Measuring the Contribution of Public Revenues to Economic Growth in the Libyan Economy during the Period (2007–2025)

Abstract

    This study investigates the contribution of public revenues namely oil revenues, tax revenues, customs duties, and other public revenues to economic growth, as measured by Gross Domestic Product (GDP), in the Libyan economy over the period 2007–2025. To achieve the study objectives, the Ordinary Least Squares (OLS) econometric approach was employed, and the data were analyzed using the Statistical Package for the Social Sciences (SPSS). The empirical findings demonstrate a strong positive relationship between total public revenues and GDP. Oil revenues were identified as the primary driver of economic growth, underscoring the continued dependence of the Libyan economy on hydrocarbon revenues and highlighting its rentier characteristics. Conversely, customs duties exhibited a negative association with GDP, suggesting that the existing customs framework may constrain economic performance. The results further indicate that tax revenues did not exert a statistically significant effect on GDP throughout the study period, reflecting the limited effectiveness of the prevailing tax policy in promoting economic growth. Although the contribution of other public revenues was relatively modest, these revenues nonetheless exerted a positive and direct influence on GDP. In light of these findings, the study recommends implementing comprehensive fiscal reforms aimed at reducing the economy’s reliance on oil revenues through the diversification of public revenue sources. It further advocates enhancing the efficiency and effectiveness of the tax system, reforming customs policies to facilitate economic activity and trade, and strengthening non-oil revenue streams to improve fiscal resilience. Collectively, these measures are expected to promote fiscal sustainability and support inclusive, long-term economic growth in Libya.