Download Libya Holdings

Libya:
The Opportunities Post-Conflict
February 2012
Libya: The Opportunities Post-Conflict
TABLE OF CONTENTS
Executive Summary ............................................................................................ 10
Country Overview ............................................................................................... 11
Reconstruction ................................................................................................... 13
Economic Overview ............................................................................................14
Figure: Real GDP Growth ......................................................................................................................................................... 14
Figure: Foreign Direct Investment (US$) ............................................................................................................................. 15
Figure: Foreign Direct Investment (% of GDP) ................................................................................................................... 15
Figure: Oil Production ............................................................................................................................................................. 16
Agriculture & Agribusiness ............................................................................. 18
State of the Sector ............................................................................................................................................................ 18
Figure: Arable Land (hectares) ............................................................................................................................................. 18
Figure: Arable Land (% of total land) ................................................................................................................................. 19
Figure: Agriculture (% of GDP) ............................................................................................................................................. 19
Key Players
.................................................................................................................. 21
Libyan Agricultural Research Council .............................................................................................................................. 21
Technofarm International ................................................................................................................................................... 21
Opportunities
..............................................................................................................22
Industry Projections
....................................................................................................22
Figure: Agriculture & Agribusiness Industry Projections ................................................................................................ 22
Banking & Finance .............................................................................................. 23
State of the Sector ........................................................................................................................................................... 23
Key Players
...................................................................................................................24
The Central Bank of Libya ................................................................................................................................................... 24
Gumhouria Bank .................................................................................................................................................................... 24
National Commercial Bank ................................................................................................................................................. 24
Sahara Bank ............................................................................................................................................................................. 24
2
Libya: The Opportunities Post-Conflict
Opportunities
............................................................................................................. 25
Industry Projections
................................................................................................... 25
Figure: Banking & Finance Industry Projections
......................................................................... 25
Food & Drink ..........................................................................................................26
State of the Sector ........................................................................................................................................................... 26
Figure: Cereal Production (metric tonnes) ......................................................................................................................... 26
Figure: Land Under Cereal Production (hectares) ............................................................................................................ 27
Key Players ................................................................................................................... 28
Al Taibat Food Company ........................................................................................................................................................ 28
Ka-Mur Bottling Company ..................................................................................................................................................... 28
Paraskevalides Group ............................................................................................................................................................. 28
Opportunities
............................................................................................................. 29
Industry Projections
.................................................................................................... 29
Figure: Food & Drink Industry Projections .......................................................................................................................... 29
Healthcare & Pharmaceuticals ....................................................................... 30
State of the Sector ........................................................................................................................................................... 30
Figure: Per Capita Health Expenditure (US$) ..................................................................................................................... 30
Figure: Public Health Expenditure (% of total health expenditure) ............................................................................. 31
Figure: Hospital Beds (per 1,000 people) ........................................................................................................................... 31
Key Players ................................................................................................................. 33
Ministry of Health ................................................................................................................................................................... 33
Al-Elmia Company ................................................................................................................................................................. 33
Opportunities
............................................................................................................. 34
Industry Projections
................................................................................................... 34
Figure: Healthcare & Pharmaceutical Industry Projections .......................................................................................... 34
Infrastructure & Construction ......................................................................... 35
State of the Sector ........................................................................................................................................................... 35
Key Players ............................................................................................................................................................................. 36
Alinmaa Holding Company for Real Estate and Construction ............................................................................... 36
Alhadena National Company for Building Materials Industry .............................................................................. 36
3
Libya: The Opportunities Post-Conflict
Libyan Investment and Development Company (LIDCO) ............................................................................................. 36
Opportunities
............................................................................................................. 37
Industry Projections
................................................................................................... 37
Figure: Infrastructure & Construction Industry Projections .......................................................................................... 37
Insurance ................................................................................................................38
State of the Sector ........................................................................................................................................................... 38
Figure: MENA Insurance Industry Structure Indicators ................................................................................................... 38
Figure: Insurance and Financial Services (% of commercial service exports) .......................................................... 39
Figure: Insurance Premiums (as % of GDP) ....................................................................................................................... 39
Figure: Breakdown of Non-Life Premiums ......................................................................................................................... 40
Key Players
...................................................................................................................41
Libya Insurance Company ................................................................................................................................................... 41
Opportunities
..............................................................................................................42
Industry Projections
....................................................................................................42
Figure: Insurance Industry Projections .............................................................................................................................. 42
Oil, Gas & Petrochemicals ..................................................................................43
State of the Sector .......................................................................................................................................................... 43
Figure: MENA Oil Indicators ................................................................................................................................................... 43
Figure: MENA Gas Indicators ................................................................................................................................................. 44
Key Players
...................................................................................................................45
Arabian Gulf Oil Company ..................................................................................................................................................... 45
International Oil Companies ................................................................................................................................................. 45
National Oil Corporation ....................................................................................................................................................... 45
Waha Oil Company ................................................................................................................................................................. 45
Opportunities
..............................................................................................................46
Industry Projections
....................................................................................................46
Figure: Oil, Gas & Petrochemicals Industry Projections .............................................................................................. 46
Real Estate ............................................................................................................. 47
State of the Sector .......................................................................................................................................................... 47
Key Players ................................................................................................................... 48
4
Libya: The Opportunities Post-Conflict
Alinmaa Holding Company for Construction and Real Estate ............................................................................... 48
Arab Union Contracting Company (AUCC) ................................................................................................................... 48
Renaissance Construction ................................................................................................................................................... 48
Opportunities
..............................................................................................................49
Industry Projections
....................................................................................................49
Figure: Real Estate Industry Projections ............................................................................................................................. 49
Retail & FMCGs ..................................................................................................... 50
State of the Sector ........................................................................................................................................................... 50
Key Players ................................................................................................................... 51
Mango ......................................................................................................................................................................................... 51
Marks & Spencer ....................................................................................................................................................................... 51
Turkmall ..................................................................................................................................................................................... 51
Opportunities
..............................................................................................................52
Industry Projections
....................................................................................................52
Figure: Retail & FMCGs Industry Projections ..................................................................................................................... 52
Telecommunications & IT ..................................................................................53
State of the Sector ........................................................................................................................................................... 53
Figure: Mobile and Fixed Line Subscribers (per 100 people) ........................................................................................ 53
Figure: Mobile Subscriptions (per 100 people) ................................................................................................................. 54
Figure: Internet Users (per 100 people) ............................................................................................................................... 54
Figure: Internet Users ............................................................................................................................................................... 54
Key Players
...................................................................................................................56
Libyana ....................................................................................................................................................................................... 56
Libya Telecom & Technology ................................................................................................................................................. 56
Opportunities
..............................................................................................................57
Industry Projections
....................................................................................................57
Figure: Telecommunications & IT Industry Projections ................................................................................................... 57
Tourism & Hotels ..................................................................................................58
State of the Sector .......................................................................................................................................................... 58
Figure: Tourism Arrivals ......................................................................................................................................................... 58
Figure: International Tourism Expenditures (% total imports) .................................................................................... 59
5
Libya: The Opportunities Post-Conflict
Key Players
...................................................................................................................60
Al Enma Tourism Holding Investment Company ............................................................................................................. 60
Al Burdi Tourism and Development ................................................................................................................................... 60
Corinthia Hotel ....................................................................................................................................................................... 60
Libya Expeditions LLC ............................................................................................................................................................. 60
Opportunities
..............................................................................................................61
Industry Projections
....................................................................................................61
Figure: Tourism & Hotels Industry Projections ................................................................................................................... 61
Transport & Logistics ..........................................................................................62
State of the Sector ............................................................................................................................................................ 62
Key Players
...................................................................................................................63
General National Maritime Transport Company (GNMTC) ........................................................................................... 63
Libo Air Cargo ........................................................................................................................................................................... 63
Libyan Airlines ........................................................................................................................................................................... 63
Opportunities
..............................................................................................................64
Industry Projections
....................................................................................................64
Figure: Transport & Logistics Industry Projections .......................................................................................................... 64
MENA-Wide Impact ........................................................................................... 65
Additional Data ................................................................................................... 66
Country Data ....................................................................................................................................................................... 67
Figure: Map of Libya ............................................................................................................................................................... 67
Figure: Social Indicators ......................................................................................................................................................... 68
Figure: Demographics ............................................................................................................................................................. 68
Figure: Economic Forecast ...................................................................................................................................................... 69
Figure: Labour Force ............................................................................................................................................................... 69
Figure: National Income (US$) ............................................................................................................................................. 70
Figure: Gross Capital Formation (% of GDP) ..................................................................................................................... 70
Figure: GDP Per Capita ............................................................................................................................................................. 71
Figure: Manufacturing (as % of GDP) ................................................................................................................................. 71
Figure: GDP By Sector ............................................................................................................................................................. 72
Figure: Trade in Services .......................................................................................................................................................... 73
Figure: External Debt ............................................................................................................................................................... 73
Figure: Current Account ......................................................................................................................................................... 73
6
Libya: The Opportunities Post-Conflict
Figure: Current Account .......................................................................................................................................................... 74
Figure: Foreign Direct Investment Outflows (% of GDP) ................................................................................................ 74
Figure: Inflation ......................................................................................................................................................................... 75
Figure: CPI Inflation .................................................................................................................................................................. 75
Figure: Imports and Exports ................................................................................................................................................... 76
Figure: Goods Imports (US$) ................................................................................................................................................. 76
Figure: Goods Exports (US$) ................................................................................................................................................... 77
Figure: Foreign Trade ............................................................................................................................................................... 77
Figure: Stage of Development ............................................................................................................................................... 78
Figure: Business Constraints ................................................................................................................................................. 78
Figure: Political Risk Summary .............................................................................................................................................. 79
Industry Data ...................................................................................................................................................................... 80
Agriculture & Agribusiness .............................................................................................................................................. 80
Figure: Prices of Key Crops ..................................................................................................................................................... 80
Figure: World Cereals Demand ............................................................................................................................................. 80
Figure: World Meat Demand .................................................................................................................................................. 81
Figure: Arable Land .................................................................................................................................................................. 81
Figure: Arable Land Expansion Potential ........................................................................................................................... 82
Figure: Harvested Areas of Irrigated Crops ......................................................................................................................... 82
Banking & Finance .............................................................................................................................................................. 83
Figure: Top 20 Global Banks .................................................................................................................................................... 83
Figure: Global After-Tax Banking Profits ............................................................................................................................ 83
Figure: Global Investment Rate 1970-2030 ...................................................................................................................... 84
Figure: Global Investment Rate ........................................................................................................................................... 84
Food & Drink .......................................................................................................................................................................... 85
Figure: Multi-National Revenues from Emerging Markets ........................................................................................... 85
Figure: Global Real GDP Growth vs. Food Production ................................................................................................... 85
Figure: Global Retail Sales ...................................................................................................................................................... 86
Figure: M & A Activity ............................................................................................................................................................... 86
Healthcare & Pharmaceuticals ...................................................................................................................................... 87
Figure: Global Pharmaceuticals Market Forecast ............................................................................................................ 87
Figure: Medical Tourism Industry .......................................................................................................................................... 87
Figure: Top 15 Global Pharmaceutical Companies ......................................................................................................... 88
Figure: Figure: Out of Pocket Spending .............................................................................................................................. 88
Figure: Global Population Forecast ...................................................................................................................................... 89
Figure: Impact of Demographic Change on Health Spending ..................................................................................... 89
Infrastructure & Construction ..................................................................................................................................... 90
Figure: Global Steel Consumption Trends ...................................................................................................................... 90
Figure: Global Infrastructure Spending Trends ................................................................................................................. 90
Figure: Global Infrastructure Spending Forecast .............................................................................................................. 91
7
Libya: The Opportunities Post-Conflict
Figure: Lifespan of Infrastructure Assets ........................................................................................................................... 92
Figure: Construction Equipment Outlook ........................................................................................................................ 92
Figure: Share of Construction Spending .......................................................................................................................... 93
Insurance ............................................................................................................................................................................... 94
Figure: Global Premium Growth ....................................................................................................................................... 94
Figure: Emerging Markets Breakdown ............................................................................................................................... 94
Figure: Top 10 Countries by Premiums Volume ............................................................................................................... 95
Figure: Premiums Breakdown ............................................................................................................................................. 95
Figure: Takaful Market Forecast .......................................................................................................................................... 96
Oil, Gas & Petrochemicals ............................................................................................................................................. 97
Figure: Forecasted Energy Demand ................................................................................................................................... 98
Figure: Crude and Non-Crude Oil Supply ....................................................................................................................... 98
Figure: Global Product Demand .......................................................................................................................................... 98
Figure: Global Capacity Requirements ............................................................................................................................. 99
Figure: Energy Use Per Capita .............................................................................................................................................. 99
Figure: World Supply of Primary Energy ........................................................................................................................... 100
Real Estate ............................................................................................................................................................................. 101
Figure: Performance of Property Assets ........................................................................................................................... 101
Figure: Commercial Real Estate Investment .................................................................................................................... 101
Figure: Rental Price Change .................................................................................................................................................. 102
Figure: Global Hotel Transactions ...................................................................................................................................... 102
Retail & FMCGs ................................................................................................................................................................. 103
Figure: Sales Growth and Profitability by Region ...........................................................................................................103
Figure: Sales Growth and Profitability by Segment ....................................................................................................... 103
Figure: Global Retail Sales Growth ..................................................................................................................................... 104
Figure: Global Retail Sales ................................................................................................................................................... 104
Figure: Top 10 Global Retailers ............................................................................................................................................ 104
Telecommunications & IT ............................................................................................................................................. 105
Figure: Internet Structure ...................................................................................................................................................... 105
Figure: Fixed Line Structure .................................................................................................................................................. 105
Figure: Mobile Structure ........................................................................................................................................................ 106
Figure: 3G Share of Global Market ...................................................................................................................................... 106
Figure: International Telecommunications Revenues .................................................................................................. 107
Figure: International Spending Growth by Component ............................................................................................. 107
Tourism & Hotels .............................................................................................................................................................. 108
Figure: Global Tourism Share ............................................................................................................................................... 108
Figure: International Tourist Arrivals by Destination .................................................................................................... 108
Figure: Global Tourism Share ............................................................................................................................................. 109
Figure: Top 10 Global Hotel Groups ................................................................................................................................. 109
Figure: Top 10 Tourist Destinations by Arrivals ............................................................................................................. 109
8
Libya: The Opportunities Post-Conflict
Transport & Logistics ....................................................................................................................................................... 110
Figure: Road Infrastructure .................................................................................................................................................. 110
Figure: Value of Global Transport Industry ..................................................................................................................... 110
Figure: Rail Infrastructure ................................................................................................................................................... 111
Figure: Modes of Transport ................................................................................................................................................. 111
Figure: Market Shares of Key Players .................................................................................................................................. 112
Figure: Trade Lane Growth ................................................................................................................................................... 112
Regional Data ................................................................................................................................................................... 113
Figure: Headline Corporate Tax Rates .............................................................................................................................. 113
Figure: Corruption Perceptions ........................................................................................................................................... 113
Figure: Relative Competitiveness ...................................................................................................................................... 114
Figure: Rule of Law ................................................................................................................................................................. 114
Figure: Comparative Market Indicators ........................................................................................................................... 114
Figure: Comparative Risk Indicator Histories ................................................................................................................ 115
Figure: MENA Labour Force Growth ................................................................................................................................. 115
Figure: Regional Real GDP Growth ................................................................................................................................... 116
Figure: Regional Inflation Rates ........................................................................................................................................ 116
Figure: Five Year Measure of Cumulative Change ........................................................................................................ 117
Figure: Average Number of Procedures to Start a Business ........................................................................................ 118
Figure: Starting a Business Regional Comparison ........................................................................................................ 118
Figure: Tax Payments Regional Comparison .................................................................................................................. 118
9
Libya: The Opportunities Post-Conflict
EXECUTIVE SUMMARY
After 42 years of authoritarian rule and nine months of armed conflict, fundamental political change has come to
Libya. The death of Muammar Qaddafi, the colonel whose rule marked the country’s longest-standing government
to date, triggered a takeover by interim government the National Transitional Council (NTC) on 23 October 2011,
marking the end of the Libyan people’s armed opposition revolt and the formal beginning of the country’s transition to a new political order.
