The International Crisis Group reported on Thursday that ongoing insecurity, combined with economic mismanagement, has worsened living conditions in Libya. Misallocation of public funds and excessive spending are draining state finances, which rely almost entirely on oil and gas revenues. Meanwhile, parallel financing mechanisms created by authorities in eastern Libya—through the issuance of unauthorized treasury bonds—have depleted foreign currency reserves, forcing the Central Bank to devalue the Libyan dinar.
The network noted that this devaluation has led to rising living costs and a decline in purchasing power in Libya’s import-dependent economy, with nearly a third of the population struggling to meet basic needs.
According to the report, official data from the Central Bank, the Audit Bureau, and the National Oil Corporation point to widespread and systematic waste of public funds over the past five years, with little tangible benefit for the Libyan people and no serious effort to diversify the oil-dependent economy. The informal division of power between two administrations—both reportedly involved in corruption—may have reduced violence in the short term, but risks fueling instability in the future as public frustration grows.
The report added that estimates vary widely regarding the total cost of this criminal network. According to the Audit Bureau, fuel import costs in 2024 exceeded $9 billion—around 30% of total oil and gas revenues, and a similar share of total annual government spending. Other sources suggest lower figures. As for fuel smuggling, some Libyan and international analysts estimate it generated between $6 billion and $7 billion annually between 2022 and 2024, while the Attorney General provided a more conservative estimate of $1.5 billion per year, according to the network.
