Families affected by Libya's crippled economy

Families in Libya’s capital, Tripoli, are struggling to make ends meet as the cost of commodities continue to rise.

The country’s oil dependent economy has been severely affected by the current political crisis and conflict.

The world bank states that the political strife, weak security conditions, and blockaded oil infrastructure continue to constrain the supply side of the economy. Production of crude oil fell to around a fourth of Libya’s potential per day in 2015.

Libya’s economy remained in recession for the third consecutive year in 2015.

Everyone is feeling the pinch including banks as residents choose to keep their money at home.

“The lack of exports from the ports and oil fields is the main reason behind the crippled Libyan economy and has resulted in losses of some $70 billion in the last two years,” said Wahaid Jabbo, an economic analyst based in Libya.

Meanwhile, severe shortages in capital flows at the Central Bank have resulted in a halt in credit lines, so businessmen and merchants have resorted to buying currency on the black market so their businesses doesn’t grind to a halt and to continue to import basic goods.

The World Bank estimates Libya’s GDP to have declined by 10 percent and per capita income fallen to less than US$ 4,500 compared to almost US$ 13,000 in 2012 with inflation strongly accelerating in 2015 driven by high food prices.

Residents of Tripoli said they are feeling the pressure from the price hikes.

“The prices in the market are very high. Everything is more expensive. In the past, one would need 200 to 300 Libyan dinars a month to survive, but now one needs about 1000 and that’s without doing anything,” Ahmed, a resident said.

Another resident, Shaban Al Atweesh added: “Everything is more expensive now, from bread to flour, to oil to tomatoes. Everything is more expensive. What are people with low incomes supposed to do? Are they supposed to beg? Or steal? Expect anything.”

Last week, the foreign minister in the new U.N.-backed national unity government said rival factions have agreed in principle to have one oil organisation for the war-torn country.

Exports from the port have been blocked recently due to a standoff between the rival national oil corporations in the east and west.

Reuters/ Press Agencies_