Nexus Relationship Between the Oil and Non-Oil Sectors in Libyan Economy

Dr. Fouzi Salih Faraj

Abstract: Libya is an oil-producing country, and oil occupies a significant position in its economy, as it is a primary and pivotal source of income. Strengthening the positive nexus between the oil sector's activities and non-oil sectors activities is a strategic step toward achieving comprehensive and sustainable economic growth. Hence, this study aims to investigate the nexus between the oil sector activities and non-oil sector activities in the Libyan economy during the period 1997-2019. The data set were tested by using the ADF. At the same time, the Johansen cointegration test and the VEC Granger Causality test are used to estimate the cointegration and causal relationship between the study variables. The findings of this study showed the variables were in the first difference. Likewise, there is co-integration between the study variables. The causality findings show that the non-oil sector activities have a nexus with oil sector activities in the long and short run. These results hopefully will give the decision-maker guidelines to motivate these sectors to participate effectively in the gross domestic product.

Keywords: Oil sector activity, Non-oil sectors activities, VEC Granger Causality, Libya

How to Cite?: Dr. Fouzi Salih Faraj, "Nexus Relationship Between the Oil and Non-Oil Sectors in Libyan Economy", Volume 14 Issue 7, July 2025, International Journal of Science and Research (IJSR), Pages: 889-893, https://www.ijsr.net/getabstract.php?paperid=MR25706013439, DOI: https://dx.doi.org/10.21275/MR25706013439