For the past few months, Libya has been slowly emerging from the rubble of civil war, with efforts to reinstitute
political, economic and social order throughout the country. Immediate tasks include establishing and maintaining
security, preventing high crime levels, restarting Libya’s economy, and taking the first steps in a planned transition
to democratic governance.
The NTC, which will remain in power until elections in mid-2012, is currently most concerned with addressing the
volatile security situation which poses major obstacles to the country’s political stability and economic growth.
The NTC is also keen to kick-start the economy, although, as a transitional government, its power to make concrete
economic decisions is decidedly limited. The majority of sectors, aside from major ones such as banking, oil, and
infrastructure, will not see adequate reform until a new government is elected.
The commercial environment began to slowly normalise near the end of the civil war when it became feasible to
interact with local counterparties. Major ports, including Tripoli, have re-opened and are almost fully functional; the
Tripoli airport has also reopened, while regular flights to Benghazi from Jordan, Egypt and Turkey have already commenced. Moreover, in September, the European Union and the United States lifted sanctions on local ports, banks
and energy companies, thus opening the way to re-establishing normal trade and investment links with Libya.
Despite such encouraging steps, the country’s economy is expected to suffer greatly in 2012, with analysts estimating that the country’s GDP growth could decline by as much as 40%. The NTC has been making strides to normalise
and stabilise the country’s economy, particularly in the oil and infrastructure sectors. Oil production has restarted,
and, in the short term, the government is likely to focus its attention on increasing oil production capacity and
repairing damaged infrastructure. Oil, which accounts for 25% of the country’s GDP and 80% of the government’s
revenue, is likely to be the most lucrative and stable industry for the next several years.
As the country stabilises and begins liberalising its markets, a process for which steps were already being taken
under Qaddafi, opportunities in other sectors are likely to emerge. There is an acknowledged need to diversify the
economy and increase quality job opportunities for a growing youth population. Since the NTC is intent on expanding the economy away from an oil-base, in the medium to long term, efforts will be concentrated on strengthening
sectors such as transportation, real estate, healthcare and pharmaceuticals, tourism and insurance.
Currently, several sectors have reached a standstill, as attention has been diverted away from certain projects that
do not directly contribute to re-stabilising the country. At the moment, most state-owned businesses outside of
banks and energy companies are still subject to sanctions imposed by the EU and the US during the war. It is unclear
what exactly will happen to these previously state-owned businesses. Until a new government comes to power in
mid-2012, it is difficult to say with certainty if there will be a move to privatise the majority of national companies,
or if the majority of businesses will remain state-owned. Either way, the new government will be keen to attract FDI
and bolster the economy through liberalisation policies.
Several European, Arab and Asian companies have returned to work in Libya, particularly in the transportation, infrastructure and oil sectors. Overall, the country’s risk profile is improving as political and economic developments
are taking shape, but investors and companies interested in entering the market in the short term should exercise
caution.
10
Libya: The Opportunities Post-Conflict
COUNTRY OVERVIEW
Modern Libyan history is riddled with foreign conquest and rebellion, the most recent of which ended in October
2011, resulting in the death and overthrow of Colonel Muammar Qaddafi. Sprawled across the Sahara desert between Tunisia and Egypt, oil-rich Libya is home to 6.4mn people, who live on a mere 10% of the country’s territory.
After decades of Italian colonisation, Libya was the first country to achieve independence through the United Nations and was proclaimed a constitutional and hereditary monarchy under King Idris.
Under King Idris, significant oil reserves were discovered, effectively turning Libya into one of the richest countries
in Africa. Wealth was largely concentrated in the hands of the elite, and little of it trickled down to the rest of Libya’s
citizens. In an act that mirrors the events of 2011, Libyans, inspired by the political uprisings and calls for Arab unity
in neighbouring countries, began to express grave discontent with the monarchy.
On 1 September 1969, 28-year-old Colonel Muammar Qaddafi led a small group of military officers and staged a
coup d’état against King Idris, who was subsequently exiled to Egypt. Qaddafi would rule Libya as a de facto head
of state under the Revolutionary Command Council (RCC) for the next 42 years. Qaddafi and the RCC pledged to
withdraw all foreign military instalments from the country, promote Arab unity, play an active role in the Palestinian cause and encourage domestic policies based on social justice, non-exploitation and an equitable distribution
of wealth.
In the 1970’s, Libya claimed leadership of the Arab and African revolutionary movements and sought an active role
in world affairs, with the RCC supporting a broad range of foreign militant groups, including the Palestinian Liberation Organisation (PLO) and the Irish Republican Army (IRA). In the late-1970’s, Libyan embassies were renamed as
‘people’s bureaus’, seeking to export Gaddafi’s revolutionary philosophy. This foreign policy and the use of terrorism, as well as a close relationship with the USSR quickly ostracised Qaddafi from the west. The US enforced sanctions in 1986 following the bombing of a Western Berlin nightclub. Two years later, in 1988, Libya was implicated in
the bombing of a Pan Am flight over Lockerbie, Scotland. This led the UN to impose sanctions in 1992. For most of
the 1990’s, Libya was politically and economically isolated.
In the late 1990’s, Qaddafi began to make significant strides in rebuilding his relationship with western countries,
renouncing the use of armed force, ending Libya’s professed weapons of mass destruction program, and accepting responsibility for the Lockerbie bombing. When sanctions were officially lifted in September 2003, Qaddafi
embarked on a series of structural reforms aimed at moving the country towards a market economy. Libya applied
for membership in the World Trade Organization (WTO), reduced subsidies, and increased privatisation measures.
Qaddafi was interested in attracting foreign investment to the lucrative oil and gas sectors: FDI inflows in 2010
amounted to US$ 2.6bn. Qaddafi also began to pursue infrastructure projects such as roads, railways, telecoms and
irrigation in an attempt to modernise and diversify the economy.
By 2010, Libya had the third highest gross national income (GNI) per capita and the highest human development
index in Africa, and enjoyed a GDP growth rate of 4.2%. However, dissatisfaction in the country was festering. Economics played an important role: while oil-rich Libya had billions of dollars in assets, over 30% of the population
lived at or below the national poverty line, and 20.7% of the population was unemployed. Corruption of power in
the private sector, a nepotistic and kleptocratic political system, media and education censorship, frustration with
the welfare system and various human rights abuses further enraged people. Protests against then-President Zine
Al Abidine Ben-Ali in neighbouring Tunisia quickly inspired Libyans to take to the streets themselves.
Small demonstrations in Benghazi and other cities began in the middle of January 2011 over delays in housing unit
construction and political corruption. Large-scale protests, unrest and confrontation began in earnest on 15 February 2011 in Benghazi. The government immediately responded with a harsh crackdown of protestors, injuring 38
people on the first night of clashes alone.
11
Libya: The Opportunities Post-Conflict
Armed protest movements quickly escalated and spread across the country. The protestors themselves were remarkably well organised, and, with the help of army defectors, were able to rapidly take control of Benghazi in the
early weeks of conflict, with Tobruk, Misrata, Bayda, Zawiya, Zuwara, Sabratha and Sorman also falling to their control. The NTC was established on 27 February 2011, with the objective of coordinating resistance efforts between
the various towns under rebel control, and to give a political face to the opposition. The NTC repeatedly called for a
no-fly zone and targeted airstrikes against Qaddafi’s forces.
The international community began to pay special attention to Libya as human rights abuses, including the alleged
bombing of civilians, became increasingly widespread. The possible destruction of Libya’s oil reserves was also of
concern. In March 2011 the UN Security Council agreed to enforce a no-fly zone over Libya, safeguarding the opposition from Qaddafi’s air force. The UN mission was subsequently handed over to NATO. In addition to enforcing
the no-fly zone NATO actively attacked various Qaddafi-owned targets, killing his youngest son and other family
members. In response, the Qaddafi government issued a ceasefire, although it failed to uphold it.
With NATO’s assistance, the rebels were evenly matched with Qaddafi’s forces, resulting in a deadlock that lasted
several months. In August, rebel forces engaged in a coastal offensive and captured Tripoli, although Qaddafi himself evaded capture. Qaddafi remained at large, and on 16 September 2011, the NTC was recognised by the UN as
the legal representative of Libya. Qaddafi was killed on 20 October 2011, when he was caught trying to escape from
Sitre. The NTC declared the liberation of Libya and the official end to the war on 23 October.
12
Libya: The Opportunities Post-Conflict
RECONSTRUCTION
Although Libya is transitioning towards a democratic political system after achieving the immediate objective of
the revolution, the overthrow of Qaddafi, the country’s political climate is marred with uncertainty. Currently, the
main source of risk is the security situation, which represents a major obstacle to political stability, reconstruction
efforts and economic growth. As such, early reconstruction efforts have been aimed at institutionalising law and
order in the country, and building new institutions out of the rubble caused by the civil war.
Libya is currently run by the NTC, which became the political voice for the Libyan people in February 2011. As of 31
October 2011, the relatively low-profile Abdel-Rahim el-Keib is the head of a transitional cabinet. El-Keib is tasked
with implementing the eight transitional and reconstruction provisions laid out in Article 28 of the Interim Constitution. The first task was to move the NTC to Tripoli within one week of the declaration of independence on 26
October. The NTC indeed moved to Tripoli within the designated one-week period.
Secondly, the executive office must be dissolved, and a new interim prime minister is to be elected via secret ballot
by all NTC members. El-Keib was elected with 26 out of 51 votes on 31 October. El-Keib was granted 30 days to form
a government, and, on 22 November, El-Keib unveiled a 24-member council of ministers. This provisional government is tasked with ensuring security, stability and restoration of normal life by providing basic social services, the
return of children to their schools and the payment of overdue salaries.
Thirdly, within 90 days of liberation, the NTC was expected to announce the election laws by which the National
Assembly members will be elected. As of the writing of this report, the NTC had not announced specific election
laws. However, by Article 28, the NTC is required to hold elections within 240 days of liberation to elect the National
Assembly. It is likely that these elections will happen in summer 2012, as the stated aim of the NTC is to form a de
jure interim government based in Tripoli.
The NTC interim government will be dissolved once the National Assembly assumes power. They will have to elect
a prime minister by vote of confidence (who could very well be the current prime minister), draft a constitution,
and present a referendum of the constitution to the Libyan people. Two-thirds of the voting population will have
to approve of the constitution for it to be implemented. General elections will take place after the constitution is
approved, resulting in a new parliament and the dissolving of the National Assembly.
Currently, the NTC is working on creating a stable and secure environment to facilitate the political transformation
as laid out in the interim constitution. Security remains a viable concern since the overthrow of Qaddafi. Osama
al-Juwali, the head of the military council in Zintan, was selected to lead the Defence Ministry. Along with Interior
Minister Fawzi Abdelal, the powerful militia leader from Misurata, it is al-Juwali’s responsibility to disarm and merge
divergent militias from around the country into a united army and a national police force.
A series of clashes among various revolutionary militia in Tripoli in late November and early December 2011 have
increased citizen demands for the NTC to act more decisively to control armed groups. The NTC has demanded that
non-Tripoli based militias leave the capital, and most observers expect that the Ministry of Defence and Ministry
of Interior will become more involved in the process of managing relations among militias, removing heavy weaponry from civilian hands, and finding recruitment or demobilization pathways for armed volunteers. Al-Juwali has
signalled his intent to reorganise military councils and integrate 50,000 fighters into the national security forces.
The NTC has also been tasked with repairing damaged infrastructure around the country and reinstating the production of oil, in order to boost the economy. The NTC is in talks with foreign countries, including Russia, Italy, Egypt
and Tunisia, to begin repairing the untold amount of infrastructure damage. Oil production was reinstated in September, and has been moving towards full on-shore pre-war production levels, effectively increasing the stability
of the economy.
