For the French version of this country profile, click here.
To download a pdf version of the full 2018 Libya country profile, click here.
Libya’s economy depends on the oil industry; oil revenue accounted for 38.5 percent of total nominal GDP and oil accounted for 97.2 percent of total exports in 2014. The national unrest in Libya not only destabilised the economy but it also had dire social impacts. The real GDP growth was estimated at 55.1 percent in 2017 after three years of economic contraction, due to a significant increase in oil production (from 400 000 bpd in 2016 to 900 000 bpd in 2017) and a slight increase in oil prices. Before the conflict, there was a wave of political and social grievances due to an acute shortage of housing units. Currently an estimated 435 000 out of the population of 6 million are internally displaced, and houses, schools, and hospitals are destroyed.
Development of Libya’s financial sector has stagnated due to Libya’s instability, high inflation, and a sustained liquidity crisis. Bank lending for housing finance is restricted by high collateral requirements, the inexistence of a Libyan land register or a credit bureau, and inadequate central bank regulation. The ratio of housing finance to GDP is estimated to have remained low at below 1 percent. The banks’ poor targeting of home loans as well as poor repayment enforcement distort the housing finance market and restrict the development of a functioning mortgage system. Today, it is particularly difficult for low income or small borrowers to access finance for housing.
Libya’s minimum wage in 2018 is LD450 (US$325).16 Overall unemployment was estimated at 17.7 percent in 2017 and even higher for youth – up to 45.96 percent – with most of the unemployed holding university degrees. Owing to the political state of affairs and a disruption in business, the unemployment rate has remained high and the earning capacity of Libyans has continued to decline. Given the housing shortage, rental shares have escalated beyond the affordability of an average household; a one-bedroom unit in central Tripoli costs between US$400 – US$600 per month, while rents for units outside the city centre are estimated at US$376 per month.
Housing was identified as a key priority in Gaddafi’s regime where public housing supply was financed with oil revenue and zero percent interest rates were offered until there was a housing surplus. A decline in revenue from oil reserves created an unfavourable economic climate for investors which had a negative impact on housing supply. Since then, Libya’s property market has been influenced by legislation which prevents ownership for leasing purposes. One of the most important laws regarding housing development during Gaddafi’s socialism regime, was Law n° 4 which prevented activities for profit purposes, stopped housing rents, and prevented the private sector from building houses for leasing purposes.
The property market is constrained by difficulties in doing business, therefore, it will be useful for the ambiguity of property rights to be resolved –a measure that will encourage banks to register property as collateral. The housing sector relies on the political climate of the country because politics inevitably facilitate or limit the ability of the country to deliver housing stock.
Find out more information on the housing finance sector of Libya, including key stakeholders, important policies and housing affordability:
- Macroeconomic Overview
- Access to Finance
- Housing Supply
- Property Markets
- Policy and Regulations
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2018 edition, which has up-to-date profiles for 54 African countries.Download yearbook
Libya is in North Africa, on the Mediterranean Sea, bordered by Niger, Chad, Egypt, Sudan, Algeria, and Tunisia. In 2017, the country had a population of 6.4 million. Libya’s economy depends on oil; oil revenue accounted for 38.5 percent of total nominal GDP and oil accounted for 97.2 percent of total exports in 2014. Prior to the national unrest, Libya was once considered an upper middle income country with the highest GDP in Africa and one of the highest HDI rankings in the world.
The national unrest, which resulted in the fall of Muammar Gaddafi’s authoritarian regime in 2011, as well as civil war, tribal and religious militias, and terrorist activities, have weakened the economy and affected some of the neighbouring countries. In 2017, political conflict persisted, despite efforts by the United Nations Support Mission in Libya (UNSMIL) to mediate between the parties. Consequently, the country is still experiencing an escalating humanitarian crisis with more people being displaced by violence. Migrants and refugees are exposed to life-threatening conditions which include sexual assaults and forced labour.
