The Minister of Economy and Trade, Mohammed Al-Hawij, revealed, during an exclusive interview with “218News” channel, a number of important files and issues, including the financial reserves of the Libyan state, and the reasons for the national economy’s dependence entirely on oil production.
During his speech to “218News”, Al-Hawij stressed that the country’s economy depends on three basic elements, namely the geographical location, the number of people with high levels of education and creativity, in addition to the financial reserve, pointing to the possibility of benefiting from Libya’s distinguished position in the global project of China, according to his expression.
Speaking about plans to attract foreign companies to work in Libya, the Minister of Economy and Trade stressed the need to provide important workers, taking into account the imposition of security and stability, so that foreign companies can trust in the country and establish successful investment projects to achieve the desired level of growth.
Al-Hwaij stated that his ministry has granted permission to “61” new foreign companies to work in Libya, including 13 contracting companies, 11 companies working in the electricity field, one company working in the telecommunications field, 26 companies working in the field of industry and 4 companies concerned with the environment, in addition to 3 technical companies, 1 inspection company.
He indicated the countries concerned with participating in the reconstruction of Libya and contributing to the advancement of its national economy, on top of which is Egypt that will contribute to the reconstruction and creation of infrastructure, in addition to Turkey, and it will, in turn, contribute to the transfer of technology to build services, and the US and Germany handle most of the energy projects in country, whether it is oil energy or clean energy.
Al-Hawij continued by saying: “Libya currently produces about 1.3 million barrels of oil per day, and it can raise production to three million barrels of crude, if the security situation is stabilized and the oil sector is kept away from political disputes.”
According to the statements of the Minister of Economy, Libya occupies the fourth place in the world in terms of oil reserves, stressing that it is rich in various natural resources such as the sea and the huge fish wealth it contains, in addition to minerals and sand. In addition to Libya’s possession of one of the most important Roman and Greek historical civilizations that attract millions of tourists, Al-Hawij feared the current situation, saying: “The process of economic reform at this stage is very difficult.”
According to al-Hawij, the gross domestic product is 40 billion dollars, which is controlled by oil, and it is possible for Libya to raise the gross domestic product to 200 billion dollars, as its economy was decentralized to bring about a noticeable development in it, he said.
Similar to the economic diversification owned by Libya, Al-Hawij suggested the creation of a system of 7 economic zones, so that the government can communicate with developed countries to raise the level of education, develop the health sector and hospitals, and enhance investment in various sectors.
“We must set priorities, such as increasing investment in oil, providing food, medicine and electricity, and transferring competition with international partners from negative to positive,” Al-Hawij added.
He identified the weak point of the Libyan economy, indicating that it lies in the instability of the exchange rate, and the Central Bank must defend the value of the dinar against foreign currencies, including the US dollar, according to criteria that are determined based on international rules set by the World Bank Fund and the International Monetary Fund, which It ensures control of inflation and improves the standard of living.
Al-Hawij warned of international intentions and ambitions that are trying to distract the economic and financial scene in the country, and seek to undermine the ministry’s plans to advance the national economy, stressing the importance of the private sector’s role in building the national economy.
He stated that his ministry had developed a plan that would support commodities in a new way and form that ensured that the subsidy was not exploited in unhealthy areas, as he described it.
He added that the Council of Ministers approved a number of commodities to support them, in addition to establishing the Grains Bureau to maintain security. He stressed in the same context that Libya needs 1.250 million tons of soft wheat to produce flour, and the Grains Bureau will follow up the process of supplying the private sector to the local market with grain.
Al-Hweij said that the number of flour mills in the country is sixty-eight, 21 of which are in the western region, 34 in the eastern region, and 10 in the central region. As for the southern region, it contains three flour mills, and if he manages to develop the agricultural sector, we will not need to import Wheat, and barley, the extraction rate reached 75%, and bran for fodder was 25%. The local production of food commodities reached 15%, and Libya imports 85% from abroad.
The Minister of Economy explained that there is a clear difference between smuggling and re-export. Smuggling, which is what is meant by goods that are subsidized by the state, while re-export is the imported goods that enter Libya and are then re-exported.
As for the map of trade exchange with neighboring countries, the value of trade exchange with neighboring countries in 2020 amounted to about two billion dinars annually, divided as follows, where Tunisia topped the neighboring countries with a value of 1.1 billion dinars, followed by Egypt again with 500 million dinars, while Algeria came third.
The value of a trade exchange is 60 million dinars, indicating that it is a modest number due to the conditions Libya is going through due to the lack of regulation of foreign trade relations.
In his speech, Al-Hwaij mentioned the percentage of the private sector’s contribution to the GDP in the last eight years, as the private sector constituted the largest proportion of the national economy during the 1970s, as the private sector contributed 57 percent of the GDP during 1963, and its rate in 1975 accounted for 46 percent, while in 1981 it achieved 50 percent, while in the early nineties it recorded 60 percent, and in the late nineties, specifically in 1999, it recorded 71 percent, and in 2005 it recorded 30 percent, while it was recorded in 2011 accounted for 37 percent of the gross domestic product, and in 2018 it amounted to 40 percent, while it was recorded in the last year 2020 to 40 percent. In addition to the lack of support for the private sector in the field of research and development, not to mention the absence of a competitive advantage, explaining that the Libyan Chambers of Commerce, Industry and Agriculture are still weak.
The banking system in Libya has also not been spared from security fragility and political division over the past years. The Minister of Economy and Trade, Muhammad al-Hawij, believes that the deterioration of the banking sector is crippling the economy, and that it needs to be rebuilt again, in accordance with international standards.
Turning to the Coronavirus ndemic file, Al-Hawij said that the pandemic exacerbated the deterioration of the national economy and contributed to the rise in prices at all levels, in addition to the decrease in production capacity and the cessation of economic activity due to the suspension of factories and laboratories, stressing that the citizen is the one who paid the price for these conditions.
Al-Hawij confirmed that his ministry is working in coordination with the Central Bank of Libya to control prices at the outlets, which calculate the value of accreditation, the value of transportation and the value of storage, in order to set the real price of the commodity, in addition to cooperating with the Municipal Guard, and forming committees to track medicines to know its sources and production history.
According to the Minister of Economy, the losses of Libya due to instability from 2011 to 2020, recorded huge numbers, amounting to one trillion dollars, as oil losses were recorded at 155 billion dollars, while the social, infrastructure and reconstruction costs amounted to 576 billion dollars, and the cost of equipment recorded 69 billion dollars, while Human and material losses were recorded at $200 billion. In addition, the gross domestic product decreased from $90 to $40 billion, and the value of the dinar decreased from 1.40 to 4.48, recording 320 percent, in addition to that, the unemployment rate increased by 20 percent.