13
Libya: The Opportunities Post-Conflict
ECONOMIC OVERVIEW
Libya has some of the most plentiful oil reserves in the world, and the economy primarily depends on export revenues from the oil sector. However, massive oil reserves could not guarantee political stability in the country, and
social unrest in late February 2011 escalated into a bloody civil war. Qaddafi’s refusal to step down amidst calls for
his dismissal resulted in a prolonged conflict that subsequently crippled the economy. Oil output and most formal
business operations have been at a standstill since. A nation-wide credit squeeze forced banks to shut down and
foreign investors, diplomats and tourists fled the country. As such, Libya’s GDP, which totalled US$ 79.2bn in 2010
with a growth rate of 4.2%, is expected to decline by as much as 40% in 2011 (see figure). The recovery of Libya’s
current economy is dependent on the stabilisation of the political and security situation.
Real GDP Growth
Source : Oxford Economics
Libya’s economy under Qaddafi’s 42-year rule was tumultuous, although things had gradually improved after international sanctions were lifted in 2003. Sanctions were imposed in 1992 after Libya was implicated in the bombing of a Pan Am flight over Lockerbie, Scotland. In 2003, Libya embarked on structural reforms aimed at moving
towards a market economy, including applying for membership of the WTO, reducing subsidies and increasing
privatisation.
Once a pariah of the west, Qaddafi began to aggressively seek out multi-national companies to increase foreign
direct investment (FDI) in the oil and gas sectors. By 2010, FDI inflows to Libya amounted to US$ 2.6bn (see figures
below). The government also pursued infrastructure projects such as roads, railways, telecoms and irrigation to try
to modernise the economy. In an attempt to diversify the oil-based economy, Qaddafi promoted the production of
petrochemicals, iron, steel and aluminium. While some progress was made, the economy remained largely statecontrolled and under-diversified.
14
Libya: The Opportunities Post-Conflict
Foreign Direct Investment (US$)
2,000,000,000
2,000,000,000
1,500,000,000
1,500,000,000
1,000,000,000
1,000,000,000
500,000,000
500,000,000
0
0
-500,000,000
-500,000,000
-1,000,000,000
-1,000,000,000
-1,500,000,000
-1,500,000,000
-2,000,000,000
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
-2,000,000,000
Source : Trading Economics
Foreign Direct Investment (% of GDP)
8
8
6.53
6
6
4.41
3.65
4
4
2.74
2.36
2
0.73
0.42
0.59
2
1.07
0
0
-0.47
-2
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
-2
Source : Trading Economics
15
Libya: The Opportunities Post-Conflict
As the head of the NTC, Abd el-Rahim el-Keib is not only charged with ushering in a new period of democracy and
stability to Libya, he must also boost the ailing economy. It is likely that the el-Keib and the NTC will largely concentrate on stabilising the economy and returning it to pre-war levels; the interim government is not expected to
make any major economic decisions for the next eight months. Indeed, the interim government does not have the
mandate to enact any major economic reforms, as this will be left to the newly-elected government.
The long term plan of Libya’s government is to entirely revamp the economy, which, under Qaddafi, was a mix of
oil-based socialism, capitalism, paternalism and nepotism, with no clear direction or goals. The NTC wishes to build
a sustainable economy that has a powerful private sector and is not entirely dependent on natural resources. The
NTC also wants to open the country up to FDI in order to create a much more fluid economic system going forward.
The interim government, however, cannot escape the fact that oil remains the most profitable sector in the industry, hence garnering the most interest from foreign investors. Stability, security and a fully-functioning oil sector
must be realised in the short-term to establish trust with new and established investors alike. As such, one of the
first steps taken has been to normalise the commercial environment, which will facilitate economic transactions
with local and foreign parties.
All major ports, including Tripoli, have re-opened and are almost fully functional, as is the Tripoli airport. The central
banks that shut down during the civil war are all operating as well, and all non-corrupt pre-existing contracts with
foreign firms will be respected. Moreover, the monetary authorities have authorised local banks to issue letters of
credit. Oil is likely to remain Libya’s most lucrative sector, as the country has the largest oil reserves in Africa and
the ninth largest in the world. The oil sector contributes about 98% of export earnings, 25% of GDP, and 80% of
government revenue. During the unrest, oil exports dropped by 70%, but the oil sector looks poised for growth in
the coming months and years.
Prior to the civil war, Libya produced 1.7mn barrels of crude oil per day (bpd). A spokesman from the Organisation
of Petroleum Exporting Countries (OPEC) announced that Libya is expected to return to pre-war production levels
by the middle of 2012 (see figures). Indeed, by November 2011, Libya was already producing 600,000 bpd, with
200,000 more bpd added by the end of 2011. Despite a promising start, a return to 2010 account surpluses is not
expected until 2013.
Oil Production
Source : D & B
16
Libya: The Opportunities Post-Conflict
At the 20th Annual Petroleum Congress in Doha, Libya announced that its production plan would be to produce
1.3mn bpd by the end of Q1 2012, and 1.57mn bpd by the end of Q2 2012. Revenue from oil production for 2011
and 2012 will likely be recycled into healthcare, infrastructure and education projects. Indeed education, which was
weak under Qaddafi, is poised to become one of the most important social projects moving forward. The education
system needs to be revamped so that Libya will have the capacity suited to building a modern economy.
The NTC will also have to rely heavily on the country’s US$ 65bn sovereign wealth fund and US$ 170bn assets fund
to finance post-Qaddafi reconstruction. Until very recently, the NTC was unable to access the majority of these
funds, including US$ 29.5bn in cash reserves. The EU, UN and US had imposed targeted sanctions against Qaddafi
in March 2011 and only began lifting restrictions in mid-December. Deputy Prime Minister Mustafa Abu Shagour
said the new cabinet’s priority was to obtain the release of the assets. Indeed, Libyan authorities created a committee to work with the United Nations and its specialist agencies to free the funds.
On 16 December 2011, the UN Security Council ordered the assets of two Qaddafi-owned banks to be unfrozen,
effectively returning more than US$ 40bn to Libya. Soon after, the US government announced that they had rolled
back most sanctions against Libyan banks, freeing up more than US $30bn in assets. Britain, which holds about US$
37bn of assets, announced in early December that it will unfreeze the assets once Libyan authorities have demonstrated that they can be effectively managed. A week later, however, Foreign Secretary William Hague said his
government was seeking swift EU action to pass the regulations required to release these frozen assets.
While Libya is currently in a fragile state of transition, Libyan officials and international analysts seem optimistic
about the economic future of the country. Long-term plans to diversify the economy, and short-term goals of opening the doors to FDI will be translated into countless potential business opportunities looking forward.
17
Libya: The Opportunities Post-Conflict
AGRICULTURE & AGRIBUSINESS
State of the Sector
After oil and gas, agriculture is the second largest industry in Libya. With only 1.3% of arable land, low rainfall, unfavourable climatic conditions and poor soil quality inhibiting farming outputs, the gap between industries clearly
illustrates the country’s lack of economic diversification (see figures).
Arable Land (hectares)
2,050,000
2,050,000
2,000,000
2,000,000
1,950,000
1,950,000
1,900,000
1,900,000
1,850,000
1,850,000
1,800,000
1,800,000
1,750,000
1,750,000
1,700,000
1,700,000
Jan/68
Jan/76
Jan/84
Jan/92
Jan/00
Jan/08
Source : Trading Economics
Agriculture accounted for 2.6% of GDP in 2010, with an annual growth rate of 6.1% and the country remains heavily
dependent on imports for most of its food source (see figure). While domestic conditions limit the output of agriculture, an escalation in population coupled with income growth have increased food consumption. Overall, Libya’s
domestic food production is able to match only 25% of demand.
18
Libya: The Opportunities Post-Conflict
Arable Land (% of total land)
1.15
1.15
1.1
1.1
1.05
1.05
1
1
0.95
0.95
Jan/68
Jan/76
Jan/84
Jan/92
Jan/00
Jan/08
Source : Trading Economics
Agriculture (% of GDP)
5.5
5.5
5.2
5
5
4.34
4.5
4.5
4
4
3.5
3.5
2.99
3
2.5
1.99
2
1.5
3
2.34
Jan/02
Jan/04
Jan/06
2.08
2.5
1.87
Jan/08
2
1.5
Source : Trading Economics
19
Libya: The Opportunities Post-Conflict
While agricultural conditions are likely to remain harsh due to Libya’s geographical location, around17% of the
Libyan population is employed in this sector; a surprisingly high number considering the small amount of products
produced domestically. The government first began paying special attention to the agriculture industry when halting desertification due to low rainfall became a serious issue. Under Qaddafi, advisory agreements with other arid
countries such as Australia were in place to help Libyan farmers boost their agricultural output.
Libyan agricultural products include wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans, as well as
cattle. Libya’s primary agricultural water source remains the US$ 25bn Great Manmade River Project, but significant
resources are being invested in desalinisation research to meet growing water demands. Bolstering irrigation infrastructure is a key concern as agriculture accounts for approximately 78% of national water usage.
Libya commands 1,800 kilometres of Mediterranean coastline and, although the area is not as rich in plankton as
some neighbouring countries, the country still enjoys substantial marine life, with plentiful sardine and bluefin
tuna fish crops. Fishing contributes negligibly to total agricultural GDP, standing around 10% in the 1990’s, and
employs about 1% of the workforce.
Despite low production, fishing was encouraged under Qaddafi and the government attempted to stimulate demand by constructing a fishing port in Zuwara, building ice plants at coastal sites and signing joint fishing agreements with several countries, including Tunisia and Spain. Overall, however, low investment in fishing boats, ports,
and processing facilities remained obstacles to growth.
Currently Libya has one major fishing port in Zliten, one tuna plant and two sardine factories with small processing capacities of 1,000 metric tonnes per year. Despite slow growth under Qaddafi, the NTC seems determined to
bolster the fishing industry in Libya. On 6 September, 2011, officials gathered to celebrate the opening of a new,
modern, wholesale fish market complex, complete with a medical observation laboratory to test the fish. The first
of its kind in Libya, plans are currently underway to open more of these types of markets along the coast: a telltale
sign that the NTC is actively interested in the development of the maritime economic sector and the possibility of
creating thousands of new jobs. Indeed, the General Authority of Maritime Wealth has already begun to focus on
establishing modern infrastructure for the fishing sector.
Two major projects are already in the works in Tripoli and Zawia. The US$ 68mn Tripoli project includes a marina
large enough for 400 small fishing boats, 50 large fishing trawlers and 15 overseas fishing boats. Ideally, this would
produce 10,000 tonnes of fish every year and provide 4,000 job opportunities for Libyan citizens. A similar project
is slated for Zawia. This US$ 30mn project is estimated to provide more than 1,000 job opportunities. It will also
provide berthing places for 200 fishing units and 15 cranes.
Agriculture is likely to be a medium-term priority for the NTC. Under Qaddafi, there was no Minister of Agriculture
per se; projects and policies were reviewed by a General Inspector. In November, the NTC elected Abdul Hamid
BuFruja as the country’s Minister of Agriculture. Recently, Libyan partners representing the Libyan Agricultural Research Council and Ministry of Agriculture requested the support of the International Center for Agricultural Research in the Dry Areas (ICARDA) leadership in an assessment of the current state of the country’s national research
and extension system for agriculture, and to provide assistance to rebuild where needed.
20
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Libyan Agricultural Research Council (LARC)
Located in Tripoli, the LARC is dedicated to finding solutions to agricultural problems in Libya. The organisation
conducts research on agricultural science, agronomy, crop physiology, crop science, horticulture, plant protection,
breeding genetics and pathology, soil and environmental sciences, animal science, forestry, marine lives and utilisation science of agricultural resources in the country. Six times a year, the Council publishes an international
research journal called the Libyan Agriculture Research Centre Journal International (LARCJI).
Technofarm International
A consortium of European and Egyptian agricultural companies, Technofarm International develops and manages
farms in Libya. The company’s stated main purpose is to utilise the water resources provided by the Great Man
Made River Project (GMMRP) in an efficient and productive manner in order to increase the amount of Libyan-made
food crops on the domestic market. When setting up a new farm, Technofarm develops the farm infrastructure, including the irrigation, civil works, farm machinery and other requirements. They invest their own funds to provide
the necessary seeds, fertilisers, technology, labour and management to produce the crops. After harvest, these
crops are sold on the Libyan market and all proceeds are shared with the Great Man Made River Utilization Authority. Technofarm has been operating since 2002 and is currently building or managing 20,000 hectares of irrigated
farmland in four locations in Libya. Crop production includes wheat barley, oats, corn, potatoes, alfalfa and grass
hay, table grapes, olives and several fruit tree crops such as peaches, pears and apricots.
21
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• Because of Libya’s harsh climate and small freshwater reserves, it is unlikely that land agricul-
ture will be emphasised in the coming years. Instead, it seems that opportunities will be found
in the fishing industry.
• Looking forward, investment in infrastructure will be the top priority for the government. Al-
though deadlines are not set for the fishing projects in Tripoli and Zawia, Libya is in dire need of
new jobs and cash. In the medium to long term, the country will also benefit from a diversified
economy. Subsequently, foreign investment in construction of ports and processing facilities, as
well as sales of boats, cranes and trawlers are likely to be profitable ventures in the coming years.
• Construction and infrastructure firms specialising in irrigation will also see opportunity in the
agriculture sector, as the Libyan government looks to increase irrigation in the medium term.
PROJECTIONS
Agriculture & Agribusiness Industry
Sector Contribution to
GDP (%)
2012
2013
2014
2015
2016
2.9
3.07
3.25
3.44
3.65
Source : Noozz
22
Libya: The Opportunities Post-Conflict
BANKING & FINANCE
State of the Sector
Libya’s banking and finance sector is slowly emerging from the debris of the civil war. In recent years, Libya’s banking and finance sector had enjoyed an increased period of profitability, in part due to higher interest rates on central bank instruments and better intermediation margins. Libya was largely shielded from the global financial woes
of 2008 and banks were focusing on improving their competitiveness in anticipation for the entry of new foreign
players.
Capital adequacy ratio within the sector has increased substantially in recent years, from 10.1% in 2008 to 15.6%
by the end of 2009. Total banking assets increased by 16.1% to US$ 42.1mn in the end of Q3 2009. The ratio of estimated banking assets to GDP is 50% and the sector is currently served by 16 domestic banks. The largest four, Al
Umma Bank, Sahara Bank, National Commercial Bank and Gumhouria Bank, dominate the sector. Collectively, these
banks constitute nearly 90% of the country’s banking sector assets.