Analyses of North African economic performance often exclude Libya because the volatility of that economy distorts the figures. African Economic Outlook reports that real GDP growth was estimated at 55.1 percent in 2017 after three years of economic contraction, due to a significant increase in oil production (from 400 000 bpd in 2016 to 900 000 bpd in 2017 and a slight increase in oil prices. As a result, the current account deficit is expected to turn into a surplus of 1.8 percent of GDP in 2017. This is also expected to increase exports by 62.5 percent and imports by 4 percent – which have been falling with the decline in foreign reserves. After peaking in 2015 at 126.6 percent of GDP, the budget deficit dropped to an estimated 43.3 percent of GDP in 2017. The removal of food subsidies has fuelled inflation which reached 32.8 percent in 2017.
Despite the recently improving economic outlook, uncertainty persists, given Libya’s political situation. Consensus on the wording of the Libyan Political Agreement is yet to be reached in preparation for a constitutional referendum and elections before the end of 2018. Key challenges confronting Libya include restoring the rule of law, putting in place a functional government, reducing economic dependency on the petroleum industry, and reaching consensus on strategies for reconstruction and long-term development.
Once these challenges are addressed, housing and urban infrastructures will likely be among the priorities. Before the conflict, there was resentment and political and social grievances due to an acute shortage of housing units. Currently an estimated 435 000 out of the population of 6 million are internally displaced, and houses, schools, and hospitals are destroyed.  The cumulative deficit in 2014 was 353 139 housing units and the estimated housing units to be implemented to meet the deficit and satisfy the need between 2014 and 2033 is estimated at 1 164 134 units.
 African Development Bank Group (2018). Libya Economic Outlook: Key Facts. https://www.afdb.org/en/countries/north-africa/libya/ (Accessed 18 September 2018).
 IMF(2016). Economic Diversification in Oil Exporting Arab Countries. Annual meeting of Arab Ministers of Finance – April 2016. https://www.imf.org/external/np/pp/eng/2016/042916.pdf (Accessed 20 Sept 2018). Pg.13.
 African Development Bank Group (2018). African Economic Outlook 2018. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/African_Economic_Outlook_2018_-_EN.pdf (Accessed 19 Sept 2018). Pg. 153.
 African Development Bank Group (2018). Libya Economic Outlook. https://www.afdb.org/en/countries/north-africa/libya/libya-economic-outlook/ (Accessed 15 Sept 2018).
 United Nations Security Council (2018). “Libyan political agreement still key to holding credible elections, ending crisis, Security Council says in Presidential statement, calling for compromise.” 6 June 2018. https://www.un.org/press/en/2018/sc13366.doc.htm (Accessed 15 Sept 2018).
 Gberie, Lansana (2018). “Forgotten war: A crisis deepens in Libya but where are the cameras?” Dec 2017 – March 2018. Africa Renewal. https://www.un.org/africarenewal/magazine/december-2017-march-2018/forgotten-war-crisis-deepens-libya-where-are-cameras (Accessed 16 Sept 2018).
 Shawesh, Ezedin Mohamed (October 2016). “Libyan Policy in the Field of Public Housing.” International Journal of Research Studies in Science, Engineering and Technology, Volume 3, Issue 10. http://ijrsset.org/pdfs/v3-i10/2.pdf (Accessed 17 Sept 2018). Pg. 14.
Access to Finance
Development of Libya’s financial sector has stagnated due to Libya’s instability, high inflation, and a sustained liquidity crisis. The House of Representatives established a second central bank operating in eastern Libya, which printed its own Libyan dinars due to the liquidity crisis, injecting an estimated 4 billion illegitimate Libyan dinars into the economy.
For years, the banking sector in Libya was isolated. Early in 1970, when Gaddafi came to power, all the banks were nationalised and international sanctions through the 1990s limited foreign investment in Libya. Libya’s banking sector was dominated by five state-owned banks: Jumhouria Bank, National Commercial Bank, Wahada Bank, Sahara Bank, Libya Foreign Bank (which controlled about 80 percent of total banking assets), and a stock market which was established in 2006.
