general attached to the Central Security Department. Protesters accuse the Tripoli government of Dbeibah and the Presidential Council of being behind the abduction. That would suggest the general abducted is an ally of the Haftar clan and the rival eastern government in Benghazi. Yes, Libya remains complicated, with allies of the Haftar clan, which controls the oil facilities in the country, seen as typically the only forces with the capability of shutting down the flow (while the Tripoli government nominally has controlled the oil revenues through the Central Bank). 

Which brings us to the case of the recent Central Bank governor. Libya’s eastern parliament in late September agreed to appoint Naji Mohamed Issa Belqasem as the new central bank governor after the former governor, Sadiq al-Kabir, was fired by the presidential council in the capital, Tripoli. The decision came as part of a U.N.-facilitated agreement between the parliament and the High Council of State to appoint new leadership for the country’s central bank. During the months that led up to his removal, al-Kabir was criticized by officials from both sides of the North African nation’s political divide over the allocation of Libya’s oil money. This crisis led to a month-long oil shutdown in Libya. 

Libya is certainly in a precarious position, but it somehow manages to maintain its economic growth and offer potential to investors. A country marked by years of political instability and economic chaos — can transform its economy through its vast reserves of critical minerals. While its oil and gas sector has long dominated the economy, mining resources such as iron ore, phosphate, sulphur, gold, magnesium, marble, copper and gypsum offer a strong resource for diversification and robust long-term growth. The country has no significant operations for refining minerals such as iron ore, phosphate, or gypsum, but there is vast opportunity.  

Libya's mining sector is attracting international investors seeking new economic growth opportunities beyond oil. Chinais actively exploring the revival of its economic ties with the country, including potential investments in mining. European and Australian companies have also shown interest in the country's mining potential. The Libyan government’s efforts to attract foreign investment — through establishing special economic zones and new investment laws — have created a more favorable environment. 

So perhaps it is no surprise then that Libya has maintained this position as one of the word’s fastest growing economies- and beyond the headlines – there is room for hope. 

*Kieran Baker is an Emmy award winning journalist who has started up various networks including Al Jazeera English, Bloomberg TV Africa and TRT World.