Since 2005, with the passage of the banking law, the Central Bank of Libya (CBL) has been implementing a gradual
liberalisation process of the entire banking system with the aim of restructuring and modernising the commercial
banks. The CBL law shifted the central bank’s focus away from ownership of domestic banks towards supervision
and monetary policy. Several up-and-coming banks, including Wafa Bank and the United Bank of Libya, have benefitted from the process of liberalisation. These banks have been at the forefront of rolling out retail banking services
and upgrading their networks. Under Qaddafi, the goal was to liberalise the entire system by 2011, although these
goals were stunted by the outbreak of civil war.
Liberalisation is still being prioritised under the NTC, and the transitional council is interested in bringing shariabased finance to the country. Indeed, Libya has been taking concrete steps towards introducing sharia-compliant
banking in the country. The CBL and the NTC are looking to finalise Islamic banking regulations by as early as March
2012. The government is expected to add a new chapter to the banking law of 2005, regulating Islamic banking.
Once the law is approved, Islamic banks will be given licences to operate alongside conventional banks.
Currently, the major concern for the banking and financial sector is restoring liquidity into the system. The ratio
of liquid assets to total assets stood at 78.8% in 2009. Dinar reserves were diminished when Qaddafi’s entourage
seized US$ 2.4 to US$ 3.2bn from the CBL. The problem was further exacerbated by civilians withdrawing US$ 5.3bn
during the conflict. The CBL has been working on injecting cash into local banks by printing US$ 4.6bn, US$ 230mn
of which was delivered on 24 December 2011. The recent unfreezing of Libyan foreign assets by the UN Security
Council has assisted the CBL, giving the bank immediate access to US$ 6-7bn of the country’s US$ 168bn assets.
The CBL is also introducing new prints of the new currency (one, five, and ten dinar notes), which will begin circulating in early 2012. At the time of writing this report, no policies had been formulated on whether or not to grant
foreign banks access to the Libyan market. The Central Bank’s deputy manager has stated that this will depend on
the economic planning by the cabinet.
23
Libya: The Opportunities Post-Conflict
KEY PLAYERS
The Central Bank of Libya (CBL)
Established in 1956 and headquartered in Tripoli, the Central Bank of Libya (CBL) is the sole monetary authority in
the country and operates as an autonomous corporate body. The stated objective of the CBL is to maintain monetary stability in the country and promote the sustained growth of the economy. The CBL oversees 16 major banks
in Libya, including the Agriculture Bank and the Libyan Foreign Bank. Under Qaddafi, the CBL was undergoing a
major overhaul as banking regulations were being brought up to international standards and the bank moved
away from ownership of domestic banks. The last bank governor under Qaddafi was Farhat Bengdara; he resigned
and defected to the rebels in March 2011 after first arranging for the bulk of external Libyan assets to be frozen and
made unavailable to the regime. In September 2011, Gasem Azzouz was appointed as governor of the CBL. The CBL
is also in the process of developing new banking laws in the wake of Qaddafi’s fall from power.
Gumhouria Bank
Majority owned by CBL, Gumhouria is the larger of Libya’s two public banks and the market leader with a 42% share.
In April 2008, CBL decided to merge the then fifth-largest Gumhouria with the state-owned Al Umma Bank, as part
of the country’s banking modernisation programme. Following the merger, the partially-privatised Gumhouria became the largest bank in terms of total assets in Libya. Gumhouria is also the fifth largest bank in North Africa. In Q1
2010 the bank posted a net profit of US$ 70.3mn with total assets of US$ 17.5mn.
National Commercial Bank
NCB was established in 1970. In 2009, the bank had a paid-up capital of US$ 377mn. End of year profits for 2008
reached US$ 66mn, almost double the figure from 2007. Between December 2008 and June 2009 its deposits increased by US$ 1.8bn. In 2010, NCB was working on diversifying its revenue stream in favour of commissions and
fees, which rose from US$ 13.5mn in 2007 to US$ 24.7mn in 2009.
Sahara Bank
Founded in 1964, Sahara Bank is the second largest public bank in Libya, in terms of assets, deposits and loans, with
market shares of 19%, 19.1% and 15.3% respectively. In 2007, Sahara became the first financial institution in Libya
to enter a partnership with a foreign firm, BNP Paribas. The company has 48 branches across the country, and a
staff of 1,500 people. Originally owned by the Central Bank of Libya, shares in Sahara were owned by the EDSF until
the collapse of the Qaddafi government. Sahara is known for its well-diversified loan portfolios and conservative
provisioning policies, although, prior to the war, the bank was looking to expand and diversify its offerings. In 2010,
analysts estimated that Sahara Bank will foresee a strong increase in interest revenue as it expands its corporate
loan profile. It was also anticipated that Sahara would begin to put a special focus on retail banking and consumer
finance, two largely underserved segments in Libya.
24
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• New retail banking products have been rolling out onto the Libyan market in the last few years.
One attractive niche is consumer finance, which, in recent years, has been largely overlooked
by larger banks. Foreign banks with experience in customer-related services have a competitive
edge.
• Competitively-priced overseas money transfer services are an untapped market. With an increasing number of Libyans temporarily or permanently moving overseas, largely for economic
reasons, this niche market is full of potential.
• The implementation of sharia-compliant banking will provide numerous opportunities for Islamic banks.
PROJECTIONS
Banking & Finance Industry
2012
2013
2014
2015
2016
Capital Adequacy Ratio
(%)
23.24
26.86
31.05
35.89
41.48
Total Banking Assets
(US$ mn)
56.73
65.86
76.46
88.77 103.06
Source : Noozz
25
Libya: The Opportunities Post-Conflict
FOOD & DRINK
State of the Sector
Arriving at a satisfying description of the food and drink sector in Libya is challenging due to a lack of in-depth and
recent data. What is clear is that food processing’s share in Libya’s economy is not very important in the context of
the agricultural sector as a whole. Due to Libya’s limited agricultural output, between 75% to 80% of the food and
drink is imported into the country. The value of the country’s agri-food products exports is insignificant and accounted for less than 0.6 % of total exports from 1998 to 2001.
A unique characteristic of Libya’s restaurant, retail and processed food and drink industries is the nationalisation of
international brands in the Libyan market. Under Qaddafi’s regime, foreign brands such as Coca-Cola and Pepsi Co.
and international franchises such as Pizza Hut and others, were present but were required to alter signature brand
names in order to do business in the Libyan market. Food brands were granted business rights only after adapting
to Arabised versions of their brand names. This distinction served as a reinforcement of Qaddafi’s vision of an Arab
republic free from western influence. Such retail hurdles are part of what has made the Libyan food and drink retail
market unique for the past several decades. Moving forward, regulations are expected to change drastically as the
market shifts, and it is expected to open up further to multi-national retail concepts and branded products once
the new government is in place. Indeed, the long-isolated country is set to see an explosion of demand for the food
and drink products, fast food restaurants and cafes long enjoyed by more open regional neighbours such as Egypt.
Libya relies heavily on imports for sugar and edible oil products. Until 1995, there were no industrial units for the
extraction of sugar. Several cereal storage and conservation silos have been erected throughout the country since
the 1960’s. Cereal mills currently exist in Tripoli, Sebha and Zliten, producing several hundred tonnes of cereals per
day. Several mills have been built in the past three decades to produce animal fields, and an infant food manufacturing unit was started in the 1980’s. All of the existing mills and mixing units are in or around Tripoli and mostly use
the imported raw material due to negligible domestic cultivation of cereals (see figures). Notably, these facilities do
not satisfy all the country’s needs, especially in terms of demand for wheat flour and semolina.
Cereal Production (metric tonnes)
235,000
235,000
230,000
230,000
225,000
225,000
220,000
220,000
215,000
215,000
210,000
210,000
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
26
Libya: The Opportunities Post-Conflict
Land Under Cereal Production (hectares)
400,000
400,000
380,000
380,000
360,000
360,000
340,000
340,000
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
The fruit and vegetable conservation and transformation sub-sector is the most important of the food processing
sector. There are about 20 such units in the country that were built, owned and initially run by the government,
although nearly all have since been privatised. These units transform local produce, about 18,000 tonnes of citrus
(mostly for juice and pulp) and about 1,500 tons of table olives and vegetables per year, but for the most part use
imported fruits and vegetables. In the early 2000’s, Libya imported around US$ 25mn worth of fruits and vegetables
annually. Average olive oil production is estimated at about 7,000 tonnes with very little fluctuation. The existing
extraction units use modern equipment. Libya imports most of its edible oil needs. From 1999 to 2002, the country
imported about one million tons of olive oil for US$ 12mn.
There are no meat transformation units in Libya. The prevailing meat treatments are the local and traditional and
methods of seasoning and sausage making. There are several raw milk collection centres affiliated with industrial
units that treat mostly imported powder milk into cream, yoghurt, and some cheeses. The limited number fish
processing units exclusively deal with conservation by refrigeration and freezing. Other existing units in Libya deal
with coffee and spice preparations.
The import / export balance is likely to remain unchanged in Libya for the coming years. Climate and limited agricultural output are constant factors, and the food and drink industry is not one that the government will focus on
in the short to medium term. Libya does ban the import, sale and consumption of all alcohol products, with heavy
penalties for offenders. It is unknown if Libya will relax these laws in the future as it attempts to build its reputation
as a touristic destination.
27
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Al Taibat Food Company
Al Taibat Food Co. was established in 2000 in Benghazi. The company produces canned foods. The factory is
equipped with three lines of production, specialising in canned legumes, olives and juices.
Ka-Mur Bottling Company
United Kingdom-based Ka-Mur Bottling Company is the franchise holder for Coca-Cola in Libya. Coca-Cola was first
introduced into Libya in the 1990’s through Libya distributor Al Fursan, which obtained stock from Tunisian bottling plants to sell on consignment in the Libyan market. The Qaddafi family is thought to have played a central role
in setting up domestic bottling operations through Ka-Mur. An alleged dispute over Coca-Cola operations in the
country between Qaddafi’s sons was detailed in a 2006 diplomatic cable released by Wikileaks. The dispute resulted
in a long term shutdown of operations at the Tripoli bottling plant. Operations were resumed at full capacity in April
2011. Given the strong links between Coca-Cola and the Qaddafi family in Libya, the future of Ka-Mur’s operations
remain in the balance.
Paraskevalides Group
The Cyprus-based, which has the same major shareholders as publicly-listed company Andreou & Paraskevaides
Enterprises PCL (A & P), launched the first domestic Pepsi bottling plant in Libya in September 2003. The company
has expanded operations to include a bottling facility in Benghazi. Operations were hit hard during the unrest, but
Libya remains one of PepsiCo’s most important markets in North Africa.
28
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• Opportunities remain in the import market in Libya. With a population expected to double by
2025, a steady increase in food goods, particularly cereals, oils and sugar will be necessary.
• The food processing industry is in need of expansion and modernisation; opportunities to es-
tablish facilities to manufacture branded food and drink end products are set to take off as local
consumption rises.
• As Libya begins to liberalise its markets and open itself up more to foreign companies, plentiful
opportunities will exist for franchises and multi-national producers to establish operations in
the country.
PROJECTIONS
Food & Drink Industry
2012
2013
2014
2015
2016
Agri-Food Contribution to
Total Exports (%)
0.6
0.6
0.6
0.6
0.6
Food and Drink Imports
(%)
80
80
77.5
75
75
Source : Noozz
29
Libya: The Opportunities Post-Conflict
HEALTHCARE & PHARMACEUTICALS
State of the Sector
Qaddafi’s socialist-oriented policies and large reserves of oil wealth enabled him to create a reasonably comprehensive healthcare system. Monetary spending on the Libyan healthcare system is high in terms of African countries, but remains low compared with other oil-rich countries of similar income, such as Saudi Arabia. In 2007, Libya
spent 3.3% of GDP on healthcare. When adjusted for purchasing power differences across countries, this amounts
to just US$ 222 per person per year (see figure).
Per Capita Health Expenditures (US$)
500
500
458.03
150
150
416.75
400
400
350
350
332.55
300
300
250
250
235.44
217.25
200
200
Jan/06
Jan/08
Jan/10
Source : Trading Economics
In Libya, there is a mixed system of public and private health care, as opposed to a purely state-run model, although
the public health sector is the main provider of health services (see figure). Healthcare, including preventive, curative and rehabilitative services, are provided to all citizens free of charge by the public sector and almost all levels
of health services are decentralised. Healthcare is delivered through a series of primary healthcare units, centres,
polyclinics, rehabilitation centres, general hospitals in urban and rural areas and tertiary care specialised hospitals.
Basic health status indicators for Libya are mixed. Life expectancy and health-adjusted life expectancy are among
the best in the Middle East North Africa (MENA) region at 73 and 64 years respectively. On the other hand, maternal,
neonatal and infant mortality rates, 51 per 100,000 live births, 11 per 1000 total births and 24 per 1000 live births
respectively, are on par with MENA rates, but lag behind the averages in Organisation for Economic Cooperation
and Development (OECD) member countries. The country has achieved high coverage in most basic health areas.
Immunisation records are particularly strong: in 1999, 97% of one-year old children were vaccinated against tuberculosis and 92% against measles.
30
Libya: The Opportunities Post-Conflict
Public Health Expenditure (% of total health expenditure)
72
72
70.32
70
70
68
66
64.59
68
66.15
65.88
66
64.76
63.54
64
64
63.05
61.78
62
62
61.05
60
58
60
58
57.21
56
56
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
A growing private health sector is emerging, although it currently has a limited role. The government has decided
to encourage the expansion of private clinics and hospitals, with greater hospital bed capacity (see figure).
Hospital Beds (per 1,000 people)
4
4
3.9
3.8
3.8
3.7
3.7
3.7
3.6
3.6
3.4
3.4
3.4
3.2
3.2
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
31
Libya: The Opportunities Post-Conflict
Additionally, serious attempts are being made to introduce the family physician practice along with the necessary
rules and regulations. Health insurance has recently entered the insurance market, although penetration remains
low at 0.3%. All charges for the private sector are out-of-pocket due to the underdevelopment of the health insurance market. The private sector is small and growing, but caters mostly to the wealthy local population and workers
in the oil industry. Primary and basic secondary care is provided through 431 outpatient clinics and 84 inpatient
clinics, with a bed capacity of 1,361. For more serious procedures, Libyans travel abroad for treatment in Tunisia,
Jordan, and Egypt or Europe. In total, the Qaddafi government spent US$ 47.8mn annually for medical treatment
of Libyan citizens abroad.
