Libya _Overdependence on oil a nightmare – CBL Deputy Governor &

libyaherald

The Deputy Governor of the Central Bank of Libya (CBL), Ali Salem, said that Libya’s overdependence on oil “could become a nightmare if Libya did not act” to reverse this trend.

Salem, speaking at the recent PPP workshop in Tripoli,  said that Libya spent US$0.77 of every US dollar of every barrel of oil it sold on non-development spending.

He blamed this on the decades of state dependency under the previous regime when little was done by state organisations such as the CBL, the Libyan Investment Authority (LIA), which is Libya’s Sovereign Wealth Fund and the Housing and Infrastructure Board (HIB), in the way of development.

Libya’s Sovereign Wealth Funds were not reflecting positively on the living standards of the Libya citizen, Salem added, noting that Dubai, despite its small size enjoyed a GDP of US$ 500 bn, which was much larger than that of Libya.

This much larger GDP Salem attributed to Dubai’s diversified economy and the availability of finance, which he felt was key to any real development.

Moreover, the Deputy Governor admitted that Libya’s private sector was, and still is, marginalized. He feared that will remain the case until it moved from operating mainly in the trade sector, to operating in development activity.

Salem also felt that the Ministry of Housing initiated draft PPP law needs to have input from a wide range of sectors, including the private sector .

He urged all government organs such as the CBL and LIA to participate in supporting and cooperating with the private sector in development projects. This included creating the right environment for the private sector in order to take a real active role in progressing Libya’s development.

Libya needs knowledge and technology transfer from foreign partners, but on a sound basis, Salem explained.