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COUNTRY REPORT - LIBYA
ECONOMIC OVERVIEW & TECHNICAL REGULATIONS FOR IMPORTS
EIP/MTR/074/07/2015
(MARKET REPORT)
Export Initiatives & Partnerships Division,
Phone: +9714-4455333; Fax: +9714-4455355
E-mail: [email protected]; Web: www.dedc.gov.ae
PO Box 123336, Dubai – UAE
Primary Information Sources:
Prepared – July, 2015
Disclaimer: While all attempts have been made to collect & present accurate information, DE makes no warranty, express or implied, as to the fitness,
appropriateness of the above information for a particular purpose, or assumes any legal liability for the accuracy or usefulness of any contained information.
TABLE OF CONTENTS
#
Description
Page
1
Libya Economic Overview (CIA Factbook, ITC)
3
2
Libya Economic Outlook (African Economic Outlook)
4
3
Economic Freedom – Heritage.org
18
4
Doing Business In Libya (World Bank)
20
5
Conformity Assurance for Export of Products to Libya
(Intertek)
25
Libya Economic Overview, June, 2015
Libya's economy is structured primarily around the nation's energy sector, which generates about 95% of
export earnings, 80% of GDP, and 99% of government income. Substantial revenue from the energy sector
coupled with a small population give Libya one of the highest per capita GDPs in Africa, but Tripoli largely
has not used its significant financial resources to develop national infrastructure or the economy, leaving
many citizens poor. In the final five years of QADHAFI's rule, Libya made some progress on economic reform
as part of a broader campaign to reintegrate the country into the international fold. This effort picked up
steam after UN sanctions were lifted in September 2003 and after Libya announced in December 2003 that
it would abandon programs to build weapons of mass destruction. The process of lifting US unilateral
sanctions began in the spring of 2004; all sanctions were removed by June 2006, helping Libya attract
greater foreign direct investment, especially in the energy and banking sectors. Libyan oil and gas licensing
rounds drew high international interest, but new rounds are unlikely to be successful until Libya establishes
a more permanent government and is able to offer more attractive financial terms on contracts and increase
security. Libya faces a long road ahead in liberalizing its primarily socialist economy, but the revolution has
unleashed previously restrained entrepreneurial activity and increased the potential for the evolution of a
more market-based economy. The service and construction sectors expanded over the past five years and
could become a larger share of GDP if Tripoli prioritizes capital spending on development projects once
political and security uncertainty subside. Climatic conditions and poor soils severely limit agricultural output,
and Libya imports about 80% of its food. Libya's primary agricultural water source is the Great Manmade
River Project.
Source: Index mundi/CIA Factbook
The last part of this report indicates the recent requirements of Libya in terms of product inspection, testing
and certification. Information provided herein has been provided by our Strategic Partner M/s Intertek,
contact details as below:
Office Address Intertek International Ltd, Government and Trade Services - Middle East, 14F Millennium
Plaza Tower, Sheikh Zayed Road P.O. Box 26290, Dubai, U.A.E.
Contact:
Husny Saeed /Rodney Wilkins
Telephone:
+971 4 317 8777
Fax:
+971 4 331 6883
Email:
[email protected]
Exports:
Value: US$ 20.192 Billion (2014)
Main Products: Mineral fuels, oils, Iron & Steel, Precious metals, Chemicals, Copper and Fertilizers.
Major Partners: Italy, France, Germany, Netherlands, Spain
Imports:
Value: US$ 16.286 Billion (2014)
Main Products: Mineral fuels & Oils, Machinery, Electrical, electronic equipment, Vehicles, Cereals, Plastics
& Articles
Major Partners: Italy, China, Turkey, Egypt, Korea, Spain
Source: ITC (TradeMap)
LIBYA
2015
Samia MANSOUR / [email protected]
Economist, Regional Department for North Africa, AfDB
Sahar RAD / [email protected]
Former Country Economist for Libya, AfDB
www.africaneconomicoutlook.org
Libya
LIBYA
• Oil production fell during the first half of 2014 and GDP declined by 19.8%, but
production levels began to recover during the third quarter of 2014, so GDP is expected
to rebound by 14.5% in 2015, if agreement is achieved to open some of the major oil
terminals.
• Political and economic governance have collapsed, with the presence of two rival
parliaments and continued control of oil resources by warring militias.
• Spatial disparities were at the heart of the instabilities that have surfaced since 2011
and an inclusive spatial strategy will be an important determinant of any democratic
transition.
Overview
During the first half of 2014, mounting protests at major oilfields and export terminals led
to a decline in production levels to as low as 155 000 barrels per day (bpd) by May 2014. Since
hydrocarbons sales constitute over 95% of national revenues – and this decline in production is
well below the country’s long-term average of 1.6 million bpd – there is considerable pressure to
negotiate with militias controlling the main oil terminals. After an agreement to open some of
the major terminals, official production started to recover from the third quarter of 2014, reaching
800 000 bpd in October 2014. However, fighting has closed the two largest ports, Es Sider and Ras
Lanuf, while the western ports of Zawiya and Mellitah have also halted oil exports.
Fiscal sustainability continues to be in disarray because control over the major source of
revenue has fallen out of official control. The combination of lower petroleum exports and the
dramatic fall in the price of oil resulted in revenues down by 63% in 2014 (from a budget of
57 billion Libyan dinars (LYD) in 2013 to LYD 20.9 billion in 2014). The Central Bank of Libya (CBL)
announced a budget deficit of LYD 25.1 billion (USD 20.9 billion) for 2014, around 49.1% of GDP. The
2015 budget deficit would decrease to 29.6% of GDP and financing the fiscal gap will be difficult
as oil exports are not expected to recover any time soon. The instability in the governance
structure, precariousness in the management of oil revenues and the growing division between
the government and the CBL, meant that the 2014 budget was never approved. The CBL has been
allocating essential expenditure to cover only the yearly public-sector salaries (LYD 23 billion) and
subsidies (LYD 14.5 billion). All other ministerial expenditures are suspended until a legitimate
government is formed.
Economic prospects depend on the political and security situations; the expected recovery
in oil production could once again be derailed if they do not improve. The election of the House
of Representatives (HoR) in June 2014, to replace the General National Congress (GNC) formed
after the overthrow of the Qaddafi regime, has further deepened the country’s political divisions,
with the various regional and tribal militias aligning themselves more closely with one or
another parliament. With neither the militias nor the two governments having full coercive
power, a security vacuum has emerged, undermining any form of economic activity and, in turn,
highlighting the dire need for a broad-based process of political reconciliation.
The issue of spatial inclusion is at the heart of the volatile transition that Libya has
experienced since the 2011 revolution. In fact, spatial exclusion, at various socio-economic levels,
has undermined any form of national solidarity required for a move towards post-revolution
democratic governance. The legacy of colonialism was the creation of an ethnically, tribally and
socio-politically heterogeneous country, over which the Qaddafi regime had maintained control
through force instead of a strategy of inclusion. Post-2011 Libya has therefore witnessed the rise of
2
African Economic Outlook
© AfDB, OECD, UNDP 2015
Libya
geographical, tribal and ethnic tensions. A resolution to such disparities and a process of national
dialogue would be key elements of a successful political and economic transition.
Figure 1. Real GDP growth
%
Real GDP growth (%)
North Africa
Africa (%)
120
100
80
60
40
20
0
-20
-40
-60
-80
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014(e)
2015(p)
2016(p)
Source: AfDB, Statistics Department AEO. Estimates (e); projections (p)
Table 1. Macroeconomic development
2013
2014(e)
2015(p)
2016(p)
6.3
Real GDP growth
-13.6
-19.8
14.5
Real GDP per capita growth
-14.3
-20.7
13.5
5.1
2.6
2.6
2.7
2.9
Budget balance % GDP
-6.2
-49.1
-29.6
-14.8
Current account % GDP
13.6
-23.3
-17.5
-6.6
CPI inflation
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations.
Recent developments and prospects
Libya’s economy was known previously for impressive growth rates driven by its oil and gas
industry. This growth performance was seriously dampened by the 2011 civil war. The economy
was disrupted by the shutdown in oil production and exports, as well as by the decline in oil
prices.
In 2014, Libya marked a year of intensifying oil field shutdowns, economic decline,
disintegration of central authority, and the rising power of regional and religious militias across
the country. Armed groups (or their coalitions) that have increasingly aligned themselves with
the country’s political parties or factions maintained control over the key oil production sites for
the majority of 2014. There was a major decline in both output and revenues during the first half
of the year, with the former reaching a low of 155 000 barrels per day (bpd) by May, well below the
historical average of 1.6 million bpd. From January to November, crude oil production averaged
450 000 bpd, nearly 500 000 bpd lower than the 2013 average and 900 000 bpd lower than the 2012
average. However, thanks to a political agreement reached between Prime Minister Al-Thinni and
armed militias to open some of the major oil fields and export terminals, official oil production
© AfDB, OECD, UNDP 2015
African Economic Outlook
3
Libya
began to recover by mid-2014 reaching 800 000 bpd in October 2014, although it fell to 350 000 bpd
in December 2014 because of the deteriorating security situation.