The pharmaceutical sector under Qaddafi was largely underdeveloped and suffered from an inappropriate management of drug supply and distribution, according to the World Health Organization. Medicine registration, selection, procurement and distribution were all ineffectively managed and occasionally unsafe. Transparency, which is
integral to ensuring sound performance in the pharmaceutical sector, was largely nonexistent. Since the collapse
of the Qaddafi government, the NTC has been working diligently to modernise and expand the health and pharmaceutical sectors. During the war, hospitals around the country were understaffed, overwhelmed, and short on
medical supplies. In recent months, hospitals and clinics have become less vulnerable, as the NTC has emphasised
restoration. In late November, Fatima Hamroush was appointed as the country’s Minister of Health to deal directly
with the country’s health and pharmaceutical sector.
In the beginning of January 2012, Hamroush began ongoing talks with the Ministry of Economy, the Chamber of
Commerce, and the Medical Association of Pharmacists. In subsequent meetings, the control of medicines and
regulation by the Customs Department, identification and standardisation of medicine prices, quality and validity
of drugs on the market, the development of a medicine and pharmaceutical bulletin in Arabic, and the development of appropriate solutions for the wholesale market will be discussed.
In the next few weeks, similar meetings will be held between the Ministry of Health, Ministry of Economy, the
Pharmacists Syndicate and the Society of Libyan Pharmaceutical Sciences. These talks will focus on quality control
and practice within the pharmaceutical profession. Pharmaceutical organisations within Libya are expected to be
recorded and subject to inspection. The overall goal of these talks is to create a quality control mechanism that will
match the full technical specifications of European and American drug companies as approved by the Ministry of
Commerce.
Collaboration with foreign health and pharmaceutical companies is currently being stressed. The NTC is particularly
interested in increasing health infrastructure, which is limited in the country. Hamroush has been in contact with
several foreign ministries, including Malta and Italy, to discuss the construction of three new hospitals with modern
equipment. As the NTC looks to modernise the country and diversify the economy, there appears to be considerable scope for medium to long term expansion.
32
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Al-Elmia Company
Based in Tripoli, Al-Elmia is one of the few companies in Libya specialising in the distribution of pharmaceuticals
and medical supplies. Al-Elmia acts as an exclusive distributor or supplier for several international pharmaceutical
companies, including CP Pharmaceuticals, Panpharma, Schering AG and Haidalyana.
Ministry of Health
Established in 1952, the Ministry of Health has long been an important player in the healthcare and pharmaceutical sector. The functions of ministry are the provision of medical equipment and medicine to hospitals and clinics,
the support of people with disabilities, the treatment of wounded and injured patients, and the organisation of
medical treatment for seriously ill patients. The ministry also provides certain medical students with scholarships
and specialised courses. During the overthrow, the NTC appointed Naji Barakat as Minister of Health. After the NTC
officially assumed power in Libya, Dr. Fatima Hamroush was assigned to replace Barakat. Dr. Hamroush is the first
woman to hold a Ministry position in Libyan history.
33
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• The need for reconstruction and restoration of damaged health infrastructure opens the door
for foreign contracting firms.
• The Ministry of Health is taking steps to standardise and liberalise the pharmaceutical sector,
creating future opportunities for foreign companies to invest in Libya.
• There is little to no psychological counselling in place in Libya. After emerging from the destruction of civil war, many Libyans are suffering psychologically. There is a niche in the healthcare and pharmaceutical market to directly target and help this segment of the population.
• Almost all hospitals in Libya face a shortage of medical equipment, providing distributors a
great opportunity to expand their market.
PROJECTIONS
Healthcare & Pharmaceuticals Industry
Healthcare Contribution
to GDP
2012
2013
2014
2015
2016
3.3
4.0
4.2
4.3
4.7
Source : Noozz
35
Libya: The Opportunities Post-Conflict
INFRASTRUCTURE & CONSTRUCTION
State of the Sector
Despite suffering infrastructure losses during the civil war, with estimated reconstruction costs totalling US$
480bn, Libya’s infrastructure and construction sector is fast becoming one of the most active in the MENA region.
Although exact figures are currently unavailable, 2010 estimates looked favourably upon the short term outlook
for Libya’s construction sector, with real growth of 8.5% and 7.9% expected in 2011 and 2012 respectively. In 2010,
infrastructure activity was valued at US$ 3.6bn, and is expected to grow to US$ 5.7bn by 2014. Infrastructure’s contribution to GDP has been growing at an annual rate of 8.58%.
With a population expected to double by 2025, housing and associated infrastructure became a national priority
under Qaddafi. The government announced a US$ 33bn plan to construct 420,000 new houses by 2013, in addition
to an anticipated US$ 50bn to be spent on infrastructure and construction over the next decade. Housing construction has been buoyed by oil prices and increased foreign investment. Because the future government will have to
respond to increased demand through the development of thousands of new homes, it is likely that investment
plans related to housing will remain in effect.
A healthy budget surplus facilitated such investment plans. In 2010, Libya’s budget surplus was estimated at 14.7%
of GDP. This enabled the government to procure large-scale and capital-intensive construction projects. Although
the budget surplus dropped to an estimated -12.3% in 2011, construction projects will have to continue as Libya
looks to repair its damaged infrastructure. Furthermore, now that foreign banks have released Libya’s previously
frozen assets, readily accessible cash will accelerate construction plans. Recent factors that were present during
Qaddafi’s reign are likely to remain in place, further propelling the infrastructure and construction sector. Demand
stemming from a young and increasingly rich population is putting pressure on existing infrastructure. Economic
growth is demanding improved transport networks and access to electricity, both of which are crucial if the government wants to diversify the economy away from oil and hydrocarbons.
Ambitious tourism plans are envisioning Libya as the gateway to Africa, meaning improved transport networks are
a priority. Indeed, work is well underway on revamping the Tripoli Airport, designed to hold up to 20mn passengers
per year. Construction has also begun on several new five-star hotels, catering to high-end tourists and business
travellers. While construction and investment has been halted due to the war, work is expected to pick up again in
the coming months.
The presence of a number of international construction companies gives further support to Libya’s ambitious plans
and will promote the timely execution of projects. Austria’s Strabag, Brazil’s Odebrecht, Egypt’s Arab Contractors
and Canada’s SNC-Lavalin are just a few of the companies already active in the country, and, therefore, likely to
benefit from newcontract opportunities. Libya has recently called on Russia and Tunisia in particular to aid in the
restoration of damaged infrastructure. Other regional countries such as Egypt and Qatar are also expected to play
an important role in rebuilding Libya.
Recent estimates have noted that rebuilding the country’s infrastructure could take up to a decade, although positive growth from previous years demonstrates Libya’s ability to perform in the face of risk and political turmoil. In
2009, for example, construction industry real growth was reported at 9% year on year, making it one of the best
performing countries in the industry globally. Nominal growth came in at 26% year on year in 2009. This figure
indicates high levels of inflation in the construction sector, a condition likely to persist in coming years.
Prior to the civil war, analysts estimated Libya’s construction sector to grow positively in 2011 and 2012, owing to
the four-year investment plan expected to run through 2012. Growth was expected to slow marginally between
2013 and 2020, with an annual average real growth rate of 5.5%. Given the immediate need to repair the country’s
infrastructure, and long term plans to diversify the economy and meet population demands on housing, a steadily
increasing industry growth rate seems likely over the next decade.
35
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Alinmaa Holding Company for Real Estate and Construction
Alinmaa Holding Company is a Libyan construction and real estate company created in 2008 by the Economic and
Social Development Fund (ESDF). In 2010, Alinmaa had a paid-up capital of US$ 753.1mn. The company was expected to invest some US$ 15bn over the next several years on real estate developments throughout the country.
Because of Alinmaa’s ties to the Qaddafi government, the company was subject to EU sanctions as of 14 April 2011.
At the time of writing, the current status of the company was still unknown.
Alhadena National Company for Building Materials Industry
Recently formed by the EDSF, Alhadena was created to pursue ambitious development plans by supplementing capacity and product in the construction sector. Initial capital was US$ 75.1mn, which has increased to US$ 528.1mn.
In 2010, the company had two ongoing primary projects: cement plants in Nalut and Joufra. Both plants required
an initial investment of US$ 346.3mn, and have a targeted production capacity of 1.4mn tonnes per year. In 2010,
the plant was expected to be operational by mid-2012, with a production capacity of one million tonnes by its
opening in early 2013. Because it is a subsidiary of EDSF and subject to sanctions, construction activity is currently
halted.
Libyan Investment and Development Company (LIDCO)
Established in 2007, the state-owned LIDCO was the first development company to be established by ESDF. The
company’s initial paid-up capital was US$ 75.2mn, which increased to US$ 225.9mn by 2010. Although created
to develop and enforce the government’s construction and infrastructure plans, LIDCO has served as a vehicle for
forming public-private-partnerships (PPPs) with international developers and contract firms. Between 2007 and
2009, LIDCO signed 35 joint ventures with foreign firms. Like its sister company Alinmaa, the current fate of LIDCO
is unknown. As a state-owned enterprise, the company was also subject to EU sanctions as of 14 April 2011.
36
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• Prior to the civil war, demand for building materials for various construction and infrastructure
projects was high, but supply was low. The war has only exacerbated this dearth in supply.
• Foreign contractors are being employed to carry out construction and Libya is expected to
welcome active participation by both governments and multi-national companies.
• Libya has a thriving steel and cement industry, but practically all other materials must be im-
ported. The country is looking to increase local production of high-end raw materials, particularly glass, metal and aluminium.
• Analysts in the construction industry see a bright future for Libyan-European partnerships,
since the main components of the manufacturing sector could be built in Libya at a lower cost,
with the remaining equipment imported from Europe.
PROJECTIONS
Infrastructure & Construction Industry
Value of Industry
(US$ bn)
Annual Growth rate (%)
2012
2013
2014
2015
2016
4.28
4.64
5.7
6.18
6.7
7.9
5.5
5.5
5.5
5.5
Source : Noozz
37
Libya: The Opportunities Post-Conflict
INSURANCE
State of the Sector
Due to long-standing international trade embargoes, Libya was the last country in North Africa to deregulate its
insurance sector. After deregulation, Libya’s insurance sector benefitted from the arrival of new private companies,
expanding product offerings, and increasingly attractive price schemes. There are only nine insurance companies
operating in Libya, all of which are under pressure to find new ways to maintain profitability and quality standards.
Because the insurance sector is still in its infancy, it lacks proper regulation and supervision, an issue which has
deterred many foreign firms from entering the market (see figure). Due to the civil war, insurance has effectively
been plunged into hibernation.
MENA Insurance Industry Structure Indicators
Source : World Bank
In 2009, insurance penetration as measured by premiums’ shares accounted for less than 1% of Libya’s GDP, and
total insurance premiums are estimated to be worth around US$ 300 to US$ 350mn (see figures). Although Libya is
one of the wealthiest countries in the region, neighbouring countries like Tunisia and Egypt, with insurance premiums of US$ 600mn, and US$ 534mn respectively, outperform Libya. Progress, however, has been made in the past
few years. Between 2007 and 2008, gross insurance premiums increased by 48% to US$ 223.1mn.
38
Libya: The Opportunities Post-Conflict
Insurance and Financial Services (% of commercial service exports)
14
14
12
12
10
10
8.46
8.52
7.61
8
8
6.78
6
6
Jan/06
Jan/08
Jan/10
Source : Trading Economics
Insurance Premiums (as % of GDP)
2
Country
Algeria
Bahrain
Egypt
Jordan
KSA
Kuwait
Lebanon
Libya
Morocco
Oman
Qatar
Syria
Tunisia
UAE
Yemen
MENA
GCC .
Non-GCC
Oil
Non-Oil
Non-Life Premium
(% of GDP)
0.60
1.43
0.42
1.53
0.46
0.34
2.18
0.48
1.54
0.97
0.67
0.92
1.38
1.34
0.24
0.97
0.87
1.03
0.80
1.22
Life Premium
(% of GDP)
0.05
0.70
0.37
0.21
0.07
0.09
0.98
0.01
0.89
0.20
0.01
0.01
0.25
0.28
0.02
0.28
0.23
0.31
0.16
0.45
Assets
(% of GDP)
0.8
12.1
3.9
4.8
1.8
7.2
19.0
2.4
2.7
0.0
0.6
3.1
5.3
4.4
6.1
3.8
7.1
Source : World Bank
39
Libya: The Opportunities Post-Conflict
Engineering and construction has become the largest insurance class, accounting for 27% of all premiums collected in 2008, and overtaking the historically important marine cargo segment, which only accounts for 8.7% of
premiums (see figure). Fire, which has benefitted from an increase in property construction, is the second-largest
insurance class, capturing 19% of all premiums. Combined, the traditional forms of automobile insurance, including compulsory motor third-party liability (TPL) and motor comprehensive represent 23% of the insurance market.
All-risk car insurance was estimated to be around 20%, an extremely low level considering that 29% of the population owns motor vehicles.
Breakdown of Non-Life Premiums
Motor
Algeria
Bahrain
Egypt
Jordan
KSA
Kuwait
Lebanon
Libya
Morocco
Oman
Qatar
Syria
Tunisia
UAE
Yemen
MENA
GCC
Non-GCC
Oil
Non-Oil
47
48
33
60
46
40
51
31
56
54
21
65
59
35
33
45
41
48
43
49
Property and
Construction
42
39
25
20
26
15
19
41
12
19
31
19
9
13
20
23
24
23
27
18
Maritime, Aviation
and
Transit (MAT)
9
7
32
10
18
16
9
21
7
9
14
12
10
15
22
14
13
15
13
15
Other
1
7
10
10
10
29
21
6
25
18
34
6
22
37
25
17
23
14
16
19
Source : World Bank
Personal class is the least developed of the insurance market. In 2008, life insurance represented 2% of all insurance
premiums, while medical insurance’s share only reached 0.3%. Long accustomed to the basic state welfare system
under Qaddafi, health and life insurance are not considered necessary by many members of the Libyan public.
