Despite Libya’s vast oil wealth and periods of strong energy revenues, the country’s economy continues to struggle with structural weaknesses, political division and stalled reforms, according to Libyan economist Wahid Al-Jabou.
Speaking in an interview with Ean Libya, Al-Jabou said the Libyan economy appears stable on the surface but remains vulnerable because of political instability, delayed economic reforms and weak governance.
He identified corruption, foreign interference and what he described as poorly designed economic policies as some of the main reasons behind Libya’s current economic difficulties. According to Al-Jabou, years of rushed decisions and ineffective planning have created deep-rooted problems that continue to burden the economy.
The economist argued that meaningful reform cannot succeed without political stability, credible elections and institutions capable of implementing long-term policies. He added that tackling financial and administrative corruption remains essential for any recovery strategy.
Al-Jabou warned that the Libyan dinar continues to face pressure because demand for foreign currency significantly exceeds supply. Libya imports more than 90 percent of its needs using hard currency, while domestic production remains limited.
Although the Central Bank of Libya has introduced monetary measures to ease pressure on the exchange rate, Al-Jabou stressed that the institution cannot solve problems related to fiscal policy or corruption, which fall outside its mandate.
He noted that public spending has reached unsustainable levels and is increasingly focused on consumption rather than development and investment.
One of Al-Jabou’s strongest criticisms targeted Libya’s oversized public sector. He estimated that more than 2.5 million people are registered as state employees, describing the figure as a major burden on public finances.
According to him, many workers entered the public sector believing employment represented a share of the country’s oil wealth rather than a productive role within the economy.
“The public job has gradually turned into a mechanism for distributing income rather than creating value,” Al-Jabou said, arguing that large numbers of employees receive salaries despite contributing little or no economic output.
He described this phenomenon as hidden unemployment and said it has become one of Libya’s biggest economic distortions.
Al-Jabou called for the reopening of factories, investment in agriculture and tourism and the transfer of hundreds of thousands of workers into productive sectors capable of generating growth.
He concluded that Libya’s recovery depends on fighting corruption, improving governance and building a diversified economy that no longer relies almost entirely on oil revenues.
