Since 2019, Lebanon is facing one of the most severe economic crises in history. The Lebanese economy reached striking levels of collapsing currency, of very high unemployment levels, and a significant decrease in the GDP growth percentage.

Starting with the inflation, Lebanon experienced one of the highest inflation rates in the world in 2021. As shown in the chart below, the inflation rate in Lebanon was around 150% which is higher than the inflation rate in countries that are facing sanctions and wars like Libya, Iran…

Now analyzing the unemployment rate, the Lebanese economy did not suffer from high unemployment rates even during the global recession in 2009 due to the ability of the Lebanese banking sector in attracting capital. However, the unemployment rate in Lebanon reached historical records since 2019.

If we take a look at the GDP growth percentage per year, it seems that the signs of the crisis started to show early. In fact, this rate dropped from around 10.23% in 2009 to around 0.89% in 2011, and dropped to a negative rate for the first time in the last decade to around -1.7% in 2018. Thus, the GDP growth rate was a sign of what is going to happen. In 2020, an because of the crisis and the pandemic, the growth percentage dropped to a historical rate of -20.1%.

The roots of this crisis are many and vary from internal to external factors. One of these factors is that the Lebanese economy depends on services sector,and does not give priority to productive sectors such as agriculture and industry. In fact, in 2021, the percentage of GDP by sector are 1.4%, 2.76% and 94.15% for agriculture, industry and services sectors respectively. The same difference in percentages is noted for the percentage of employees in each sector.

One of the possible solutions to the Lebanese crisis is focusing on helping the agricultural sector. In fact, if we go deeper into the current situation of the agricultural sector, 65.5% of the Lebanese land is agricultural. However, only 13.23% is arable. This means that there is an interesting opportunity to invest in the agricultural sector in Lebanon.

To address the challenges faced by the agricultural sector in Lebanon, a collaboration between government, private sector and international organizations is needed. Farmers need a better access to financing and loans. They also need more trainings, supportive regulations, and an upgraded infrastructure.
By supporting farmers and empowering the agricultural sector, we can expect several positive expectations. First, the food security will increase, and the Lebanese dependency on imports will be reduced. In addition, the economic growth will be stimulated and job opportunities will be generated which will reduce the unemployment rate. Furthermore, exports will increase and then the country’s trade balance will be improved. Finally, by diversifying the economy, Lebanon will be more stable and less vulnerable to external shocks.