Indeed, there is almost no culture of insurance in the country. Clients buy insurance in order to satisfy legal requirements, as in the case of compulsory motor insurance.
Newly-introduced companies such as Sahara Insurance Company, Trust Insurance and Takaful Insurance have increased competition in the market, and, as a result, have been stepping up marketing campaigns that increase
their visibility around the country. The insurance sector would benefit greatly from state-driven promotion, which
was limited under Qaddafi. A spokesperson for Takaful Insurance noted that for penetration to increase, insurance
would have to be promoted by government authorities in conjunction with market players. As Libya looks to modernise the country, increase construction and infrastructure and revamp the healthcare sector, it is likely that the
new government will place an emphasis on promoting insurance coverage growth.
40
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Libya Insurance Company
Founded in 1964, the Libyan Insurance Company (LIC) was established as a private insurance company. It was the
first national insurance company to be established, and the first insurance company registered officially in Libya according to the supervision and control of insurance act. Seven years later, in 1971, LIC was nationalised and became
a state-owned monopoly player in the insurance market. The Medical Insurance Board joined with LIC in 2000, effectively raising the paid capital of the company to US$ 39mn. Paid capital rose to US$ 54.7mn in 2008, following
the reformation of the LIC into a stock company. As of 2006, LIC accounted for 44% of total insurance market share.
41
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• Although the market is still small, Libya is a particularly good market for foreign reinsurance
companies. Low prevalence of natural disasters in the country has produced an attractive combined ratio (the percentage of premiums an insurer has to pay out in claims and expenses) of
70%.
• Low penetration in personal lines, particularly in health and life, provide potential for growth.
• Plans to facilitate market entry for foreign companies are in the pipeline. In 2010, the Libyan
Federation for Insurance Companies announced its plan to amend the current insurance law in
2011 to allow foreign companies into the market. In the short term, options for foreign companies will be limited. Currently, Libya applies limits to cross shareholdings and to the amount that
can be held by any one entity. In addition, Libya does not allow branches to be established and
still restricts the percentage of a local insurer that can be held by non-nationals to 40%.
• Insurance companies based in the Middle East have expressed a growing interest in providing
sharia-compliant takaful products. As Libya begins to move towards a sharia-based financial system, takaful insurance will increase in popularity. Opportunities in the short-term are somewhat
constrained, however, as Libya does not have the legal framework in place to offer traditional
sharia-compliant takaful products.
PROJECTIONS
Insurance Industry
2012
2013
2014
Gross Insurance
Premiums (US$ mn)
330.1
488.5
723.0
Total Annual Premiums
(US$ mn)
400.0
540.0
729.0
2015
2016
1,012.0 1,070.0
948.0
1,292.0
Source : Noozz
42
Libya: The Opportunities Post-Conflict
OIL, GAS & PETROCHEMICALS
State of the sector
Oil reserves in Libya are the largest in Africa, and the eight largest in the world, with an estimated total of 43.7bn
barrels, or 3% of the world’s oil reserves. Since the fall of the Qaddafi government and the end of the war, Libya’s oil
industry has been rapidly improving. According to the National Oil Company, Libya is producing just over half of its
pre-war levels, at 840,000 bpd, with full pre-conflict output of 1.7mn bpd expected by the end of 2012 (see figure).
MENA Oil Indicators
Source : CRS
As of 2010, Libya had 77 years of proven reserves at the current production rate if no new reserves are found. Libya’s
OPEC production quota is likely to reach 1.94mn bpd by 2013, as production increases and more companies begin
to enter the market (see figure. Currently, about 80% of Libya’s proven oil reserves are found in the Sirtre basin.
However, only 25% of Libya’s surface territory has been explored to date, and it is highly probable that more oil will
be discovered in coming years.
Libyan oil is considered particularly attractive because the sweet crude oil the country produces results in low
production costs- as low as US$ 1 per barrel in some fields. Libya is also valued for its close proximity to European
markets. Indeed, 85% of all Libyan oil is exported to European markets. In 2010, Libya’s net exports amounted to
1.5mn bpd, well over 80% of all oil produced.
Natural gas is also abundant in Libya, and production has increased in recent years (see figure). As of 1 January
2011, Libya’s proven natural gas reserves were estimated at 54.7tr cubic feet (tcf ). Libya’s natural gas production
has grown substantially in the last few years. According to Energy Information Administration (EIA), Libya produced
1,034bn cubic feet (bcf ) of gross natural gas in 2009, of which 562 bcf was marketed dry natural gas. The remainder
was vented, flared or re-injected to enhance oil recovery. 349 bcf of natural gas was exported to Europe. A significant amount of natural gas is retained for domestic electrical use, accounting for 45% of generated electricity in
2010.
43
Libya: The Opportunities Post-Conflict
MENA Gas Indicators
Source : CRS
Under Qaddafi, the oil sector contributed about 98% of export earnings, 25% of GDP, and 80% of government revenues. Although recent government reforms have attempted to diversify the economy, oil and gas is undoubtedly
Libya’s most lucrative sector, and will remain so for the foreseeable future. The NTC has been working diligently to
resume oil production and bring back foreign companies in order to stabilise the economy.
As a transitional government, the NTC’s role in oil and gas is limited. Indeed the government has stated that no
major decisions, including a reworking of Libya’s decades-old oil law, will be made until an elected government is
in place. The NTC will focus on probing into Qaddafi’s opaque and occasionally corrupt business transactions. The
NTC will review some oil contracts between foreign firms and Qaddafi’s government, although it is likely that the
majority of contracts will be revisited.
The NTC has also set up a committee to investigate corruption in the oil sector during Qaddafi’s rule. This widereaching probe comes into effect amidst increased pressure from political forces inside the country to look into
allegations that millions of dollars were misappropriated from the sector by Qaddafi’s forces. Such a probe could
lead to the reallocation of lucrative contacts to foreign firms under Qaddafi, although we expect that the majority
of contracts will be upheld. Indeed, all existing contracts are to be honoured unless indications of corruption are
found. The NTC has already rewarded countries that supported them during the civil war with lucrative contacts.
In addition, Libya has broken away from previous policy of restricting sales to end-users and recurrent clients. Under the National Oil Corporation (NOC), the country will supply four major European trading houses with crude oil
in 2012. This is just the beginning: the NOC is planning on expanding sales to all major European trading houses.
These reforms have facilitated the re-entry of foreign firms onto the market. Oil and gas production resumed in late
September, and the country is expected to resume full output by the end of 2012. Italian oil giant, Eni, the largest
foreign oil producer in Libya, has resumed production with 31,900 bpd, compared to pre-war levels of 70,000 bpd.
Some companies, such as French oil major Total who have been working offshore since September, are expecting
to move towards onshore drilling by January 2012. All Libyan oil firms have resumed production.
44
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Arabian Gulf Oil Company
A subsidiary of the NOC, the Arabian Gulf Oil Company (Agoco) is an oil company based in Benghazi, engaged in
crude oil and natural gas exploration, production and refining. During the civil war, Agoco used oil funds to support anti-Qaddafi rebels when production was halted. After seven months of halted production, Agoco was the
first Libyan oil company to resume work in September. Prior to the war, the company was producing 425,000 bpd,
a rate Agoco is hoping to return to by February 2012. Current production rates are at 266,000 bpd from five fields,
with output at the Sarir field at 130,000 bpd, while Messla was producing 83,000 bpd. Production was 35,000 bpd
at Nafoora, 5,000 bpd at Hamada and 13,000 bpd at Beda.
International Oil Companies
IOCs in the oil industry operating in Libya work in exploration, production, transportation and refining. IOCs with
operations in Libya include Eni, Total, Repsol YPF, StatoilHydro, Occidental, OMV, ConocoPhillips, Hess, Marathon,
Shell, BP, ExxonMobil and others. Many of these companies also work in the gas industry, participating in exploration, production and transportation of natural gas. European companies are generally favoured in contract appointments, although since the lifting of US sanctions in the 1990’s, American firms have begun to enter the market
as well. Prior to 2010, IOC participation in Libya’s oil concessions was initially as high as 49%. However, changes
to the production sharing agreements in recent year limited IOC production shares. Qaddafi required that IOCs
already operating in the country rewrite existing contracts to comply with the new framework. The key elements
included a reduction of the companies’ share of output (up to half of what it was) and a commitment of fresh investment in exchange for an extension of the license period (some up to 15 years). Most IOCs have either resumed
production, or are in talks to resume production in Libya.
National Oil Corporation
Accounting for over 70% of the country’s oil output or 1.1mn bpd, the NOC, along with its smaller subsidiaries,
dominates Libya’s oil industry. Of NOC’s subsidiaries, the largest oil producer is the Waha Oil Company, followed
by Agoco, Zueitina Oil Company, and Sirte Oil Company. Established in 1970 under Qaddafi, it was the national oil
company of Libya. The NOC has a network of onshore oil, oil and gas processing companies, refineries, crude oil export facilities, and a gas pipeline. NOC is charged with field development and improvements as well as downstream
activities. The corporation is also responsible for implementing the Exploration and Production Sharing Agreements (EPSA) with IOCs, and for awarding exploration licenses. During the civil war, Oil Minister Shukri Ghanem
defected to Tunisia. In September, the NTC appointed Nuri Berruien as chairman of the NOC during the transitional
period. The NOC is expected to increase exports to 700,000 bpd in January.
Waha Oil Company
Waha Oil Co. is one of Libya’s largest oil operations, with strong ties to foreign companies. Prior to the civil war, Waha
produced around 20% of the country’s gross oil production, accounting for more than 350,000 bpd. The company
was headed by Bashir Elashahab, who had strong ties to the Qaddafi regime. The company was partly owned by
Marathon Oil Corporation, ConocoPhillips and Hess Corporation. During the uprising, workers staged a crippling
strike to protest the leadership of Elashahab. In December, Ahmed Ammar was appointed the new chairman. The
company has been one of the last in Libya to resume pumping crude oil. The company has embarked on production in the Dahra and Samah fields. The rate of production is 16,000 bpd, representing about 5% of the company’s
total capacity.
45
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• Increased oil production is a huge opportunity for companies. Despite abundant oil reserves,
production peaked in the 1960’s at 3mn bpd, but the NOC has announced that it wants to return
to these levels by 2017. Companies such as ConocoPhillips have expressed a desire to deploy
new technology and manpower to Libya in order to increase production.
• With nearly 80% of Libya’s territory unexplored, there is a huge opportunity for new oil and gas
reserves to be discovered. Companies willing to put the funds and effort into collaborating with
the NTC and NOC in investigating new territory may find abundant reserves. While this will not
be a priority in the short to medium term, in the long term, both foreign companies and Libya
stand to gain from increased exploration activity.
• There are also opportunities in gas production. Qaddafi had planned to significantly increase
the country’s natural gas production in order to expand the use of natural gas in the power
sector, in an attempt to free up more oil for export while maintaining and expanding existing
pipeline and LNG exports. As the NTC looks to diversify their economy away from the current oil
base, gas will become increasingly important.
PROJECTIONS
Oil, Gas & Petrochemicals Industry
Value of Sector
(US$ bn)
OPEC Production Quota
(mn bdp)
Oil Production
(mn bpd)
2012
2013
2014
2015
2016
4.4
4.4
4.8
5.5
6.0
1.78
1.94
2.09
2.09
2.25
1.7
1.8
1.8
1.9
1.9
Source : Noozz
46
Libya: The Opportunities Post-Conflict
REAL ESTATE
State of the Sector
The real estate sector in Libya is not well-established, and has suffered setbacks following the civil war. Under
Qaddafi, the real estate sector was dominated by the government and self-builders. Following the lifting of international sanctions in 2003, and gradual shifts towards privatisation, international investors have begun to slowly
enter the market, particularly in the hospitality sector. Although the real estate market does have potential, it is
currently disorganised. It is likely that the market will remain stagnant in the short term, although long-term investment opportunities do exist.
The real estate sector was valued at US$ 4.4bn in 2008, accounting for 5.4% of GDP, and representing 18% of the
non-oil GDP. Housing, which is government-assisted for the poor, represents a large portion of the real estate sector. Wealthy individuals tend to contract their homes on a private basis, resulting in a somewhat disorganized housing sector. As a result, Libya has experienced relatively little inflation in housing costs. By 2009, overall consumer
index had risen to 127.7, while housing only rose to 109.8.
Commercial real estate, which was nearly non-existent in Libya, has seen some investment in recent years. As of
2010, grade-A office space did not exist in Libya. Businesses in Tripoli are clustered around the Al Fateh tower and
the Dar al Emad tower. Two new towers, the recently completed Burj Bulayla Tower and the still under construction Daewoo Tower are both in the same area. Several major commercial real estate projects are currently being
developed by Turkish and UK firms.
Analysts have estimated that 400,000 sqm is be slated to come online in the Tripoli market between 2010 and 2012,
although several issues have persisted, and are currently exacerbated by the aftermath of the civil war. Progress on
several towers had been halted, reportedly due to financing issues. Completed towers such as the Burj Balayla have
been unable to lease office space, and remain largely vacant. Libya’s success in the commercial real estate sector
will depend on its ability to attract foreign companies.
One significant trend to emerge in the past three or four years, which demonstrates Libya’s potential to becoming a
regional player in the real estate market is the creation of state-owned companies developing mixed-use real estate
plans. In 2008, the government established the Alinmaa Holding Company for Construction and Real Estate Development, a subsidiary of the Economic and Social Development Fund (ESDF). An additional four holding companies
have been rolled out in the past two years, all with major projects underway.
It is currently unclear what will happen to these government-owned holding companies, and what role they will
play in future real estate plans. In the short term, however, Libya’s real estate sector is likely to suffer setbacks from
the civil war. All major projects have been halted, as resources are diverted to more pressing infrastructure rehabilitation. Stagnation is likely to persist as international businesses hold back on returning to Libya until the security
situation ameliorates. In the medium to long term, however, as Libya stabilises and the government looks to diversify the economy, the semi-developed real estate sector is likely to grow substantially.