Oil production and exports account for more than 70% of Libya’s GDP but because of the crisis,
both came to a complete standstill with the result that GDP contracted by 13.6% in 2013 and by
20.7% in 2014 before a potential rebounding by perhaps 13.5% in 2015. This forecast is based on
the assumption that by 2015, increased political stability will reinstate oil production close to its
2012 level of 1.45 million bpd. However, it is important to emphasise that these forecasts hinge on
the peaceful resolution of the internal security and political situation during the course of 2015.
With paralysis in the oil sector depriving the state of revenues, the budget deficit in 2014
reached more than 49% of GDP (LYD 25.1 billion), while the current account deficit exceeded 23%
of GDP. The fiscal and current account deficits will not recover in 2015 and are expected to amount
to 29.6% and 17.5% of GDP, respectively. This is due to estimated revenue losses of USD 10 billion
(about 20% of GDP) in 2015.
Volatility in the petroleum sector has produced substantial budgetary pressure and resulted
in further divisions between the government and the Central Bank of Libya (CBL). As the recipient
of oil revenues, the CBL holds all the purse strings, including USD 100 billion in foreign-currency
reserves. It is from the CBL that money is distributed and assets accessed across Libya. Political
instability prevented approval of the proposed 2014 GNC budget that raised concerns over the
long-term fiscal sustainability of government finances in the context of declining oil revenues
in 2013-14. Total spending in the published 2014 budget was reduced to LYD 53.5 billion, down
from LYD 58.1 billion in the 2013 budget. Expenditure in most sectors (services, development, and
infrastructure) was reduced compared to 2013, with the only exception of spending on subsidies
(on fuel, food, water, and electricity). The budget breakdown indicated a lower priority given to
public works and infrastructure expenditure, while maintaining (and even raising) the spending
on salaries and subsidies to avoid social discontent. Development expenditure occupied the
lowest amount in total spending with an amount of LYD 7 billion, below the LYD 8.7 billion that
appeared in the 2013 budget. More than a third of the budgetary expenditure (LYD 23 billion)
was allocated to public-sector salaries, whereas LYD 13.5 billion was earmarked for subsidies
– an increase over 2013. However, according to the CBL, the proposed budget was based on
unrealistic and ambitious assumptions regarding oil production. It had assumed output of more
than 600 000 bpd, a level now unattainable as only two ports and offshore fields have escaped
the fighting. The CBL, therefore, refused to support the proposed budget and instead has been
allocating funds to cover only public-sector salaries and wheat and petrol subsidies estimated to
amount to LYD 38 billion (USD 28 billion). All other ministerial expenditures have been suspended
until a stable government is formed.
Since October 2014, the CBL has aligned itself with the militia-backed Tripoli government,
providing it with more access to resources. Conversely, the Tobruk House of Representatives (HoR)
government is said to be currently covering its costs with a LYD 250 million (USD 200 million) loan
from the National Commercial Bank (NCB). It has requested LYD 150 million (USD 120 million) from
the CBL for funding the “army’s campaign against terrorist groups” and a further LYD 100 million
(USD 80 million) for aiding internally displaced peoples (IDPs). However, it seems unlikely that the
CBL will satisfy these requests. Foreign reserves and the currency will be under severe pressure
in 2015 without a major policy change to lower the public wage bill and reduce the huge energy
subsidies. The Tripoli-based rival parliament has announced that it is considering lifting fuel
subsidies worth 20% of GDP. Such a move could increase government saving and reduce the fiscal
gap that has been financed by drawing down on foreign reserves, none of which will remain in
four years’ time at their current rate of utilisation in a climate of prolonged insecurity.
4
African Economic Outlook
© AfDB, OECD, UNDP 2015
Libya
Table 2. GDP by sector (percentage of GDP at current prices)
Agriculture, forestry, fishing & hunting
of which fishing
Mining and quarrying
2009
2012
2.8
0.8
…
…
54.7
65.6
of which oil
0.0
0.0
Manufacturing
6.3
3.2
Electricity, gas and water
1.5
1.2
Construction
8.8
1.3
Wholesale & retail trade; repair of vehicles household goods;
Restaurants and hotels
5.0
4.2
of which hotels and restaurants
0.2
0.1
Transport, storage and communication
4.8
3.0
Finance, real estate and business services
7.7
5.6
Public administration and defence
8.0
14.8
Other services
Gross domestic product at basic prices / factor cost
0.5
0.3
100.0
100.0
Source: Data from domestic authorities
Macroeconomic policy
Fiscal policy
The political instability in Libya and the absence of a stable government meant that there
was no clear fiscal policy or strategy during 2014. Void of any administrative power and coercion,
the ministries of finance of both rival governments did not have the capacity, resources or the
political and economic vision required to develop a fiscal policy for the volatile economy.
Responding to the dire political and economic situation, on 8 December 2014, the CBL issued a
statement on the weakened state of public finances, the heightened risks facing the country and
mounting threats to future stability. Reflecting its responsibility to inform the public and provide
advice to policy makers, the Central Bank called for immediate action in order to contain the
widening fiscal deficit and protect the well-being of ordinary citizens.
The emergence of two parallel governments has further damaged the fiscal management
of the economy and disturbed expenditure patterns. Lack of institutional co-ordination in the
public sector is by far the most important impediment to effective and transparent financial
management and monitoring in the economy. Given the declining power of the two governments,
and the increasing control by militias of the country’s major source of revenue (oil), there is
currently no systematic financial monitoring and management. Well-defined and transparent
rules determining the inflows and outflows of Libya’s sovereign wealth funds and the Budget
Reserve Account (BRA) are also urgently required. Attempts at reform since the revolution have
been sluggish and disrupted by the country’s ongoing political feud.
In 2015 and despite declining oil prices, it is expected that the budget deficit will improve from
49.1% of GDP in 2014 to 29.6% in 2015, mainly boosted by drastic cuts in expenditures implemented
by the CBL. Such a scenario obviously remains highly dependent on the security situation in the
country and the recovery of oil production.
© AfDB, OECD, UNDP 2015
African Economic Outlook
5
Libya
Table 3. Public finances (percentage of GDP at current prices)
2006
2011
2012
2013
2014(e)
2015(p)
2016(p)
65.6
39.1
72.3
58.7
45.1
54.3
50.8
Tax revenue
2.5
1.6
0.7
0.7
0.0
0.1
0.6
Oil revenues
60.7
36.6
71.1
57.6
44.8
53.7
49.8
Total expenditure and net lending (a)
29.1
55.0
44.5
64.9
94.2
83.9
65.7
Current expenditure
13.4
44.6
39.0
55.0
77.9
75.7
58.8
Excluding interest
13.4
44.6
39.0
54.5
76.9
75.7
58.8
Wages and salaries
6.0
30.1
16.0
21.6
34.3
28.6
22.4
Interest
0.0
0.0
0.0
0.5
1.0
0.0
0.0
Capital expenditure
15.6
8.0
4.6
9.3
12.5
8.3
6.9
Primary balance
36.5
-15.9
27.8
-5.8
-48.1
-29.6
-14.8
Overall balance
36.5
-15.9
27.8
-6.2
-49.1
-29.6
-14.8
Total revenue and grants
Note : a. Only major items are reported.
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations
Monetary policy
The political and administrative deadlock has meant that there is no clear monetary policy.
The Ministry of Finance that would be the main body responsible for setting the overall monetary
policy agenda has not been functional since mid-2014. In addition, the conflict between the CBL
and the HoR government authorities has deepened the disagreements over the direction of
monetary policy. While by mid-2014 the HoR government put pressure on the CBL to release
reserves to cover financing gaps caused by decreasing oil revenues, the CBL refused to obey,
insisting that the foreign-exchange reserves are primarily intended for the country’s current
and future investments. Despite substantial political pressures, the CBL has struggled and only
partially succeeded, to maintain an independent monetary policy stance.
The CBL reports that inflation was 2.4% in October 2014, however, the rise in informal
economic activity is likely to push up prices further. Average inflation was 2.6% in 2013, after
major post-revolution increases of 6.1% in 2012 and 16% in 2011, primarily caused by war-related
disruptions to economic activity. Disruptions to local transport infrastructure, including closure
of the Tripoli airport, have further impacted on imports, raising the prices of consumer products
across the country. Inflation is estimated at around 2.6% for 2014 and 2.7% in 2015. Broad money
and credit growth have remained subdued throughout 2014 at 4% and 1% of GDP, respectively, in
line with the slowdown in government spending and overall economic activity.
