Libya's economy is grappling with severe challenges and mounting losses, underscored by recent reports highlighting staggering figures and growing reliance on imports. According to Deputy Prime Minister and Health Minister Ramadan Abu Janah, the country's annual medicine import bill has surged to between $4 to $5 billion for 2024, up from $3 billion last year. This alarming increase signals Libya's increasing dependence on foreign pharmaceutical products to meet domestic health needs, including cancer treatments.
Speaking at a conference hosted by Egyptian pharmaceutical company Eva Pharma, Abu Janah noted the issue of underutilized local pharmaceutical factories, attributing this to years of political and economic instability. 'Egypt’s progress in localizing its pharmaceutical industry is pivotal for the Arab world and Africa, especially after COVID-19 exposed the need for self-sufficient supply chains,' he stated.
To mitigate these challenges, Libya is forging stronger ties with Egypt, aiming to facilitate registration of Egyptian-made drugs with Libya’s Ministry of Health to streamline future imports. Abu Janah has extended invitations for Egyptian pharmaceutical companies to establish manufacturing facilities within Libya, fostering bilateral cooperation. Plans are also underway to explore joint ventures with Egyptian firms to export pharmaceuticals to West African markets.
Economic challenges are not limited to healthcare alone. A recent World Bank report revealed staggering economic losses of approximately $600 billion over the past decade, as calculated at 2015 constant values. These figures starkly reflect the devastating impact of prolonged conflict and political instability on Libya’s economic potential.
The report detailed how, without these disruptions, Libya could have seen a 74% increase in local production by 2023. Despite this bleak picture, it offered cautious optimism for the future of the Libyan oil sector. The report forecasted recovery with oil production expected to rise to 1.2 million barrels per day by 2025, reaching 1.3 million barrels per day by 2026. Such recovery is projected to spur significant GDP growth, estimated at 9.6% for 2025 and 8.4% for 2026.
While the oil sector shows promise, the non-oil economy is also anticipated to experience substantial growth, with expected rates hovering around 9% during 2025–2026. The World Bank's projections include anticipated surpluses of 1.7% and 1.4% of GDP for public finances and external balances, respectively. These improvements may result from reduced public spending and lower imports, notwithstanding expected declines in oil revenues for 2024.
Libya has been classified as a middle-income country, with a Gross National Income (GNI) per capita reported at $7,570 for 2023. The World Bank emphasized Libya's potential to generate high-value job opportunities and bolster development indicators, yet achieving these goals mandates considerable reforms and investments to stabilize the economy and reconstruct governance structures.
A pivotal recommendation from the World Bank calls for prioritizing diversification from oil revenues, advocating for private sector-led growth. By addressing systemic governance challenges and fostering entrepreneurial ventures, Libya might forge a more sustainable development pathway and achieve long-term economic resilience.
Crucially, as Libya navigates these economic hurdles, the strategy to reduce reliance on oil, improve local production capabilities, and build healthcare infrastructures remains fundamental. The proposed collaboration with Egypt, particularly concerning pharmaceuticals and infrastructure development, reflects Libya's commitment to overcoming economic challenges and rebuilding its economic framework. With thoughtful policy shifts and strategic partnerships, the country aspires to revitalize its economy and improve the well-being of its citizens.