A process of privatisation and banking reform commenced in 2007 with some foreign banks authorised to acquire shares in public banks, the legalisation of joint ventures between foreigners and local investors in 2010, and a rise of interest in seeking new banking licenses.
Bank lending for housing finance is restricted by high collateral requirements, the inexistence of a Libyan land register or a credit bureau, and inadequate central bank regulation. Libya has a very low loan-to-deposit ratio, with the most recent data reporting 28.3 percent as of end 2015. Domestic credit to the private sector in 2017 was 17.2 percent of GDP. This is largely a result of a steady contraction of real GDP and the crisis in the banking sector.
The ratio of housing finance to GDP is estimated to have remained low at below 1 percent. Once, the Savings and Real Estate Investment Bank would grant subsidised housing loans to Libyan citizens at zero interest rate and tenures up to 30 years. Yet, there was a lack of independent oversight, which allowed mismanagement and many Libyans view these loans as grants, so there are very high default rates. The banks’ poor targeting of home loans as well as poor repayment enforcement distort the housing finance market and restrict the development of a functioning mortgage system. Today, it is particularly difficult for low income or small borrowers to access finance for housing.
In 2013, the government passed a law to enforce a strict Islamic Banking regime and ban interest in financial transactions. The law went into effect in January 2015, although implementation has proved a challenge. Libya is the third Middle-eastern country, after Iran and Sudan, to ban non-Sharia compliant banking. Nevertheless, lack of government control of the country has left enforcement of this policy in limbo and many commercial banks have ceased lending, effectively paralyzing the banking sector.
 Al-Shahomy, Suliman S. (2016). “Cash liquidity crisis in Libyan Commercial Banks.” 13 Jan 2016. Libya Prospect. http://libyaprospect.com/index.php/2016/01/13/cash-liquidity-crisis-in-libyan-commercial-banks/ (Accessed 15 Sept 2018).
 Pack, Jason (2017). “Libya’s Liquidity Crunch and the Dinar’s Demise: Psychological and Macroeconomic Dimensions of the Current Crisis.” 21 April 2017. US-Libya Business Association. https://www.libyaherald.com/wp-content/uploads/2017/04/Liquidity-Crunch-in-Libya-report-USLBA-210417-LH.pdf (Accessed 15 Sept 2018).
 The Economist Intelligence Unit (2016). “Bank Profits Continue to Shrink.” 30 March 2016. http://country.eiu.com/article.aspx?articleid=1284071912&Country=Libya&topic=Economy&subtopic=Forecast&subsubtopic=Monetary+policy+outlook&u=1&pid=1861011170&oid=1861011170 (Accessed 15 Sept 2018).
 US Department of State. 2011 Investment Climate Statement – Libya. https://www.state.gov/e/eb/rls/othr/ics/2011/157312.htm (Accessed 15 Sept 2018).
 The Economist Intelligence Unit (2016) “Bank profits continue to shrink.” 30 March 2016. http://country.eiu.com/article.aspx?articleid=1284071912&Country=Libya&topic=Economy&subtopic=Forecast&subsubtopic=Monetary+policy+outlook&u=1&pid=1861011170&oid=1861011170 (Accessed 15 Sept 2018).
 The World Bank – Data (2018). Domestic Credit to Private Sector (% of GDP). https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS (Accessed 16 Sept 2018).
 Reuter (2012). “Libya approves Islamic banking law-official.” 17 May 2012. https://www.reuters.com/article/libya-banking-islamic-idUSL5E8GHFKV20120517 (Accessed 15 Sept 2018).
Libya’s minimum wage in 2018 is LD450 (US$325). Overall unemployment was estimated at 17.7 percent in 2017 and even higher for youth—up to 45.96 percent—with most of the unemployed holding university degrees. At least 70 percent of the Libyan working population is estimated to be employed in the public sector while a mere 4 percent are working in the private sector and about 120 000 Libyans are self employed. Owing to the political state of affairs and a disruption in business, the unemployment rate has remained high and the earning capacity of Libyans has continued to decline.