Economic co-operation, regional integration and trade
Libya is a member of several regional integration initiatives. It is a signatory to the Greater Arab
Free Trade Area (GAFTA) and the Arab Maghreb Union (AMU), and is a member of the community
of Sahel-Saharan states (CEN-SAD) and the common market for Eastern and Southern Africa
(COMESA).
Before the upsurge of political instability in 2014, Libya had made headway in engaging in
trade negotiations and signing agreements with regional and non-regional partners. Indeed,
in 2013 Libya signed a Trade and Investment Framework Agreement (TIFA) that would provide
a forum to address trade issues and help build trade and investment relations between the
United States and Libya. Libya has also signed a partnership and co-operation agreement with
Morocco aimed at strengthening trade between the two countries. Progress on these agreements
has been slow, however, due to the breakdown of administrative and governance structures.
Libyan Sovereign Wealth Funds (SWFs) with large investments across Africa could play a key
role in Libya’s integration with the African continent. SWFs, such as the Libya Africa Investment
Portfolio, which have succeeded in remaining operational despite the country’s ongoing political
6
African Economic Outlook
© AfDB, OECD, UNDP 2015
Libya
turmoil, are in the process of institutional reforms in order to increase the scale and efficiency of
Libyan investment and trade with the African continent.
Table 4. Current account (percentage of GDP at current prices)
2006
2011
2012
2013
Trade balance
55.1
22.6
43.3
27.2
3.4
7.2
11.7
Exports of goods (f.o.b.)
78.4
54.9
74.5
62.7
58.2
59.3
59.3
Imports of goods (f.o.b.)
23.3
32.3
31.2
35.5
54.8
52.1
47.6
Services
-4.3
-12.6
-8.4
-9.9
-19.0
-18.8
-14.2
Factor income
-0.1
0.2
-2.4
-0.2
-0.2
0.5
0.6
0.6
-1.1
-3.4
-3.5
-7.6
-6.4
-4.6
51.4
9.1
29.1
13.6
-23.3
-17.5
-6.6
Current transfers
Current account balance
2014(e)
2015(p)
2016(p)
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations.
Debt policy
Libya continues to have one of the lowest debt levels in the world. The public debt stood
at 4.8% of GDP in 2013, compared to 4.1% of GDP in 2012. In other words, Libya’s external debt
stood at USD 6.319 billion at the end of 2013, compared to USD 5.28 billion a year earlier. When
compared to the country’s foreign-exchange earnings over the same period, this amounts to a
small portion of foreign-exchange resources. Reserves of foreign exchange and gold were around
USD 120.9 billion in December 2013 and USD 118.6 billion in December 2012. In June 2014, foreign
reserves amounted to about USD 109 billion.
However, the substantial declines in government revenues in 2014 left a sizeable fiscal deficit
(49.1% of GDP) and raised the possibility of borrowing to finance expenditure. The government in
Tobruk has already announced that it is operating based on loans from the National Commercial
Bank. So far, in order to avoid further social breakdown, the two governments have maintained
their salary and subsidies expenditures, despite the decline in revenues. However, if the oil
revenues do not recover towards their long-term average, and in the context of the decline in
international oil prices, there could be recurring gaps in government expenditure which may
have to be financed through increased debt levels, especially in a context of using foreign reserves
to finance the two governments’ deficits. Such situation would not be sustainable in the medium
term.
© AfDB, OECD, UNDP 2015
African Economic Outlook
7
Libya
Figure 2. Stock of total external debt (percentage of GDP) and debt service (percentage of exports of goods and services)
%
Outstanding debt (public and private) /GDP
Debt service/Exports
16
14
12
10
8
6
4
2
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source : IMF (WEO & Article IV)
Economic and political governance
Private sector
Following the 2011 revolution, the Libyan authorities showed a stronger commitment to
pursue privatisation than had the previous regime. Moreover, in January 2013, the government
progressed on a new draft law for public-private partnerships (PPPs) that could open the way for
alternative sources of financing for reconstruction projects. However, the gradual breakdown
of the administrative structure in 2014, the coming to a halt of many institutional reform
programmes, and the sharp deterioration in the security situation, have further constrained
private-sector economic activity. Many private businesses have either closed down, or moved
their operations to other countries, notably Tunisia.
According to the Mo Ibrahim Index 2014, Libya is one of Africa’s poorest performing countries
in terms of business environment with an index value of 42.1 over 100 (or 43rd out of 52 countries);
well below the continental average (53.3) and below the North African regional average (58.1). In
relation to the regulatory environment for private-sector activities, the Doing Business Index
2015 ranks Libya in 180th position (out of 189 countries).
The business impact of the existing rules and regulation on FDI are extremely high, placing
Libya in 135th position out of 144 countries in the world, according to the Global Competitiveness
Index 2014-15. Libya also ranks very poorly in terms of prevalence of foreign ownership of
businesses. The “New Companies Law”, which was introduced by the government in 2013, is
bound to constrain the development of private-sector activity further. Under this law, Libyan
shareholders can only issue up to 49% of a joint venture to a foreign partner (rather than 65%
provided for in the 2012-Decree No. 103). With the reduction to 49%, many Libyan start-up
ventures, which might previously have been funded by foreign investors, will no longer find
foreign partners. Also, the new minimum capital requirement of LYD 1 million is a significant
outlay for most companies, and will likely deter foreign companies from establishing in Libya.
8
African Economic Outlook
© AfDB, OECD, UNDP 2015
Libya
Financial sector
The financial sector remains in a rudimentary state and has not gone through structural
reforms after the revolution. The CBL oversees the financial system, which is composed of a
network of 15 commercial banks, the majority of which are state- or partially state-owned (85%
of banking assets); four specialised credit institutions; five insurance companies; and a recently
established stock market. The ratio of loans to deposits in March 2013 amounted to only 23.4%,
reflecting weak lending to the private sector. Lack of technical expertise will continue to challenge
the development of the financial sector. Licenses to foreign banks seeking to operate in Libya are
unlikely to be issued by the CBL until a more permanent government and parliament are elected.
The volatility of oil revenues has had implications for the stability of the financial system.
Although relevant data are not available, it is thought that, with many businesses shifting their
operations abroad due to the security situation, the banking sector has felt the brunt of the
current economic crisis. As a matter of public policy, bank lending to certain sectors, including
agriculture and real estate, is given priority, which reduces the scope for lending to other sectors.
In the medium term, as the government seeks to deepen the role of the private sector in the
economy and encourage lending, the CBL is likely to lower its reserve requirement (currently at a
high 20%) and may supplement this by cutting interest rates.
On 7 January 2013, the General National Congress (GNC) promulgated Decree No. 1, banning the
charging of interest on loans granted to individuals. This decree is announcing the introduction
and development of an Islamic banking and finance market in Libya. At the same time, it was
further announced by the GNC that the same principles would start to apply to corporate loans,
as from 1 January 2015. Additionally, under this law, a special fund was established to provide
interest-free loans. This fund is to be under the supervision of the CBL. In December 2013,
the Ministry of Economy established a new financial-sector regulator aimed at improving the
transparency of the sector and supporting the expansion of Libya’s small stock market. However,
the lack of technical expertise and the political volatilities affecting the Ministry’s operations
have delayed the operation of this regulatory body.
Public-sector management, institutions and reform
The overall disintegration in public-sector management and co-ordination through the
course of 2014 was worsened since the election of the House of Representatives (HoR) in June.
The dismissal of the election results by the outgoing GNC, and the reconvening of the latter
in Tripoli, has resulted in emergence of a dual governance structure in the country. This has
made the task of managing the country’s resources, institutions and the overall economic and
political transition even more challenging, with neither government’s having full authority over
the country’s political and economic landscape. Currently, there are no functioning ministries,
and with no national budget approved, the state of public service delivery and security is under
threat more than ever before. The occupation of many official ministerial buildings in Tripoli
since last summer by the militias aligned with Tripoli’s GNC government has severely disrupted
the activities of ministries in charge of providing critical social services, forcing them to relocate
to the eastern city of Tobruk. Although the Libyan government which was in power until mid2014 had initiated a series of Public Financial Management reforms with the help of international
institutions since 2013, these efforts came to a halt by mid-2014 after the election of the HoR and
the subsequent chaos in the country’s governance structure. The resulting security vacuum also
led to the departure of the international bodies that were assisting Libya with its PFM reform
programme, notably the World Bank.
One substantial impact of this governance breakdown is the lack of clarity about which
government, that of Tobruk or Tripoli, is managing the country’s budget, and how much is
being allocated to the various ministries. It is believed that since the election of the HoR and
its associated government, the Central Bank has been channelling a monthly budget to the HoR
© AfDB, OECD, UNDP 2015
African Economic Outlook
9
Libya
ministries to cover basic salary and subsidy expenditures. However, more recently the increasing
alignment of CBL’s governing body with the GNC government in Tripoli has implied more
resources being channelled to the latter, resulting in the HoR government’s dependence on loans.
