Trade has played a significant role in Libya’s economy since the early 2000s, although it faced significant challenges due to economic and trade sanctions imposed by Western governments prior to the revolution. The outbreak of the civil war in 2011 had a detrimental impact on economic growth. However, in recent years there has been a modest resurgence in trade, particularly as stability has improved.
Libya is a member of several international organisations, including the Arab Monetary Fund, the Council of Arab Economic Unity, the Islamic Development Bank, the Organisation of the Petroleum Exporting Countries and the Arab Maghreb Union. Furthermore, the country actively participates in the Greater Arab Free Trade Area, an agreement established by the Arab League in January 2005 to forge a free trade zone among Arab countries.
Libya was the 87th-largest economy in 2021 based on GDP, and occupied the 67th position for total exports, 84th for total imports, 91st for GDP per capita and 114th in economic complexity, as measured by the Economic Complexity Index. The country’s primary exports are crude petroleum ($27bn), petroleum gas ($1.9bn), refined petroleum ($592m), scrap iron ($336m) and gold ($236m). The top markets for these products are Italy ($7.5bn), Germany ($3.3bn), Spain ($3.1bn), China ($2.8bn) and France ($1.9bn). Libya’s commodities imports include refined petroleum ($3.7bn), rolled tobacco ($636m), broadcasting equipment ($590m), cars ($579m) and jewellery ($424m). The primary source markets are Turkey ($2.8bn), Greece ($2.4bn), China ($2.1bn), the UAE ($1.7bn) and Italy ($1.4bn).
Misrata’s transit trade endeavours align with Libya’s longstanding objective of diversifying its economy away from hydrocarbons. Transit trade to the Maghreb, North Africa, the Middle East, sub-Saharan Africa and the Mediterranean region assumes a pivotal role in this diversification strategy.
In June 2021 the Misurata Free Zone (MFZ) embarked on land transit trade, welcoming its first convoy of trucks laden with goods from the Libyan-Tunisian border at Ras Ajdir. While the specific nature of the goods transported was not disclosed, they were destined for Rouge Supply and Export, the MFZ’s first licensed foreign company for transit trade.
Although trade is improving, business leaders highlight the difficulties of finding foreign customers for their exports due to the bureaucratic and regulatory constraints in recipient countries. These challenges stem from regulatory hurdles and perception issues regarding Libya. Resolving the country’s political divisions could enable more coherent and effective trade negotiations on behalf of local businesses.
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