47
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Alinmaa Holding Company for Construction and Real Estate
Alinmaa Holding Company is a Libyan real estate company created in 2008 by the ESDF. Because of Alinmaa’s ties
to the Qaddafi government, the company was subject to EU sanctions as of 14 April 2011. Prior to the revolution,
Alinmaa was involved in several projects, including one entailing significant tourism development in Al Burdi. Alinmaa also had a 45% share in the United Libyan Tourist Investment Company, which was developing a mixed-use
resort at North Gheran.
Arab Union Contracting Company (AUCC)
AUCC is a major player in the construction of residential and commercial real estate properties. AUCC is primarily
known for cement, and accounts for 30% of Libya’s domestic cement production. However, the company recently
expanded into real estate, and has a handful of current and future projects. The Tripoli Centre, which is the second
phase of the Al Fateh Tower is nearing completion. AUCC was also planning on building 2,870 housing units, the
US$ 25.4mn Serman sewage project and the third phase of the US$ 359,820 Hadba Al Khadra sewage treatment
plant. Because these projects were in collaboration with the Qaddafi-owned General Housing Utilities Board, all
construction has been halted.
Renaissance Construction
Renaissance Construction is the second-largest building contractor in Turkey and recently entered the Libyan market. Renaissance has quickly emerged as one of the major players in the Libyan real estate market. As of 2010,
the company’s main project was collaborating on the US$ 2bn construction of Bab Tarabulous, a three-stage real
estate project that will include a shopping mall, a residential city targeting expats and Libyans, and a medical city.
Renaissance has planned to build 350 luxury hotel rooms, office buildings and the shopping mall for a total of US$
753.3mn.
48
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• As tourism becomes an increasingly important aspect of economic diversification, investment
opportunities in resorts and hotels will open up. High-end hotel rooms are particularly undersupplied in Tripoli and along the coast.
• Hospitality is expected to continue being the least risky sector in the real estate industry. The
majority of international investors in Libya’s hospitality real estate are foreign petrochemical
firms with long-term ties to the country. As these companies return to their oil production activities in Libya, it is likely that they will re-enter the market in the medium term.
• Tripoli lacks any large-scale retail space, with the exception of a smaller facility in Hey Al Andalus.
PROJECTIONS
Real Estate Industry
Value of Sector (US$ bn)
2012
2013
2014
2015
2016
4.4
4.4
4.8
5.5
6.0
Source : Noozz
49
Libya: The Opportunities Post-Conflict
RETAIL & FMCGS
State of the Sector
By and large, the retail market in Libya remains dominated by small shops and the informal sector of open-air markets. In 2003, international sanctions were lifted, opening Libya up to the global market of international retail. A
modest increase in high-end retail has enabled the sector to grow relatively quickly. In 2008, the retail sector was
valued at US$ 2.8bn, a 114% increase since 2003. Sector growth has been limited by inflation, which reached nearly
12% in 2008, as well as by selective enforcement of zoning and regulatory frameworks.
Under Qaddafi, the retail sector was almost entirely state-controlled via a number of subsidiaries from Libya’s National Supply Company, and policies to restrict foreign enterprising were in place. In recent years, however, steps
towards opening and liberalising the retail sector were taken, including slashing customs duties in 2005. While
western-style retailing such as supermarkets and megastores is still largely absent from the sector, a small number
of international retail and FMCGs outlets are opening in Tripoli.
In April 2008, the UK-based department store Marks & Spencer opened a store in Tripoli, its first on the African continent. A year later, in April 2009, another UK-based department store, Bhs, opened a branch in Tripoli. Both shops,
along with other international stores, are located on Gargaresh Road. Adidas, Yves Rocher, Nike, Lacoste, Levi’s,
Aldo, Timberland, Bossini, Benetton, Promod, Next and other international fashion companies have expressed interest in opening shops in Tripoli as well.
It is currently unclear if the NTC or Libya’s new government will completely liberalise the retail sector. In major urban areas, however, wholesale and retail trade, as well as hotels and restaurants are an important source of employment. This industry accounted for 5.6% of GDP in 2006. As Libya’s future government looks to create more jobs and
curb unemployment, a growing retail sector could provide a much-needed source of new employment.
Looking forward, Libya’s government will also have to answer to the population’s evolving tastes. Libya’s growing
economy coupled with low domestic production rates has created a rise in consumer demand for international
retail products in almost every market category. With the increase in public wealth and cultural changes towards
embracing international brands, the desire for European-manufactured products, consumables and produce is
growing. Although growth in the retail sector is being put on hold as the country focuses on oil and infrastructure
in the short-term, the retail sector is still fledging, and holds great potential in the mid and long term.
50
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Mango
Spanish fashion giant Mango opened its first branch in Libya in 2006, with a shop on Gargaresh Road in Tripoli.
Mango’s opening marked the first time a significant European brand began franchising operations in Libya. The
company opened a second store in Benghazi, on Airport Road. Mango’s entrance into the Libyan market is credited
with paving the way for other European companies to open branches in the country.
Marks & Spencer
One of Britain’s best-known department stores, M&S opened a branch in Tripoli in April 2008. Serving middle and
upper-class Libyans, M&S Libya is an exact replica of the company’s stores in England. M&S gained some attention
during the civil war, as it stayed open even when the British embassy shut down. During the war, prices increased
as the only resupply route was through Tunisia. As more international companies begin to open branches in Libya,
M&S is likely to lose some of its market edge.
Turkmall
As Turkey becomes increasingly interested in entering the Libyan market, Turkmall serves as ambitious foray into
the retail sector. A Turkish developer, Turkmall has partnered with EDSF and announced plans in 2010 to build
shopping centres in both Tripoli and Benghazi. Forum Oya and Forum Andalus in Tripoli will have a gross leasable
space of 90,000 sqm, and entertainment facilities. Lake Forum in Benghazi will spread over 100,000 sqm. Construction plans have been halted as the EDSF is under sanctions, but it is likely that Turkmall will collaborate with Libya’s
new government in 2012.
51
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• Developing infrastructure, including the creation of new shopping complexes and retail outlets, along with the availability of real estate has allowed international retailers significant opportunity to establish new sales channels in Libya.
• Low rental costs, even in the more in-demand Gargaresh Road in Tripoli, are a boon for retailers.
• Currently there is only one ‘modern’ supermarket in Tripoli, and no modern entertainment facilities to speak of. The development of a chain of modern hypermarket-anchored community
style shopping centres around the capital city’s suburbs are enormous, provided they are in
keeping with cultural norms and constraints.
PROJECTIONS
Retail & FMCGs Industry
Manufacturing of
Consumer Non-Durable
Goods (US$ bn)
2012
2013
2014
2015
2016
0.094
0.1
0.105
0.11
0.116
Source : Noozz
52
Libya: The Opportunities Post-Conflict
TELECOMMUNICATIONS & IT
State of the Sector
In early October, Fawzi Al Barrani, the head of the Libyan Telecommunications Authority (LTA) announced intentions to reconstruct the country’s communications sector over the next several years. While assuring full transparency throughout the process, Al Barrani noted that the NTC will only execute urgent repair and maintenance to
infrastructure initially. New plans to completely revamp the sector will be left to the elected government in 2012.
Since the launch of the sector in 1995, telecommunications and IT have been entirely state-owned, and were controlled by one of Qaddafi’s sons. The provision of postal and telecommunications services was monopolised by
two state-owned services, the General Posts and Telecommunications Company (GPTC) and Libyan Post Telecommunications & Information Company (LPTIC). The GPTC and LPTIC also operate the country’s only internet service
provider, the Libyan Telecom & Technology (LTT), and the two mobile networks, Libyana and Al Madar. Market
liberalisation was non-existent and foreign firms were excluded from participating in the market.
Despite this monopoly, Libya’s telecommunications infrastructure is superior to those in most other African countries, and services are available at some of the lowest prices on the continent. Libya’s fixed-line teledensity is one
of the highest in Africa, supported by extensive rollouts of CDMA-2000 wireless local loop technology (WLL) since
2006.
While the mobile sub-sector remained undeveloped for several years with Al-Madar as the sole operator, a second
GSM network, Libyana, was introduced in 2004. Market penetration skyrocketed, and in 2008 Libya became the
first country in continental Africa to break the 100% mobile penetration barrier. The mobile networks are also participating in the internet and broadband sector with mobile data services and third generation (3G/HSDPA) mobile
broadband services (see figures).
Mobile and Fixed Line Subscribers (per 100 people)
100
88.65
93.12
80.01
80
100
80
60
60
48.16
40
20
0
40
14.18
Jan/02
15.43
22.39
Jan/04
20
Jan/06
Jan/08
0
Source : Trading Economics
53
Libya: The Opportunities Post-Conflict
Mobile Subscriptions (per 100 people)
200
200
171.52
152.24
150
150
119.99
100
100
66.64
50
74.71
50
34.66
0
Jan/02
2.29
8.85
0
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
Libya has the smallest market of mobile subscribers in North Africa, with just 9.3mn mobile phone subscribers in Q1
2011. However, analysts have estimated that Libya could expect to have 17.8mn mobile phone subscribers by 2015.
Libya benefits from extremely high levels of mobile penetration, with an estimated penetration rate of 142.5% in
March 2011. Between 2004 and 2009, mobile subscriptions had an annual growth rate of 80%. However, internet
penetration remains low in the country (see figures). There are four internet service providers (ISP) in Libya: Al Falak,
Bayat al Shams, LTT and Modern World Telecom.
Internet Users
400,000
400,000
300,000
300,000
200,000
200,000
100,000
100,000
0
0
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
54
Libya: The Opportunities Post-Conflict
Large-scale investments had been made under Qaddafi to connect the entire country to mobile and fixed-line networks. In April 2009, Africa’s first fibre to the home (FTTH) network was deployed for commercial use. A year later,
the first terabit international fibre optic cable landed in the country in 2010. Investments in the telecoms sector
totalling US$ 9.3bn were earmarked for 2005 to 2020.
In 2009, Libya announced it would issue the first ever private telecom license in the country for fixed and mobile
services, although the government would take a minority stake in the new operator. A new regulatory authority for
the telecom sector, GTA was formed at the same time. Close to US$ 1bn has been offered for the concession. The
license award had been delayed several times already prior the civil war. It is unknown if the new Libyan government will completely privatise the telecoms and IT sector, or keep it under state control.
The civil war and subsequent NATO airstrikes beginning in the spring of 2011 seriously harmed the telecommunications sector. While it is currently unclear exactly how much infrastructure has been destroyed, the LTA has
announced that billions of dollars will be needed for repairs. In the short-term, efforts will be focused on repairing
damaged telecom and IT infrastructure.
55
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Libyana
Libyana is a Libyan mobile phone company established in 2004, specialising as a prepaid mobile phone operator.
It was one of two mobile phone operators owned by the GPTC. Libyana entered the Libyan market with low-cost
services to compete with the existing Almadar Mobile Provider, which was also later bought by GPTC. Libyana introduced 3G services to Libya. By early 2011, the company had acquired 6.2mn subscriptions over a five-year period.
Qaddafi’s eldest son, Muhammad, served as the chairman of the company until the civil war and subsequent collapse of the government. During the civil war, after internet and cell phone service had been cut off for a month, rebels in eastern Libya disconnected part of the Libyana network to create a rebel-owned mobile network called Free
Libyana. The company has resumed its services, and is currently operating under the name Libyana out of Tripoli.
Libya Telecom & Technology
Established in 1997 as a semi-private company, Libya Telecom & Technology (LTT) was Libya’s largest and main
internet service provider (ISP), offering both dial-up and broadband internet to customers around the country. LTT
became the country’s first ISP in 1999. LTT was bought out by the General Posts and Telecommunications Company
(GPTC) in 2004. In 2006, LTT constructed an ATM network followed by the launch of new residential and business
broadband services in 2006. In April 2009, LTT signed a contract with the Chinese global information and communications technology solutions provider, Huawei, for the deployment of a FTTH network. This marked the first time
a FTTH network was commissioned for commercial use in Africa. LTT also recently ventured into mobiles, launching a mobile phone service called Libya Phone Mobile. LTT became the third mobile operator in Libya. Qaddafi’s
eldest son, Muhammad, also served as chairman of LTT until the civil war and subsequent collapse of the Qaddafi
government.
56
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• With infrastructure repairs as the most immediate priority of the NTC, opportunities are abun-
dant in the areas of telecommunications repair and consulting. Although total damage costs are
unknown, the recent freezing of Libya’s assets means the NTC has the funds to hire specialised
firms.
• There are opportunities to bring in new technology to the country to support IT growth.
• Lack of infrastructure has hampered Libya’s IT sector growth, and there are only 0.2 fixed line
broadband internet subscribers per 100 inhabitants. There is a huge potential to increase internet subscribers through infrastructure growth.
• Arabic language content and internet sources remain scarce. There exists a significant gap in
the market when it comes to offering information in Modern Standard Arabic and the Libyan
dialect.
PROJECTIONS
Telecommunications & IT Industry
Mobile Phone
Subscribers (mn people)
Projected Telecom
Sector Investments
(US$ bn)
2012
2013
2014
2015
2016
10.51
11.73
12.94
17.8
19.01
0.62
0.62
0.62
0.62
0.63
Source : Noozz
57
Libya: The Opportunities Post-Conflict
TOURISM & HOTELS
State of the Sector
Libya’s miniscule travel and tourism industry came to a virtual standstill during the civil war. Significant infrastructure damage, including to the airport runways at Benghazi Airport and Tripoli port, have complicated travel and
transportation in the country. Libya’s tourism sector has seen a slow decline since 2000, and came to a near-complete halt in 2011 (see figures).
Tourism Arrivals
180,000
180,000
160,000
160,000
140,000
140,000
120,000
120,000
100,000
100,000
80,000
80,000
60,000
60,000
40,000
40,000
20,000
20,000
Jan/00
Jan/02
Jan/04
Jan/06
Jan/10
Source : Trading Economics
Although tourism had been practically non-existent for several decades, recent developments have been made
in the sector. Prior to the onset of violence in Libya, the Qaddafi government had finally developed a Tourism
Master Plan for 2009-2013, with some vision expressed about the much longer-term, through to 2025. The plan
anticipated inbound tourism would grow to 1.8mn trips to Libya by 2013, and also highlighted the need to expand
adventure tourism and domestic tourism.