Improving public-sector service delivery and institutional capacity building and reform will be
priorities once a stable government comes to power in Libya.
Natural resource management and environment
Natural resources, particularly hydrocarbons, play a major role in Libya’s economic,
geopolitical and environmental well-being and performance. Indeed, rivalry over control of
this rich resource has fuelled deep and destructive tension among various regional and tribal
militias across the country, bringing to an effective halt the country’s post-revolution transition.
Since mid-2013, the management of this sector has increasingly fallen into the hands of militias
associated with various political factions. As a result, there is uncertainty over the levels of
production and revenues generated by this sector.
The intense fighting and attacks in Tripoli and Benghazi in July 2014 raised fears of an
environmental disaster. By targeting the country’s oil storage and distribution infrastructure,
including Tripoli’s largest storage tank that contains around 6.6 million litres of fuel, the warring
militias could have brought about an environmental and humanitarian catastrophe. Aware of
such consequences, the government at the time called for international assistance in fighting the
blaze amid heavy fighting between rival militias.
The deteriorating political and security situation has reduced the priority and policy attention
given to debates over environmental policies and regulations. Little progress has been made on
the Green Oil Libya policies that were initiated as part of a large Libya Environmental Initiative
aiming to protect the environment by pursuing high-quality waste-treatment solutions. In
addition, the water-shortage problem has not been addressed for the last four years. Yet, this
issue is important because Libya is Africa’s most water-stressed country, with minimal surface
waters and no perennial rivers, and with only 95 m3 of available water per person per year.
Political context
Intensifying oil-field shutdowns, economic decline, the disintegration of central authority,
and the rising power of regional and religious militias defined 2014.
Following months of delay, the House of Representatives (HoR) was elected in June, replacing
the General National Congress (GNC) which had acted as the legislative body since July 2012.
The election of the HoR was disputed by the Islamist factions who eventually helped the GNC to
reconvene in Tripoli in August. Consequently, there are two rival governments in Libya linked to
either the HoR or the GNC: the first one is in Tobruk, centred around the elected and internationallyrecognised HoR, with a cabinet led by Prime Minister Abdullah al-Thinni who took the oath of
office on 28 September. However, as the conflicts in Tripoli and Benghazi intensified, and the
Tobruk government aligned itself increasingly clearly with the anti-Islamist supporters of the
renegade General Hiftar, a second government emerged in Tripoli: the Islamist-dominated GNC
headed by Omar al-Hassi and supported by a coalition of armed militias from Misrata and other
western towns. The latter holds Tripoli and the country’s ministries. The dual administrations
indicate the depth of administrative and bureaucratic chaos in the country and constitute a major
challenge in the future.
To initiate a process of political reconciliation, the UN Support Mission (UNSM) in Libya
brokered talks between representatives from both sides in Ghadames on 29 September. The talks
resulted in an agreement to start a political process with a strong call for a complete ceasefire.
However, the effectiveness of these talks are in doubt as they did not involve armed factions
from Misrata or the rival militia allied to the western city of Zintan who battled Misrata forces
10
African Economic Outlook
© AfDB, OECD, UNDP 2015
Libya
in Tripoli for more than a month over the summer. As long as the different militias and groups
are not included in the political negotiations and are, hence, unable to see the value of political
reconciliation and co-operation, the conflict will continue. Further reconciliation meetings
were subsequently organised by the UNSM in Libya. However, a Supreme Court ruling on
6 November 2014 declared the March amendment to the country’s transitional constitution and
the subsequent government in Tobruk as illegal, deepening the rift between the supporters of the
rival governments. The Tobruk-government, however, continued its administration despite the
ruling, questioning the legitimacy of the Supreme Court.
Social context and human development
Building human resources
Libya’s HDI for 2013 is 0.784 (in the high human-development category) positioning it in
55th place out of 187 countries and territories and an increase from the 1980 score of 0.641.
During the same period, life expectancy at birth increased by 11.1 years, mean years of schooling
increased by 5.3 years and expected years of schooling increased by 3.6 years. Libya’s GNI per capita
decreased by about 50.9% between 1980 and 2013. Over the last decades significant progress has
been attained in health and education. The 2009 Millennium Development Goals (MDG) Report
for Libya stated that the country was well on the way to attaining the MDGs by 2015. However, in
the light of the recent political changes, it is unlikely that the MDGs will be fully achieved in 2015.
The latest data (2008) showed that the enrolment ratio in primary education was about 98.2%
of the total cohort and the infant mortality rate declined from 27 deaths per 1 000 live births to
17.6 deaths per 1 000 live births by 2008. Despite healthy HDI indicators, often originating from
the important social subsidy and spending programmes, there has been a consistent lack of longterm strategic planning in the educational and health areas. In 2014, the quality of the education
system in Libya has been affected further by the deteriorating security situation preventing a
large number of education institutions from resuming activity even as of September. Increasingly
violent clashes have forced many schools to shut down temporarily. In eastern Libya, fighting
between militias prevented more than 60 000 students from attending their first day of school. In
addition to accessibility to the educational services, the quality of education remains very low,
particularly as the fighting has taken attention away from reform of the educational system and
curricula. According to the Global Competitiveness Index (GCI) 2014-15, Libya ranked last out of
144 countries in the area of quality of the education system. According to the GCI 2014-15, Libya ranks first out of 144 countries in HIV prevalence. The
adult HIV prevalence rate is less than 0.2%, with 11 910 people estimated to be living with
HIV/AIDS in 2011. In addition, Libya ranks 65th out of 144 countries in tuberculosis cases per
100 000 population and 91st in terms of the business impact of tuberculosis. Given the decline in
the national health infrastructure, as well as the increasing difficulties in accessing medicines,
there are high risks of a worsening of the situation in these areas.
Due to the current political situation, the Ministry of Health failed to implement institutional
reforms, including the establishment of national health accounts, institutional capacity building
and improved transparency and service delivery, launched after the revolution. Moreover, the
dramatic decline in government revenues and spending in 2014 has threatened the state of social
safety-net programmes.
Poverty reduction, social protection and labour
Despite being one of the richest countries in the world in terms of natural resource endowments,
the unproductive structure of the economy, combined with regional and tribal inequalities have
resulted in unequal access to oil wealth. As a result, according to some estimates about onethird of Libyans live beneath the poverty line. Moreover, since the revolution, and particularly
© AfDB, OECD, UNDP 2015
African Economic Outlook
11
Libya
during the course of 2014, political and economic developments have led to the deterioration
of many ordinary Libyans’ living standards. The general decline in the country’s revenues, due
to oil production interruptions, as well as the breakdown of the state’s governance structure,
have severely hampered the public service delivery. Basic services, such as health and education,
have suffered severely. With the emergence of the two governments, and in the absence of an
approved budget, the Central Bank decided to allocate the budget on a monthly basis and only
towards the most essential expenditure items, namely public-sector salaries and subsidies to
prevent a severe social breakdown.
According to the ILO, workers’ rights to freedom of association and collective bargaining
continue to be minimal, especially with a weak trade union system. Although Libyan labour law
protects workers’ rights, including working hours, minimum wage and freedom of association,
these are not always enforced. At the community level, social divisions have further deepened:
in 2012-13 the government ran community-driven initiatives aimed at removing arms from
the public domain, increasing electoral participation, and working towards post-conflict
reconstruction. However, the increasing power and activities of the regional and tribal militia
groups have emphasised the tribal, regional and religious fault-lines of the society, resulting in
increasing social fragmentation that has been undermining the possibility of the emergence of
new community-driven initiatives.
Gender equality
Libya still lags behind in terms of gender equality, especially where it relates to access to
economic resources and the labour market. According to the 2013 ‘Libya Status of Women Survey’,
the majority of currently or formerly married women do not have access to economic resources.
Indeed, 59% do not personally have financial savings, 64% do not own items of high value such as
a car or jewellery and only 12% own land or an apartment. Libya has a Gender Inequality Index
value of 0.215, ranking it 40th out of 149 countries in the 2013 index.
Access to education is almost balanced between men and women. According to the 2013 Libya
Status of Women Survey, there are almost as many women (32%) as men (33%) holding a university
degree or higher. About 56% of adult women have reached at least a secondary level of education
compared to 44% of their male counterparts. However, balanced access to education does not
necessarily provide women with equal opportunities for employment. Female participation in
the labour market is 30% compared to 76.4% for men. According to the Global Competitiveness
Index 2014-15, Libya ranks 131st out of 144, in terms of women’s participation in the labour force.
Other areas that are important for Libya’s progress towards equal access to development
opportunities, such as female political participation and inclusion in strategic decision-making,
require further improvement. In 2014, 16.5% of parliamentary seats were held by women in the
General National Congress (GNC). Specific projects were launched in 2014 to seek progress on
these issues. The “Dastoor project” was launched in March 2014 on Women’s day with the support
of the European Union, and aims to support Libyan women and civil society organisations in the
drafting and implementation of the new constitution.