Given the housing shortage, rental chares have escalated beyond the affordability of an average household; a one-bedroom unit in central Tripoli costs between US$400- US$600 per month, while rents for units outside the city centre are estimated at US$376 per month.
Housing for ownership is very difficult to access on the private market due to the limited amount of private land available for purchase and development. As a result, most households in the past would be placed on waiting list for years and stay in poorly serviced informal neighbourhoods until they were able to access a subsidised house from the Libyan government.
 Statista.com. Libya Youth unemployment rate. https://www.statista.com/statistics/812198/youth-unemployment-rate-in-libya/ (Accessed 16 Sept 2018).
 Dr.Dia Sadek Abuhadra and Dr.Tawfik Taher Ajaali.(2014). Labour Market and Employment Policy in Libya, Prepared for European Training Foundation (ETF). https://www.etf.europa.eu/sites/default/files/m/01BE9A2F283BC6B2C1257D1E0041161A_Employment%20policies_Libya.pdf (Accessed 16 Sept 2018). Pgs. 9-32.
Housing in Libya, alongside the provision of free education, transport, and healthcare, has historically been the main responsibility of the government. Public housing with zero percent interest loans was offered to households during Gaddafi’s regime. In the 1970’s, the government’s ambitious programme for housing which sought to address the shortage experienced in the late 1960s was eliminated as there was a surplus from 1973 to 1981. Oil revenue was used to implement Libya’s housing programme in accordance with Gaddafi’s policy to provide houses for all Libyans, as a result of which there were 17 274 residential units in surplus in 1973. The surplus was absorbed annually until 1982 when there was deficit which continued to the present. The shortage is due to onerous administrative procedures, population growth, inadequate expertise of local contractors, legislation that forbids leasing (Act N°4), and a decrease in oil revenue from US$35.69/barrel in 1981 to US$ 11.21/barrel in 1998, in addition to other political issues which caused the decline in the quantity of oil exported and its revenue.
The decline of revenue had a negative impact on the economy, particularly the housing sector. Between 1989 and 1996 the private sector was absent in the housing sector due to unfavourable legislation, and the government continued to play an instrumental role in housing supply. As from mid 1990s, Libya enacted numerous laws and regulations to improve the business climate and attract foreign investors. Libya witnessed the return of foreign investors as a result of favourable business climate coupled with the lifting of UN sanctions in 2003. In 2008, the country started to implement an ambitious housing programme of 396 054 units with facilities.
The Housing and Infrastructure Board (HIB) of the Ministry of Housing and Utilities (MHU) was traditionally responsible for the implementation of public works contracts. HIB works on infrastructure and public building projects, as well as managing the state’s residential projects on a turn-key basis and contracting with both national and multinational firms. At its creation in 2007, HIB was tasked with building 200 000 units. Official figures from the MHU in 2012 indicated that 134 341 housing units were under construction, 94 500 were in their biding phase, and 11 121 had been completed. The entire programme has been on hold since, with an estimated US$11 billion worth of uncompleted housing projects (an estimated 60 000 units) under construction. The largest of this was a US$6 billion contract with China State Construction Engineering Corporation for the Benghazi new town project which comprised 25 000 units. The entire programme was put on hold in early 2011 when the uprising against Gaddafi began. Out of nearly 240 000 housing units contracted, only 11 121 have been completed according to HIB, with another 134 341 under construction and 94 500 still in the biding stage. In 2014, the housing shortage was estimated at 353 139 units, yet there has been a lot of destruction in cities and displacement of people, which will impact upon housing shortage estimates. 
EU-imposed sanctions, which had put restrictive measures on HIB since 2001, were lifted in January 2014. The majority of HIB projects have nevertheless remained unfinished due to the poor security situation. Since 2011, many foreign and local investors involved in housing construction in Libya have been forced to abandon or face interruptions in their work. Efforts to resume have been disrupted by continued insecurity, arguments over payments for delays, and increased cost in the intervening period. This resulted in very limited new supply and an increasing housing backlog. In December 2013, AECOM announced a partnership with HIB worth over US$205 million over a period of 25 months. However the programme is yet to be implemented because of the political instability. Another international firm, Egypt’s Al Abd, halted work on housing projects worth US$102 million in 2015 over ongoing security tensions.
