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Libya

Last updated: February 23, 2023
Libya lies on the southern edge of the Mediterranean Sea, bordering Egypt and Sudan to the east, Algeria and Tunisia to the west, and Niger and Chad to the south. The country is about five times the size of Germany and is home to about 7.1 million people, including about 800,000 immigrants. The capital, Tripoli, is located on the Mediterranean coast in the west of the country. The second largest city, Benghazi, forms the center on Libya’s eastern Mediterranean coast.

The country is a parliamentary republic in transition, headed by a collegial presidential council in which all three of Libya’s historic regions (Tripolitania, Fezzan and Cyrenaica) are represented. Its chairman, former diplomat Mohamed Al-Menfi, was elected in early 2021. Despite the ongoing transition process, tribes and militias outside the greater Tripoli area play an important role. In January 2020 and again in June 2021, at the invitation of the German government in Berlin, key actors agreed to establish political and economic unity in Libya and a national reconciliation process, but this process reached its limits in the summer of 2022 when protests, some violent, erupted against the political process and deteriorating living conditions in the country.

Libya is just one of five Arab countries with which Germany has a foreign trade deficit. In 2022, German imports from Libya exceeded exports by about 3 billion euros. German imports consisted almost entirely of petroleum, while chemical products and machinery accounted for more than 56% of Libyan imports. The EU is the largest buyer of Libyan goods in 2019.
The oil and gas industry dominates the Libyan economy. Libya has the ninth largest proven oil reserves in the world. Structural deficiencies, however, continue to impede sustainable growth. To diversify the economy, the renewable energy sector is being expanded, which is reflected institutionally in the establishment of the Libyan Council for Oil, Gas, and Renewable Energy (LCOGRE) in late 2020. Attractive fields of investment exist in this area, as well as in water and wastewater technology to secure drinking water needs in the densely populated coastal regions and to protect against pollution of the sea and groundwater.
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