Thematic analysis: Regional development and spatial inclusion
The issue of spatial inclusion is at the heart of the volatile transition that Libya has experienced
since the 2011 revolution. In fact, spatial exclusion at various socio-economic levels has
undermined any form of national solidarity required for a move towards a democratic governance
structure. Colonialism bequeathed an ethnically, tribally and socio-politically heterogeneous
country, over which the Qaddafi regime maintained control through force instead of inclusion.
Once Qaddafi was removed from power, post-2011 Libya suffered the rise of geographical, tribal
and ethnic tensions.
12
African Economic Outlook
© AfDB, OECD, UNDP 2015
Libya
The 2014 total population is estimated to be around 6.25 million people over 1.77 million square
kilometres, which gives it one of the world’s lowest population densities, with only 3.6 people per
square kilometre. However, population density varies dramatically between the fertile Northern
coastal strip (50 people per square kilometre) and the desert regions, where each person can lay
claim to their own square kilometre.
A major characteristic remains the significant dominance of two cities: Tripoli and Benghazi,
attracting the lion’s share of economic and political investment and development efforts. Tripoli
is located in the northwest of the country, at the top of the fertile agricultural Aljfara plain. It is
in the centre of several agricultural and urban regions and its coastal nature has allowed for the
establishment of the most important port in the country. Benghazi is in the east, close to the
richest oil fields, with available water and as established trade, education and social services.
The two major cities remain the main centres for educational and health services. They account
for 52% of the total number of university students and around 84% of the specialised hospitals.
The two cities have also captured more than 75% of the total financial services, mainly banks and
insurance companies. Victims of their rapid growth, however, they face several serious problems,
such as congestion, pollution, housing shortages, lack of sanitation and unemployment. Slum
areas have also emerged.
Libya has the largest oil reserves in Africa with an estimated total of 47.1 billion barrels
according to Oil and Gas Journal (OGJ) as of January 2012. These reserves are distributed across
five major onshore sedimentary basins: Sirte, Ghadamis, Murzuq and, offshore, Tripolitanian.
With 80% of proven oil reserves located in Sirte basin, the eastern region also accounts for most
of the oil output, accounting for more than 95% of the country’s revenues. However, Qaddafi’s
regime, focused for decades on leveraging these revenues to develop the western part of the
country, and more specifically the Tripoli area, which is the historical region for his tribe. As an
illustration, the state-owned National Oil Corporation (NOC), Qaddafi’s instrument for managing
the oil wealth, is in Tripoli, and not Benghazi. Following the 2011 revolution, strong opinions were
expressed about relocating the NOC headquarters to Benghazi in order to ensure a more balanced
distribution of the revenues to the east of the country.
What has driven spatial construction is, therefore, the geographical positioning of Libya’s
rich natural resources, chiefly hydrocarbons. For decades, Qaddafi’s policies increased spatial
disparities leading to a polarisation between the east and the west of Libya. Other regions have
been left behind in most government development plans, leading to deep regional resentments
that are among the key drivers of the upheavals since 2011. The lack of structured inclusive
development plans to ensure a minimum level of local investment of revenues has prevented
equal access to natural, economic and political resources.
The tensions from the country’s vast spatial disparities have heightened since mid-2013, with
the militias associated with tribes to the east occupying some of the country’s largest oil fields
and oil terminals in order to exert pressure on the government for further inclusion in Tripoli’s
political decision-making processes. With the emergence of parallel militias in the east and west
of the country, and the emergence of two parallel governments in Tripoli and the eastern city
of Tobruk, the country is not only more divided than ever before, but also the living standards,
access to services and the long-term development prospects of all parties are more hampered
than ever.
Further spatial inclusion and cohesion in Libya is the key to its successful economic and
political transition. While political stability is required for an inclusive spatial strategy to be
established, the latter is also an important prerequisite for the creation of a national dialogue
and a return to political stability in the country. In the long-term, diversification of the country’s
revenues and reducing dependency on hydrocarbon exports are important structural policies
aimed at reinforcing the growth of other productive sectors. Developing Libya’s production
capabilities in specific areas, such as agriculture, ports and coastal development, will allow for
© AfDB, OECD, UNDP 2015
African Economic Outlook
13
Libya
14
growth in the associated regions and, therefore, further social and economic inclusion of their
populations. Until then, a gradual and carefully crafted process of national dialogue is required in
order to resolve some of the deep-seated questions of access to, and participation in the country’s
economic and political spheres.
African Economic Outlook
© AfDB, OECD, UNDP 2015
LIBYA
Economic Freedom Score
25
50
75
Least
free 0
World Rank: Not Ranked
Regional Rank: Not Ranked
Most
100 free
This economy is not graded
umerical grading of Libya’s overall economic freedom
N
remains suspended for the third year in a row in the 2015
Index because ongoing political turmoil has resulted in deteri-
Freedom Trend
40
oration in the quality of publicly available economic statistics.
Facets of economic freedom for which data are still available
have been individually scored. As a “repressed” economy with
a score of 35.9, Libya was ranked last in the Middle East/North
Africa region when it was last graded in the 2012 Index.
Political unrest, violence, and militia rule have continued to
plague Libya ever since Muammar Qadhafi’s ouster in 2011.
Years of dictatorial rule left the economy largely dependent on oil resources. Structural and institutional mechanisms to guarantee sustained growth have been absent.
Limited efforts to diversify the economy away from oil have
been unsuccessful.
Libya faces serious long-term and short-term challenges. In
the short term, a political transition must be achieved that
limits violence and political instability. Establishing the rule
of law and effective governance will be critical if the weak central government is to repair the crumbling economic infrastructure destroyed during the civil war.
BACKGROUND: Dictator Muammar Qadhafi was overthrown
in 2011, and elections were held in July 2012. The new government under President Mohammed Magarief and Prime
Minister Ali Zeidan struggled to rein in militias fighting for
control of territory and resources. Zeidan stepped down in
March 2014 and was replaced by Ahmed Maiteg in May. As
fighting between militias and Islamist terrorist groups continued, Libya held legislative elections in June. Oil and natural gas provide about 80 percent of GDP, 95 percent of export
revenues, and 99 percent of government revenues. Economic
recovery began in 2012, and the energy sector is producing at
pre-war levels. The government faces major challenges in disarming and demobilizing militias, improving the rule of law,
and reforming the state-dominated socialist economy.
How Do We Measure Economic Freedom?
See page 475 for an explanation of the methodology
or visit the Index Web site at heritage.org/index.
39
38
37
36
35
34
2011
2012
2013
2014
2015
Country Comparisons
Country n/a
World
Average
60.4
Regional
Average
61.6
Free
Economies
84.6
0
20
40
60
80
100
Quick Facts
Population: 6.1 million
GDP (PPP): $70.4 billion
–9.4% growth in 2013
5-year compound annual growth –6.0%
$11,498 per capita
Unemployment: 9.0%
Inflation (CPI): 2.6%
FDI Inflow: $702.0 million
Public Debt: n/a
2013 data unless otherwise noted.
Data compiled as of September 2014.
289
LIBYA (continued)
THE TEN ECONOMIC FREEDOMS
Score
RULE OF
LAW
Country
World Average
Property Rights 10.0
Freedom from Corruption 15.0
0
20
40
60
80
Rank
1–Year
Change
165th
180th
0
–3.3
100
Institutional effectiveness continues to be undermined by security problems. Many experienced technocrats who served under the Qadhafi regime are blocked from assuming leadership
roles in which they might be able to execute effective policy. In 2014, numerous investigations
of foreign companies allegedly complicit in improper business practices in Libya under the
Gaddafi regime continued.
Fiscal Freedom 95.0
GOVERNMENT
Government Spending 37.5
SIZE
11th
155th
0
20
40
60
80
0
+37.5
100
Libya’s top individual income tax rate is 10 percent, and its corporate tax rate is 20 percent (plus
a 4 percent surcharge for a Jihad Fund). Oil revenue makes up 96 percent of all government
revenue, and security concerns make tax administration erratic. Overall tax revenue amounts
to less than one percent of gross domestic product, and expenditures equal 45.7 percent of GDP.
REGULATORY
EFFICIENCY
Business Freedom 46.8
Labor Freedom 66.7
Monetary Freedom 71.4
163rd
71st
139th
0
20
40
60
80
–3.3
–11.2
+4.5
100
The business environment, lacking transparency and efficiency, remains very poor and fragile. The labor market, which already suffered from state interference and control, has been
severely affected by political instability and uncertainty. In the 2014 budget, the government
committed to subsidy reform by January 2015, starting with the conversion of goods and fuel
subsidies into cash subsidies.