 Shawesh, Ezedin Mohamed (October 2016). “Libyan Policy in the Field of Public Housing.” International Journal of Research Studies in Science, Engineering and Technology, Volume 3, Issue 10. http://ijrsset.org/pdfs/v3-i10/2.pdf (Accessed 23 Sept 2018). Pg. 13.
 Mirza, Abdal (2013). “Feature: Libya US$ 100 billion Housing opportunities.” 20 June 2013. Architect’s Journal. https://www.architectsjournal.co.uk/home/feature-libyas-100bn-housing-opportunity/8649627.article (Accessed 16 Sept 2018).
 Libya Business News (2014). “EU lifts sanctions against HIB.” 20 Feb 2014. https://www.libya-businessnews.com/tag/housing-and-infrastructure-board-hib/ (Accessed 18 Sept 2018).
 AECOM (undated). “Press release: AECOM announces US$209-million contract with Libyan Housing and Infrastructure Board for nation-wide housing, infrastructure development program.” https://www.aecom.com/dach/press-releases/aecom-announced-today-that-it-has-signed-an-agreement-with-the-libyan-governments-housing-and-infrastructure-board-hib-authorizing-work-valued-at-us209-million-over-a-25-month-period/ (Accessed 17 Sept 2018).
After the 1969 coup d’état, approximately 38 000 hectares of land, previously owned by Italian farmers, were confiscated and redistributed among Libyans. These plots have been further fragmented over time, as the traditional inheritance system guarantees each son a part of his father’s land. In 1971, the state confirmed all confiscated land as state land and was involved in further confiscations of uncultivated land and its reallocation to citizens in accordance with what was considered acceptable to fulfil their needs. Ownership is thus difficult to determine.
Since then, Libya’s property market has been influenced by legislation which prevents ownership for leasing purposes. One of the most important laws regarding housing development during Gaddafi’s socialism regime, was Law n° 4 which prevented activities for profit purposes, stopped housing rents, and prevented the private sector from building houses for leasing purposes. As a result, many changes occurred which led to administrative instability; there was high turnover among civil servants, both high level decision-makers and low level implementers. The merger and separation of provinces (administrative districts) was another one of the significant causes of administrative instability which provoked confusion in the local and national housing programmes, hence contractors could not carry out their commitments.
With Decree 21 in 2006, Libya attempted to open its real estate sector and enable foreign investment in real estate. The decree allowed the HIB to contract private and foreign developers for property development. Although foreigners could buy real estate, a lack of clarity on property rights prevented much uptake; and efforts to open the property and real estate markets have been significantly set back due to the sustained post-revolution instability and subsequent investor scare.
Property markets have, since the revolution, been in disarray as many former owners of confiscated land returned to lobby for the reform of property laws and compensation. Draft bills on property were brought before parliament – nevertheless, nothing has been passed due to the political fragmentation and controversy over such reforms. The situation is further complicated by the fact that many properties have been resold since confiscation and property registration records were destroyed in the early 1980s. It is estimated that up to three-quarters of homes in Tripoli might have been formerly confiscated properties.
Until the ambiguity of property rights is resolved, banks will remain reluctant to register property as collateral. The property market is further constrained by difficulties in doing business. Today, there are no procedures in place for obtaining a construction permit, registering property or resolving insolvency, giving Libya a ranking of 185 out of 190 countries in the World Bank 2018 Doing Business report. Corruption is also an issue, with Transparency International‘s 2017 Corruption Perceptions Index rating Libya 171th in the world out of 175 countries.
 World Bank (2018). World Bank Doing Business 2018: Reforming to Create Jobs. http://www.doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/DB2018-Full-Report.pdf (Accessed 20 Sept 2018). Pg. 4.
 Trading Economics (2018). Libya corruption rank. https://tradingeconomics.com/libya/corruption-rank (Accessed 17 Sept 2018).
