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Libyan Experts Consider AfCFTA Implications for National Economy

7 October, 2022

Tunis, 7 October 2022 (ECA) – The ECA Office for North Africa concluded today a four-day capacity development workshop on Libya and the African Continental Free Trade Area (AfCFTA).

“Libya is facing multiple crises, including COVID-19, civil conflict, intensifying droughts, and spillovers from Russia-Ukraine war. The African Development Bank projects the economy of Libya to grow by 3.5 percent in 2022 and 4.3 percent in 2023. However, these short-term projections hinge on political stability, security improvements and uninterrupted oil production”, said Zuzana Brixiova Schwidrowski, Director of the ECA Office for North Africa.

“Diversifying the economy away from the oil sector and reducing growth volatility while generating jobs is a key challenge for the country. This new capacity building programme provides an opportunity to discuss how Libya can diversify its economy and put it on a more balanced growth path, but also move towards renewable energy and be cognisant of the climate change,” she added.

This workshop was held at the request of Libyan Ministry of Trade; it was the first of two trainings aimed at strengthening Libyan stakeholders’ understanding of the agreement, identify opportunities and challenges for Libya, draw the outlines of a national strategy and ultimately make their country’s voice better heard at AfCFTA negotiations.

The training was aimed at officials from the Libyan Ministries of Trade, Economy, Finance, Planning, Justice, Transport, other public administration such as customs, private sector representatives and academia.

The African Continental Free Trade Area (AfCFTA), signed in Kigali, Rwanda in 2018 is the world’s largest free trade zone since the creation of the WTO, with the aim of creating a continent-wide single market with a GDP of approximately USD 3.4 trillion and 1.2 billion consumers.

The AfCFTA aims to lower tariff and non-tariff barriers and harmonize trade rules between its members countries to reduce transaction costs, accelerate and increase the flow of goods and services between African countries and ultimately foster regional integration.

Although Libya has one of the highest GDPs in Africa thanks to its large hydrocarbon reserves, the country’s economy remains highly dependent on hydrocarbon exports and is therefore exposed to oil price variations, explained Lubuya Bashala, Economist at the ECA office for North Africa.

The AfCFTA could allow Libya to make the most of its current hydrocarbon reserves while diversifying its economy and trade partners, thus generating more job opportunities for its youth, improving the country’s economic resilience and sustainability. To do so, Libya will need a carefully designed national strategy that will enable it to promote and diversify national exports, and benefit from a wider range of imports while protecting strategic sectors.

Note to Editors

ECA is one of the five regional commissions of the United Nations Economic and Social Council (ECOSOC). Its Office for North Africa aims to support the development of seven countries across the sub region (Algeria, Egypt, Libya, Morocco, Mauritania, Tunisia and Sudan) by helping them formulate and implement policies and programs that support their economic and social transformation.

A significant part of the ECA mandate is to support African member countries’ efforts to make the AfCFTA a success and a significant source of growth for their economies.

The ECA Office for North Africa will hold a continuation of the AfCFTA capacity building workshop for the benefit of Libyan stakeholders in November 2022, with the goal of supporting Libya’s efforts to design a national strategy for the implementation of the AfCFTA.