OPEN
MARKETS
Trade Freedom 80.0
Investment Freedom 5.0
Financial Freedom n/a
70th
174th
—
0
20
40
60
80
n/a
0
n/a
100
Libya has a 0 percent average tariff rate. The country’s regulatory regime interferes with trade.
State-owned enterprises distort the economy, and political unrest discourages international
trade and investment. The financial sector has many shortcomings in its diversification and
scope. The central bank owns four of the major banks that dominate the banking sector.
Long-Term Score Change: n/a
GOVERNMENT
SIZE
RULE OF LAW
Property Rights
Freedom from
Corruption
290
n/a
n/a
Fiscal Freedom
Government
Spending
REGULATORY
EFFICIENCY
n/a
n/a
Business Freedom
Labor Freedom
Monetary Freedom
2015 Index of Economic Freedom
OPEN MARKETS
n/a
n/a
n/a
Trade Freedom
Investment Freedom
Financial Freedom
n/a
n/a
n/a
Doing Business 2015
11
Libya
THE BUSINESS ENVIRONMENT
The absolute values of the indicators tell another part of
the story (table 1.1). The indicators, on their own or in
comparison with the indicators of a good practice
economy or those of comparator economies in the
region, may reveal bottlenecks reflected in large numbers
of procedures, long delays or high costs. Or they may
reveal unexpected strengths in an area of business
regulation—such as a regulatory process that can be
completed with a small number of procedures in a few
days and at a low cost. Comparison of the economy’s
indicators today with those in the previous year may
show where substantial bottlenecks persist—and where
they are diminishing.
Libya DB2015
Libya DB2014
Algeria DB2015
Iraq DB2015
Jordan DB2015
Syrian Arab Republic
DB2015
Tunisia DB2015
Best performer globally
DB2015
Egypt, Arab Rep. DB2015
Table 1.1 Summary of Doing Business indicators for Libya
144
137
141
73
142
86
152
100
New Zealand (1)
Starting a Business (DTF
Score)
73.50
73.77
74.07
88.14
74.03
85.61
69.23
83.60
New Zealand (99.96)
Procedures (number)
10.0
10.0
13.0
7.0
10.0
7.0
7.0
10.0
New Zealand (1.0)*
Time (days)
35.0
35.0
22.0
8.0
29.0
12.0
13.0
11.0
New Zealand (0.5)
Cost (% of income per
capita)
19.9
19.1
11.0
9.2
38.2
21.4
14.4
4.2
Slovenia (0.0)
Paid-in min. capital (%
of income per capita)
33.8
31.0
24.1
0.0
12.8
0.0
272.1
0.0
112 Economies (0.0)*
Dealing with
Construction Permits
(rank)
189
189
127
142
9
126
189
85
Hong Kong SAR,
China (1)
Dealing with
Construction Permits
(DTF Score)
0.00
0.00
65.72
62.06
86.65
66.02
0.00
73.19
Hong Kong SAR,
China (95.53)
Indicator
Starting a Business
(rank)
12
20.0
8.0
16.0
no
practice
17.0
Hong Kong SAR,
China (5.0)
Time (days)
no
practice
no
practice
204.0
179.0
119.0
63.0
no
practice
93.0
Singapore (26.0)
Cost (% of warehouse
value)
no
practice
no
practice
0.7
1.9
0.3
9.5
no
practice
2.6
Qatar (0.0)*
65
60
147
106
36
44
76
38
Korea, Rep. (1)
79.10
79.17
59.98
71.31
84.95
82.95
77.91
84.59
Korea, Rep. (99.83)
4.0
4.0
5.0
7.0
4.0
5.0
5.0
4.0
12 Economies (3.0)*
Time (days)
118.0
118.0
180.0
54.0
77.0
50.0
71.0
65.0
Korea, Rep. (18.0)*
Cost (% of income per
capita)
206.2
189.1
1,318.5
304.6
228.9
315.9
801.5
738.7
Japan (0.0)
Registering Property
(rank)
189
189
157
84
109
107
140
71
Georgia (1)
Registering Property
(DTF Score)
0.00
0.00
50.67
69.13
62.62
63.45
55.46
72.03
Georgia (99.88)
Procedures (number)
no
practice
no
practice
10.0
8.0
5.0
7.0
4.0
4.0
4 Economies (1.0)*
Time (days)
no
practice
no
practice
55.0
63.0
51.0
21.0
19.0
39.0
3 Economies (1.0)*
Cost (% of property
value)
no
practice
no
practice
7.1
0.7
8.2
7.5
27.8
6.1
4 Economies (0.0)*
Getting Credit (rank)
185
185
171
71
180
185
165
116
New Zealand (1)
Getting Credit (DTF
Score)
0.00
0.00
10.00
50.00
5.00
0.00
15.00
35.00
New Zealand (100)
Getting Electricity
(rank)
Getting Electricity (DTF
Score)
Procedures (number)
Best performer globally
DB2015
17.0
Tunisia DB2015
Jordan DB2015
no
practice
Syrian Arab Republic
DB2015
Iraq DB2015
no
practice
Libya DB2014
Procedures (number)
Indicator
Libya DB2015
Egypt, Arab Rep. DB2015
Libya
Algeria DB2015
Doing Business 2015
13
Libya DB2014
Algeria DB2015
Egypt, Arab Rep. DB2015
Iraq DB2015
Jordan DB2015
Syrian Arab Republic
DB2015
Tunisia DB2015
Best performer globally
DB2015
Libya
Libya DB2015
Doing Business 2015
Strength of legal rights
index (0-12)
0
0
2
2
1
0
1
2
3 Economies (12)*
Depth of credit
information index (0-8)
0
0
0
8
0
0
2
5
23 Economies (8)*
Credit registry coverage
(% of adults)
0.5
0.5
2.0
5.8
0.0
2.2
7.7
30.2
Portugal (100.0)
Credit bureau coverage
(% of adults)
0.0
0.0
0.0
21.8
0.0
0.0
0.0
0.0
23 Economies (100.0)*
Protecting Minority
Investors (rank)
188
188
132
135
146
154
78
78
New Zealand (1)
12.50
12.50
45.00
44.17
42.50
41.67
55.00
55.00
New Zealand (81.67)
Extent of conflict of
interest regulation
index (0-10)
2.0
2.0
5.0
4.7
4.7
3.3
5.0
5.7
Singapore (9.3)*
Extent of shareholder
governance index (010)
0.5
0.5
4.0
4.2
3.8
5.0
6.0
5.3
France (7.8)*
Strength of minority
investor protection
index (0-10)
1.3
1.3
4.5
4.4
4.3
4.2
5.5
5.5
New Zealand (8.2)
Paying Taxes (rank)
157
155
176
149
52
45
117
82
United Arab Emirates
(1)*
Paying Taxes (DTF
Score)
55.25
55.25
41.63
58.84
80.09
81.19
68.54
74.11
United Arab Emirates
(99.44)*
Payments (number per
year)
19.0
19.0
27.0
29.0
13.0
25.0
19.0
8.0
Hong Kong SAR,
China (3.0)*
Time (hours per year)
889.0
889.0
451.0
392.0
312.0
151.0
336.0
144.0
Luxembourg (55.0)
139
138
131
99
178
54
146
50
Singapore (1)
Indicator
Protecting Minority
Investors (DTF Score)
Trading Across Borders
14
Libya DB2014
Algeria DB2015
Egypt, Arab Rep. DB2015
Iraq DB2015
Jordan DB2015
Syrian Arab Republic
DB2015
Tunisia DB2015
Best performer globally
DB2015
Libya
Libya DB2015
Doing Business 2015
61.72
61.51
64.21
71.56
20.48
78.92
58.57
80.36
Singapore (96.47)
Documents to export
(number)
7
7
8
8
10
5
8
4
Ireland (2)*
Time to export (days)
23.0
23.0
17.0
12.0
80.0
12.0
18.0
16.0
5 Economies (6.0)*
1,140.0
1,140.0
1,270.0
625.0
3,550.0
825.0
1,995.0
805.0
Timor-Leste (410.0)
Cost to export (deflated
1,140.0
US$ per container)
1,169.7
1,270.0
625.0
3,550.0
825.0
1,995.0
805.0
Indicator
(rank)
Trading Across Borders
(DTF Score)
Cost to export (US$ per
container)
Documents to import
(number)
9
9
9
10
10
7
9
6
Ireland (2)*
Time to import (days)
37.0
37.0
26.0
15.0
82.0
15.0
24.0
20.0
Singapore (4.0)
Cost to import (US$ per
1,255.0
container)
1,255.0
1,330.0
790.0
3,650.0
1,235.0
2,410.0
910.0
Singapore (440.0)
Cost to import (deflated
1,255.0
US$ per container)
1,287.7
1,330.0
790.0
3,650.0
1,235.0
2,410.0
910.0
Enforcing Contracts
(rank)
126
126
120
152
141
114
175
78
Singapore (1)
Enforcing Contracts
(DTF Score)
51.42
51.42
52.89
44.02
47.32
54.04
35.17
60.96
Singapore (89.54)
Time (days)
690.0
690.0
630.0
1,010.0
520.0
689.0
872.0
565.0
Singapore (150.0)
Cost (% of claim)
27.0
27.0
21.9
26.2
28.1
31.2
29.3
21.8
Iceland (9.0)
Procedures (number)
43.0
43.0
45.0
42.0
51.0
39.0
55.0
39.0
Singapore (21.0)*
Resolving Insolvency
(rank)
189
189
97
126
189
145
146
54
Finland (1)
15
Libya DB2014
Algeria DB2015
Egypt, Arab Rep. DB2015
Iraq DB2015
Jordan DB2015
Syrian Arab Republic
DB2015
Tunisia DB2015
Best performer globally
DB2015
Libya
Libya DB2015
Doing Business 2015
0.00
0.00
42.74
36.17
0.00
30.17
30.15
54.71
Finland (93.85)
Time (years)
no
practice
no
practice
2.5
2.5
no
practice
3.0
4.1
1.3
Ireland (0.4)
Cost (% of estate)
no
practice
no
practice
7.0
22.0
no
practice
20.0
9.0
7.0
Norway (1.0)
Outcome (0 as
piecemeal sale and 1 as
going concern)
no
practice
no
practice
0
0
no
practice
0
0
0
Recovery rate (cents on
the dollar)
0.0
0.0
41.7
26.6
0.0
27.0
27.0
52.3
Japan (92.9)
no
practice
6.5
7.0
no
practice
5.0
5.0
8.5
5 Economies (15.0)*
Indicator
Resolving Insolvency
(DTF Score)
Strength of insolvency
no
framework index (0-16) practice
Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of such
factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in
DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time
recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and
VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice”
mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a
competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the
relevant indicator.
* Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number
of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
(http://www.doingbusiness.org).
Source: Doing Business database.
Exporting to Libya?
Helping you comply with the requirements of the Libya
Inspection Programme for exports.
The Central Bank of Libya recently issued a Resolution No. (96) of 2015
which regulates the use of foreign exchange for opening documentary
Letters of Credit (L/C). This resolution is mandatory for all issuance of
Letters of Credit for all shipments exported to Libya from 30th April
2015.
All goods exported to Libya under a Letter of Credit now require a
Certificate of Inspection (CoI) issued by an international inspection
company such as Intertek.
Intertek is able to assist exporters to Libya in complying with these
requirements and is qualified to issue the mandatory CoI.
How to obtain the Certificate of Inspection
• Contact your local Intertek office, details can be found at www.intertek.com/government
• Our export consultants will go through the submitted documents and will contact you and supply you
with a quote for the work with details of our terms and conditions on the same day.
• Then supply us with your export documents, these can include Letters of Credit, Final Invoice and
Packing List.
• Upon acceptance of the quote, we will arrange with you a mutually convenient date, time and location
for the inspection to be carried out. This can normally be arranged within a maximum of 48 hours of
your initial call to us.
• Your Certificate of Inspection will be made available upon receipt of the inspection report and all other
related shipping documents
Exporter/Importer
Submits export documents
(Letter of Credit, Final
Invoice, Packing List etc.)
Intertek office to review the
submitted documents
Exporter to resubmit valid
documentation based on
feedback from Intertek office
NO
Is the
documentation
complete and
acceptable
NO
Is container
sealing required?
YES
Inspector to witness loading
and seal the container
YES
Schedule Inspection
Perform inspection as per
scheduled date and time
Inspection
successful?
NO
Reject Inspection
YES
Issue CoI
The Intertek Solution helping you export to Libya
• Intertek is a member of the International Federation of Inspection Agencies and a partner to
international government standards and inspection programmes.
• Intertek has experience in providing solutions to businesses exporting a wide range of products
to Libya. We have undertaken more assessments of more products for longer than any other
organisation.
• Intertek tests, inspects and certifies products and commodities around the world to various
governmental, international and industry standards.
Intertek
Government and Trade Services
Academy Place
1-9 Brook Street,
Brentwood,
Essex CM14 5NQ,
UK
• Intertek has the expertise, resources and global reach to support its customers through its network of
more than 1,000 laboratories and offices and over 38,000 people in more than 100 countries around
the world.
• Intertek has issued more than 2 million test reports and certificates to clients exporting products to
countries such as Nigeria, Kenya, Uganda, Mozambique, Saudi Arabia and Kuwait.
• Intertek can provide a tailor-made service that meets your particular requirements.
T: +44 (0)1277 223 400 For assistance in exporting to Libya, find details of your local, dedicated Libyan expert at
www.intertek.com/government
F: +44 (0)1277 220 296
or e-mail [email protected]
To see a complete list of our laboratories please visit www.intertek.com/contact.
www.intertek.com
Full details on all of our services for exporters and importers can be found at www.intertek.com/government.
STATE OF LIBYA
LIBYA
PRE-SHIPMENT INSPECTION PROGRAMME
EXPORTER AND IMPORTER GUIDELINES
ISSUED: 05-Jul-15
LIBYA EXPORTER AND IMPORTER GUIDELINES
INTRODUCTION
The Central Bank of Libya recently issued a Resolution No. (96) of 2015 which regulates the use of foreign exchange
for opening documentary Letters of Credit (L/C) and collection against these Letters of Credit. This resolution is
th
mandatory for all issuance of Letters of Credit for all shipments exported to Libya from 30 April 2015.
All goods exported to Libya require a Certificate of Inspection (CoI) issued by an international inspection company
such as Intertek, to allow these shipments to be financed through a Letter of credit issued by a commercial bank.
OBJECTIVES
The primary objectives of the programme are:


To regulate the use of foreign exchange for the purpose of opening Letters of Credit
To open Letters of Credits for importation from abroad.
KEY PRINCIPLE OF THE PROGRAMME
The key principle of the Pre-Shipment Inspection Programme is to confirm that the goods are in line with the Letter of
Credit in terms of Quality, Quantity and Value of the consignment. The Central Bank of Libya requires the presentation
of a Certificate of Inspection on import which shall be presented to the bank for any consignment covered by a Letter
of Credit.
PRE-SHIPMENT INSPECTION PROCESS
Regulated product consignments have to be inspected as per the requirements of Resolution of Governor of Central
Bank of Libya No. (96). The compliance verification process shall involve physical inspection of the consignment. The
inspection process is as outlined below:
A. EXPORTER SUBMITS SUPPORTING DOCUMENTS:
The Exporter contacts the responsible Intertek Office.
Exporter includes the following information for scheduling the inspection or alternatively provides the
completed Request for Certificate of Conformity (RFC) also known as Request for Certificate of
Inspection.



Invoice
Letter of Credit
Packing List
B. INTERTEK OFFICE REVIEW SUBMITTED DOCUMENTATION:
The Intertek Office reviews the information provided by the Exporter and does a preliminary check to verify
whether the substantiating documents submitted are enough to do inspection of the shipment. If not, then
the Intertek Office will request the Exporter to provide missing information/documents. At this stage, the
Intertek Office will open a file in ASTRA and will send the Notification letter with Inspection to the Exporter for
scheduling the inspection.
C. CONSIGNMENT INSPECTION BY THE APPOINTED INSPECTOR:
The Intertek Offices coordinates with the Exporter for the inspection of the consignment. The Inspector will
contact the Site Representative to arrange a time for the physical inspection of the consignment.
GTS-PM-LBY-EIG-00
Page 1 of 2
STATE OF LIBYA
LIBYA
PRE-SHIPMENT INSPECTION PROGRAMME
EXPORTER AND IMPORTER GUIDELINES
ISSUED: 05-Jul-15
LIBYA EXPORTER AND IMPORTER GUIDELINES
Once the inspection has been arranged, the Inspector inspects the consignment to verify whether the
products included in the shipment are same as those detailed in the documents submitted for inspection, to
ensure it includes the required information, the quantity of the product is as per the invoice and physical
condition of the products.
D. ISSUE CERTIFICATE OF INSPECTION:
On successful review of the inspection result, Intertek will issue the Certificate of Inspection. In such cases,
where the Exporter requests for a CoI before the issuance of the certificate, a draft copy of the CoI would be
provided before the issuance of the final CoI to ensure it meets the requirements of the Exporter.
This certificate shall be presented for any consignment covered by a Letter of Credit. Intertek Certificate of
Inspection (CoI) is recognized and shall be presented for Customs clearance on arrival in Libya.
The validity of the Certificate of Inspection (CoI) is 90 days from its date of issue.
CONTAINER SEALING

All FCL containers will be sealed by Intertek provided the Exporter has made the goods available at a time and
place that has allowed Intertek to continually witness the loading and seal upon the same visit.

