Analyst: Libya needs a new economic model now

Political analyst Ahmed Al-Aboud has stressed that any meaningful discussion of Libya’s economic situation must be grounded in an officially approved state budget implemented through the Central Bank of Libya, warning that debates outside this framework are “unrealistic”.

In remarks to Libya Al-Ahrar TV, monitored by Libyan Express, Al-Aboud said the proposed development agreement remains unclear, urging a focus on its third chapter related to development spending within the state budget.

He noted that there is no dispute over salaries, while operational expenditures have already been agreed. However, the development component remains unresolved due to ongoing divisions between state institutions and the influence of external actors, complicating efforts to reach consensus.

On the international front, Al-Aboud described US policy as pragmatic and interest-driven, aimed at securing strategic gains, including within Libya’s economic landscape.

He said efforts to unify Libyan institutions have seen partial success, particularly in bringing together the Central Bank, but warned that political division between eastern and western authorities continues to hinder broader progress.

Al-Aboud added that the General Command of the armed forces engages directly with key actors on the ground while avoiding divided political institutions. He said the US approach similarly focuses on financial and monetary tracks rather than direct political intervention, including engagement through the International Monetary Fund.

He stressed the importance of coordination between Libyan authorities and international partners, pointing to ongoing diplomatic engagement with Rome, Paris and Washington to create conditions for US companies to operate in Libya’s oil and gas sector.

This comes amid regional tensions, including the US-Israeli war on Iran, which continue to impact global energy markets.

Despite ongoing challenges, Al-Aboud said Libya retains strong potential for economic growth. However, he noted that oil production remains limited at around 1.3 million barrels per day, underscoring the importance of maintaining stable supply for international partners.

He highlighted the role of the Libya Reconstruction Fund, describing it as a key component in development efforts, particularly in eastern Libya, where infrastructure projects have delivered visible results.

Al-Aboud said Libya continues to pay the price for missed opportunities since 2011, with recurring economic challenges, particularly around the absence of a fully approved national budget.

He called for a complete restructuring of the budget, arguing that outdated economic models are no longer suitable for modern global conditions.

The analyst also urged Libya to define a new economic identity based on fair distribution of resources across the country’s three regions, supported by effective monetary policies and genuine reform.

He warned that mismanagement, waste and corruption remain major obstacles, driven by weak centralised control and lack of accountability.

Al-Aboud said Libya failed to fully benefit from recent global oil price increases, noting that the National Oil Corporation did not maximise production or infrastructure development during that period.

He called for broader participation of national institutions in managing financial resources and contracts to ensure transparency and sustainability in development and reconstruction projects.

On infrastructure, Al-Aboud pointed to major projects in eastern and southern Libya, including airports, cement plants and cross-border road links with Niger and Chad, as well as new housing and healthcare facilities in cities such as Benghazi and Sirte.

He said these projects represent important steps toward addressing decades of regional neglect and improving living conditions.

Regarding investment in the oil sector, Al-Aboud said opportunities should remain open to all companies under strict state oversight to ensure transparency and long-term sustainability.

Addressing controversy surrounding Arkno, he said the debate lacks transparency and requires clear evidence, particularly regarding claims linking the company to political figures or reports of multi-billion-dollar revenues.

He emphasised the need for accurate data on production and contracts, warning against politicising the issue without verified information.

Al-Aboud also criticised recent international reports on the matter, saying they relied on incomplete or inaccurate data and require more rigorous scrutiny.

He concluded that Libya’s political process remains stalled due to prolonged transitional phases, noting that US-led initiatives have achieved limited progress but failed to accelerate a comprehensive political settlement.

He added that recent calls for economic dialogue stem from unresolved disputes over agreements and financial arrangements, particularly involving the Reconstruction Fund, which seeks to address these issues directly without external representation.