Policy and Regulations
Libya housing policy and regulation can be classified under three periods after the coup d’état of 1969: 1970 to 1978, 1979 to 1988, and 1989 to 2000.
After the coup d’état, a number of laws were passed to organise the housing sector. The resolution of the Council Leadership Decision for leases gave rights to people and companies to lease property. Law 116 of 1972 gave commercial banks the right to give loans for housing, Law 88 of 1975 stipulated the nationalisation of land, and Law 28 of 1976 reduced loan charges by 30 percent and prevented advance rent.
This period was characterised by immense political and economic changes. Libya adopted socialism as an economic system in 1977. This period was marked by Law 4 which prevented leases and restricted the right of ownership to one house, beyond which property was confiscated. The government thus confiscated all dwellings prepared for lease by the private sector. The confiscated dwellings were transferred or rented to inhabitants who purchased or paid for their property by monthly instalments. By the end of this period, Law 88 was passed in 1988. This law granted the right to practise economic activities, including real estate transactions and rental agreements.
1989 – 2000
After the removal of sanctions, more flexible laws were passed. Law 11 which addresses the possession of real estate was passed in 1992. It was later modified by Law 14 which gave the right to possess more than one house or piece of land suitable for construction.
According to some researchers in the housing sector in the Libyan economy, the policies sought to provide suitable housing for the people of Libya, however some internal and external factors have prevented effective implementation of the policies and led to a gap between the supply and demand for housing.
Post-Gaddafi Libya is still characterised by uncertainty. Once rule of law is restored, there will be a need for reconstruction. Infrastructure and housing should be top priorities in addition to putting in place policies and regulation that encourage the creation of wealth. Regarding housing, the authorities should adopt policies that promote effective development, promote real estate development, protect the population, and empower Libyans to participate effectively in the reconstruction of their country.
 Gamal N. Sheibani, and Tim Havard (2006). “The Reasons For Shortages of Housing In Libya.” http://www.irbnet.de/daten/iconda/CIB_DC26989.pdf (Accessed 23 Sept 2018). Pg.116. Also: Fatallah, N. and Omran, A.N. (2018). “Housing Policies and Strategies in Libya: An Overview.” ACTA TECHNICA CORVINIENSIS- Bulletin Of Engineering, Tome XI(2018) Facicule1 (January-March). https://www.researchgate.net/publication/323116201_HOUSING_POLICIES_AND_STRATEGIES_IN_LIBYA_BRIEF_AN_OVERVIEW (Accessed 20 Sept 2018).
It is estimated by the World Bank that restoring Libya’s infrastructure will cost US$200 billion over the next ten years. A peace settlement in Libya could lead to a rebound in oil outputs and exports which could improve the fiscal deficit and current account imbalances, and allow Libya to address housing shortages and economic development. As projected by the African Economic Outlook, Libya witnessed a significant oil production in 2017 boosting the real GDP growth rate to 55.1 percent. The production of crude oil was at one million bpd in July 2017 – an increase from less than 400 000 bpd in 2016.
Despite the positive economic indicators for 2018, there is still uncertainty for the future. The economic outlook for 2019 depends on the political unity and the extent of improvements in security. However Libya has great potential and opportunities in the areas of infrastructure and housing. Alongside more than US$ 100 billion for housing, there are other sectors of property development which are also of interest, particularly upper standard hospitality outlets, hotels, chalets, and inns for the yet-to-be-developed tourism industry. With its rich heritage, Libya is a land of multiple civilizations, and blessed with natural resources and a young population. Once Libya achieves peace and stability, addressing the chronic housing shortage and providing housing to internally-displaced persons could become a primary state priority.
 World Bank (2016). “Press Release: Economic Effects of War and Peace in the Middle East and North Africa.” 3 Feb 2016. http://www.worldbank.org/en/news/press-release/2016/02/03/economic-effects-of-war-and-peace-in-the-middle-east-and-north-africa (Accessed 18 Sept 2018).