FCL containers will be mandatorily sealed if it is a L/C requirement. Thus, it is imperative that the Exporter meets
the conditions as stated above to ensure that the L/C requirement can be met.
CERTIFICATION FEES
The party acquiring the certification services is accountable for the Inspection charges performed by Inspection
Company. These fees cover the cost of inspection and all other technical and administrative activities involved in the
shipment inspection certification.
An individual quote will be provided to the party requesting for the certification services and agreed upon before
commencing with the inspection process.
CONTACTS
INTERTEK GOVERNMENT AND TRADE SERVICES
INTERTEK GOVERNMENT AND TRADE SERVICES
Academy Place,
1-9 Brook Street, Brentwood,
Essex CM 14 5NQ, United Kingdom
Tel: +(44) 1277 223400
Fax: +(44) 1277 220296
E-mail: [email protected]
INTERTEK PROGRAMME MANAGEMENT
INTERTEK PROGRAMME MANAGEMENT
14F, Millennium Plaza Tower,
Sheikh Zayed Road,
Dubai, PO Box 26290, United Arab Emirates
Tel:
+971 4 317 8777
Fax:
+971 4 331 6735
E-mail: [email protected]
EXHIBITS
Exhibit A
Exhibit B
Intertek Offices Contact Details
Request for Certificate of Conformity (Request for Certificate of Inspection)
GTS-PM-LBY-EIG-00
Page 2 of 2
Request for Certificate of Conformity*
*Request for Technical Inspection Report
*Request for Certificate of Inspection
RFI –
For Intertek Use Only
IMPORTANT: The quality and completeness of the documentation submitted by the Applicant directly influences the time and cost of processing the
certification request. The general Intertek Terms and Conditions and Additional Certification Conditions governing this application are embedded within this
document for the applicant’s easy reference. Incomplete applications will not be processed.
TYPE OF APPLICATION
VALID FROM
VALID TO
NOTE: Multiple Shipments option is only VALID for regular exporters having frequent shipments of the same products. This RFC can be used for multiple
shipments of the same products within the validity period indicated. Validity period shall not exceed one year in all cases.
SHIPMENT CERTIFICATION
REQUEST FOR (Country Name)
EXPORTER (APPLICANT) DETAILS
IMPORTER DETAILS
COMPANY NAME
COMPANY ADDRESS
CONTACT PERSON
E-MAIL ADDRESS
TELEPHONE NO.
FAX NO.
TRADE LICENCE
KSA Shipments only
NO.
EXPIRY DATE
APPLICANT TYPE
NO.
EXPIRY DATE
NIGERIA Shipments only
BA NO.(Form M)
RC/BN NO.
TIN
SHIPMENT DETAILS (Shipment location where goods are available for inspection, if different from Exporter’s details)
SITE NAME
SITE ADDRESS
CONTACT PERSON
E-MAIL ADDRESS
TELEPHONE NO.
FAX NO.
SHIPMENT REFERENCE (If available)
PROFORMA INVOICE
NO.
INVOICE DATE
UCR NO.
L/C NO.
GABON / GHANA/ KENYA
Shipments Only
ALGERIA / NIGERIA
Shipments Only
IDF NO.
KENYA Shipments Only
OTHERS,
(BL / AWB / II NO.)
DOCUMENTS ATTACHED TO THIS APPLICATION
Please also visit our website www.intertek.com/government to learn about the shipment certification services we can provide for the following countries such as Algeria, Bangladesh,
Botswana, Ecuador, Egypt, Ethiopia, Gabon, Ghana, Kenya, Kuwait, Libya, Mexico, Niger, Nigeria, The Philippines, Qatar, Russia, Saudi Arabia, Uganda.
GTS-PM-CAP-FRM-RFC-28
Page 1 of 2
Request for Certificate of Conformity*
*Request for Technical Inspection Report
*Request for Certificate of Inspection
SHIPMENT DELIVERY
PORT OF LOADING
PORT OF DISCHARGE
VESSEL NAME
COUNTRY OF SUPPLY
(If known only)
GOODS
AVAILABILITY DATE
EXPECTED
SHIPMENT DATE
GROSS
CONSIGNMENT WEIGHT
DELIVERY
MODE OF TRANSPORT
MODE OF SHIPMENT
GOODS CONDITION
QUANTITY
PAYMENT DETAILS (Party responsible for paying the certification service applied for, if different from the Applicant)
COMPANY NAME
COMPANY ADDRESS
CONTACT PERSON
E-MAIL ADDRESS
TELEPHONE NO.
FAX NO.
INTERTEK CREDIT
REFERENCE NO.
PAYMENT TYPE
INVOICE
CURRENCY
TO BE USED
ADDRESS WHERE
INVOICE IS TO BE SENT
REMARKS AND COMMENTS (please provide, if any)
IN GENERAL, ALL IMPORTED GOODS SUBJECT TO SPECIFIC PROGRAMME REQUIREMENTS MAY BE SUBJECTED OR RANDOMLY SELECTED FOR INSPECTION AND
TESTING FOR SAFETY, QUALITY AND TRADE COMPLIANCE PURPOSES AT THE CUSTOMS TERRITORY. INTERTEK PERFORMS THE EVALUATION OF CONFORMITY
BASED ON A RANDOM SAMPLING OF YOUR PRODUCTS AND ON TESTING OF LIMITED PARAMETERS THROUGH A RISK ASSESSMENT APPROACH.
THUS, BY COMPLETING AND SUBMITTING THIS REQUEST FORM, YOU TAKE YOUR OWN RESPONSIBILITY AND ACKNOWLEDGE THAT YOU ARE AWARE OF THE
CUSTOMS LEGISLATIVE AND REGULATORY REQUIREMENTS GOVERNING THE IMPORT OF YOUR PRODUCTS AND COMMIT TO COMPLY WITH THOSE
REQUIREMENTS. IN AGREEING TO PROVIDE THE SERVICES PURSUANT TO THIS AGREEMENT, INTERTEK DOES NOT ABRIDGE, ABROGATE OR UNDERTAKE TO
DISCHARGE ANY OF YOUR DUTY OR OBLIGATION TO THE RELEVANT AUTHORITIES WITH REGARD TO THE QUALITY AND SAFETY OF YOUR PRODUCTS.
DECLARATION
I/WE DECLARE THAT ALL PRODUCTS REQUESTED FOR CERTIFICATION THROUGH THIS APPLICATION ARE NOT AFFECTED BY ANY PRODUCT RECALLS
NOR THESE ARE SUBSTANDARD OR COUNTERFEIT, TO THE BEST OF OUR KNOWLEDGE. I/WE ALSO DECLARE UNDER OUR OWN RESPONSIBILITY THAT THE
PRODUCTS REQUESTED FOR CERTIFICATION THROUGH THIS APPLICATION TO WHICH THIS DECLARATION OF CONFORMITY RELATES, SATISFY THE
REQUIREMENTS OF THE STANDARDS AND OTHER NORMATIVE DOCUMENTS REGULATIONS APPLICABLE TO THIS TYPE OF PRODUCTS FOR EXPORT.
BY SUBMITTING THIS COMPLETED APPLICATION. I/WE CONSENT TO INTERTEK’S GENERAL TERMS AND CONDITIONS AND TO THE ADDITIONAL CERTIFICATION
CONDITIONS WHICH ARE ATTACHED HEREIN. I/WE ALSO ACKNOWLEDGE AND AGREE THAT INTERTEK MAY SHARE ANY OF THE DATA, RESULTS AND
DOCUMENTATION GATHERED AND GENERATED DURING THE PERFORMANCE OF THE SERVICES TO THE EXTENT REQUESTED BY THE RELEVANT AUTHORITIES TO
VERIFY THE CONFORMITY OF THE PRODUCTS. I/WE ALSO DECLARE THAT AT THE TIME OF THE SUBMISSION OF THIS RFC, THE SHIPMENT IS STILL IN THE
COUNTRY OF SUPPLY AND IS ACCESSIBLE FOR INSPECTION, IF NEEDED.
NAME
POSITION
DATE
Thank you for taking the time in filling out this form. We appreciate your business!
EXHIBITS
Intertek Terms &
Conditions
RFC Additional
Certification Conditions
RFC List of Products
Template
Note: Click on the above icons for accessing the embedded exhibits.
List of Products using the template provided is to be
completed ONLY if the product descriptions in the Invoice are
not clear.
Please also visit our website www.intertek.com/government to learn about the shipment certification services we can provide for the following countries such as Algeria, Bangladesh,
Botswana, Ecuador, Egypt, Ethiopia, Gabon, Ghana, Kenya, Kuwait, Libya, Mexico, Niger, Nigeria, The Philippines, Qatar, Russia, Saudi Arabia, Uganda.
GTS-PM-CAP-FRM-RFC-28
Page 2 of 2