Investment started pouring into the country’s travel and tourism industry, with more than six five-star hotels
planned to be developed in the city of Tripoli alone, as well as ambitious development plans for airports, ports,
roads and rail projects in the country, linking Libya to its neighbouring countries. Investors saw significant potential
in targeting this market at such an early stage.
Prior to the war, the tourism and hotel industry was experiencing mild growth. In 2004, 149,000 tourists visited
Libya; this number increased to 180,000 in 2007. By 2007, tourism contributed less than 1% of Libya’s GDP (see figure). Pre-conflict, Egyptians and Tunisians accounted for the vast majority of visitors, at 42% and 38% respectively.
The country has 13,000 hotel rooms, although the government-backed infrastructure plans are hoping to increase
this number to 50,000 in coming years.
58
Libya: The Opportunities Post-Conflict
International Tourism Expenditures (% total imports)
10
10
9.76
9
9
7.83
8
7.31
8
7.39
6.8
7
7
6.22
5.8
6
6
4.96
5
5.15
5
4
4
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
Qaddafi’s ambitions also took into consideration the country’s diverse offerings. Libya is home to five UNESCO heritage sites, and its vast desert is a historic landmark of the Second World War. There is a large untapped market to
consider for the growth of travel and tourism in the future; one which could be looked at more closely as a target
for investments in the future.
Indeed, the NTC has realised the potential of the tourism sector, and is eager to capitalise on this lucrative industry
in an effort to diversify the economy. A growing tourism industry would also provide jobs for tour guides, drivers,
restaurant and hotel staff, and translators. In the short-term, however, immediate growth remains unlikely. For the
time being, the civil war, subsequent political unrest and security issues have deterred most foreign travellers from
visiting the country.
The future remains uncertain, and Libya’s travel and tourism industry is expected to suffer losses for at least another
two years. There is a great deal of reconstruction needed, and efforts will be geared towards getting the country
back on its feet before engaging in more tourism developments. Provided the situation stabilises and the new
government puts substantial effort into vitalising the industry, long term tourism and hotel prospects may end
up improving. Recently, a Libyan bank official estimated that tourism could account for 3% to 4% of the economy
within five to ten years, depending on how much effort the new government puts into the industry.
59
Libya: The Opportunities Post-Conflict
KEY PLAYERS
Al Enma Tourism Holding Investment Company
ETHIC is a government-owned holding company, and the lead developer in tourism and hotels in Libya. The company is mainly interested in developing tourism in the capital and along the coast. The majority of tourism development in the country is directed either by ETHIC and its nine wholly-owned or four partially-owned subsidiaries.
In 2010, ETHIC was investing US$ 1.6bn in several projects, including two new hotels in Benghazi. Since the war,
construction and investment has been put on hold.
Al Burdi Tourism and Development
Al Burdi is one of ETHIC’s subsidiaries, and has been allotted nearly 290 kilometres of coastline between Ras Al Teen
and the Egyptian border. The company has 14 projects underway, including several joint ventures with Canadian,
Korean and UK firms. Al Burdi’s biggest project is a multibillion dollar Bardiyeh waterfront development near Tobruk.
Corinthia Hotel
Based in Malta, Corinthia Hotels International & Resorts is a hotel management company that provides technical assistance and management services to hotel owners worldwide. CHI is the exclusive operator and developer for the
luxury Corinthia Hotels brand as well as the Wyndham and Ramada Plaza brands in Europe, Africa and The Middle
East. The Corinthia Hotel is the first five-star hotel to operate in Libya. It was opened in 2003 by then-Prime Minister
Shukri Ghanem. Prior to the uprising, the Qaddafi government invested heavily in Corinthia through the Libyan
Arab Foreign Investment Company (Lafico). Most recently, Lafico invested in the Corinthia Hotel London, which
came under international fire for opening during the civil war. Indeed Lafico owns 35% of Corinthia London, and
as a Libyan company, is subject to sanctions imposed by the EU, US and UN. As more foreign hotels begin to open
branches in Libya, the Corinthia is likely to lose its market edge.
Libya Expeditions LLC
Libya Expeditions is the country’s leading tour operator and travel adventure specialist. It is a full-service tour operator focusing on escorted Libya cultural, archaeological, and desert adventure tours and holidays. The company
is 100% Libyan-owned, and employs local drivers and guides. Libya Expeditions’ goal is to promote responsible
tourism. The majority of tourists using Libya Expeditions come from France, UK, Italy, Germany, Spain and Canada.
Demand for adventure desert trips in 2010 pushed the company to create specialised tours. 12 to 14-day trips average about US$ 2,000. Although Libya Expeditions is the most reputable tour operator in the country, their website
is currently under construction, highlighting the continued difficulties faced by tourists seeking to organise trips
to the country.
60
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• Investment opportunities are plentiful in the travel accommodation market, which has been
largely underserved for years. As the country opens up to more international business and leisure travellers, high-end accommodation will have to increase. For years Libya’s only five-star
hotel was the Corinthia Hotel in Tripoli, which operated without competition, enabling it to impose prices at will.
• In recent years, the InterContinental, Marriott, Moevenpick and Daewoo have entered the market, along with the Radisson and Four Points Sheraton. At the moment, these companies have
halted construction and are likely waiting for the security situation to stabilise completely before proceeding. Once Libya enters into a more peaceful period, it is likely that more players will
target the country’s travel accommodation market.
• One of Libya’s unique selling propositions is its vast territory, which is unscathed, and offers
diversified natural resources, providing opportunities for the development of ecotourism and
adventure travel in the future. Libya is home to mountains, national parks and protected nature
reserves, but there are few organised opportunities for adventure and eco travellers.
• Archaeological marvels are plentiful in Libya, but suffer from a lack of investment and upkeep.
The Roman cities of Sabratha and Leptis Magna in western Libya and the Greek ruins of Cyrene
in the east are big tourist attractions, and are not as heavily populated by tourists as other ancient sites in North Africa and southern Europe. These ruins represent an untapped potential for
archaeology-based tourism.
PROJECTIONS
Tourism & Hotels Industry
2012
Number of Hotel Rooms
Planned
13,000
Industry Contribution to
Economy (%)
1.0
2013
2014
20,400 27,800
1.0
2.0
2015
2016
35,200 50,000
3.0
4.0
Source : Noozz
61
Libya: The Opportunities Post-Conflict
TRANSPORT & LOGISTICS
State of the Sector
Transportation has been fairly underdeveloped for most of Libya’s history, although recent governmental plans
under Qaddafi have emphasised development. Indeed, despite the 2008 global transport slowdown caused by
the economic crisis, Qaddafi pressed on with a US$ 115.7bn five-year infrastructure and public works development plan aimed at modernising Libya’s weak transport and logistics sector. Although it is unknown if Libya’s new
government will continue working on these exact pre-revolution construction plans, it is undeniable that a major
overhaul in the transportation sector is critical for Libya’s future economic success.
The development of a national and regional rail network is of particular economic and strategic importance. Libya
has had no railway operations since 1965, when all previous narrow gauge lines were dismantled. Plans for new
development have been in the pipeline for the past decade, with earthworks beginning in Sirte and the Tunisian
border in 2001-2005. In 2008 and 2009, various contracts were concluded and construction began on a standard
gauge railway parallel to the coast from the Tunisian frontier to Tripoli. The ultimate goal is to have the railway
stretch to Salloum in Egypt. A north-south line servicing the interior of Libya has also been commissioned. US$
8.6bn has been invested into this project.
As Libya became increasingly interested in tourism and attracting foreign visitors, air traffic and airport maintenance has subsequently grown. In 2008, Tripoli International Airport recorded a 12.9% increase in passenger numbers from the previous year. Under Qaddafi, the airport’s capacity was being expanded to accommodate 20mn
passengers by 2012, a significant jump from 2010’s capacity of 3mn. This work has been temporarily suspended, as
Libya’s first priority remains rebuilding infrastructure damaged from the war.
Libya’s emphasis on becoming a regional hub has begun to pay off, as more international airlines are beginning to
fly to Libya. In particular, regional airlines and Arab carriers are targeting Libya for further expansion. Abu Dhabi’s
Etihad Airways began operating 21 flights a week to Tripoli by the end of 2010. Passenger air travel was frozen
during the civil war in Libya following substantial damage to the air infrastructure. Among other market players
that have resumed flights to Libya since the fall of the regime are Qatar Airways, Lufthansa, Alitalia, Turkish Airlines,
Royal Jordanian, Tunis Air, and the Hungarian operator, Malev. Furthermore, Libyan airlines Afriqiyah Airlines and
Libyan Airlines are in the process of restoring damaged aircraft, with the help of Air France.
Pre-revolution transport and logistics plans also included an overhaul of the port system in the country. Libya currently has nine ports, with six ports sanctioned by the EU during the civil war. A series of ports projects is in the
pipeline. An increase in the number of ports will help meet increasing demand and improve Libya’s logistic capabilities, as well as assist in job creation.
62
Libya: The Opportunities Post-Conflict
KEY PLAYERS
General National Maritime Transport Company (GNMTC)
Founded in 1975, GNMTC is a state-owned company which trades worldwide with its fleet of diverse vessels. Based
in Tripoli, the company’s twenty-four ships (with a twenty-fifth in the pipeline) include crude oil carriers, product
and chemical carriers and liquefied petroleum gas carriers. The 18 tankers have a total capacity of 11.8mn barrels.
The majority of the vessels date from the mid to late 2000’s. As of 2009, GNMTC had total capital of US$ 947mn.
Prior to the civil war, GNMTC was headed by Qaddafi’s son, Hannibal, and experienced difficulties early in 2011. UN,
EU and US sanctions made it impossible for the company to trade its vessels under Hannibal’s leadership. However,
by late November, the sanctions and freeze on assets were lifted, and roughly half of the GNMTC’s fleet resumed
sailing activities. Heavy losses are anticipated for 2011, following eight months of paralysis. However, the GNMTC
looks set to maintain a stronghold in Libya’s maritime transport and logistics sector. The company is now operating
as the NOC’s shipping arm, thus allowing Libyan oil companies and trading houses to use Libyan vessels for tankers
sold on a delivered basis. GNMTC has deliberately distanced itself from its past, and has recently renamed its ships
to erase any residue of the Qaddafi era.
Libo Air Cargo
A subsidiary of the Libyan African Aviation Holding Company, Libo Air Cargo is one of Libya’s premier enterprises
dedicated to moving air cargo from around the world both domestically and internationally. The company employs
box transportation solutions, and specialises in large-scale cargo. They operate chiefly as a cargo airline transporting freight using Ilyushin 76 aircrafts. The company is looking to expand its operations into Asia, and plans move
towards using long-range Airbus freighters.
Libyan Airlines
Established in 1964 as Kingdom of Libya Airlines, Libyan Airlines was re-established as the national flag carrier airline of the country by Qaddafi in 1969. Based in Tripoli, it operates scheduled passenger and cargo services within
the country, as well as to Europe, North Africa and the Middle East. The majority of Libyan Airlines’ flights leave from
Tripoli International Airport, with Benina International Airport in Benghazi serving as a secondary base. Libyan Airlines is a member of the Arab Air Carriers Organization and the International Air Transport Association. Modernising
efforts began in 2007 as Libyan Airlines looked to improve its fleet of aircrafts. A fifteen piece order in a memorandum of understanding with Airbus for four newly developed Airbus A350 long-haul aircrafts, four Airbus A330-200s
and seven short-haul A320s was finalised in September 2010. Despite the airline’s modernisation and expansion,
the civil war halted any progress. Libyan Airlines has been grounded since March 2011. A proposed privatisation
and merger plan with Afriqiyah Airways has been postponed.
63
Libya: The Opportunities Post-Conflict
OPPORTUNITIES
• As Libya looks to reinvent itself as an air travel hub, foreign airline companies will note in-
creasing opportunities to work in cooperation with Libyan air authorities. Airline companies that
are looking to use Libya as a connecting stop en route to other cities in Africa stand to benefit
greatly.
• There are currently no waterways in Libya. There is great potential to develop and construct
waterways both along the coast and into the interior of Libya.
• Out of Libya’s 83,200 kilometres of highway, only 47,590 kilometres are paved. As Libya looks
to modernise its transportation sector, investment and construction opportunities in highway
paving are likely to increase.
• Prospects for container and bulk shipping are likely to take off in the longer term.Given the
country’s strong oil and gas sector, opportunities to develop and improve hydrocarbons transport and logistics services will remain plentiful.
PROJECTIONS
Transport & Logistics Industry
Increase in Aviation
Passengers (major airports/million)
2012
2013
2014
2015
2016
3.0
3.81
4.3
4.85
5.47
Source : Noozz
64
Libya: The Opportunities Post-Conflict
MENA-WIDE IMPACT
The 2011 political uprisings in Tunisia, Egypt, and Libya took the MENA region by storm, as regimes fell and the
political and economic landscape of the region changed drastically. Libya is already in the process of regaining
stability under a transitional government, an encouraging sign for other countries for whom 2011 was filled with
political protest. Of course, until Libya is ruled by a democratically elected government in mid-2012, it is difficult to
say with certainty to what extent the country’s restructuring will affect the region. However, increased economic
transparency, interest in working with foreign players, and resumed oil production and infrastructure repairs all
point to a new Libya interested in becoming an important regional player.
Countries across the region have shown an acute interest in rebuilding Libya and in becoming dominant players in
the country. Emirati and Qatari oil and gas companies are positioning themselves to become leading players in the
hydrocarbons sector. Recently, the head of the Libyan-Tunisian Economic Chamber, Ali Adwai, stated that Tunisian
companies are looking to assist in rebuilding Libya. These companies will assist Libya to clear the remnants of the
war and initiate reconstruction work.
As Libya resumes oil and gas production, and foreign companies begin clamouring for production contracts and
exploration rights, the economy of the MENA region will be affected by the country’s resumed hydrocarbons output. Although Libya’s production goal of 1.7mn bpd by 2012 cannot compete with that of the Gulf States or Iraq,
as the country becomes politically stable, the way in which Libya distributes oil wealth and the foreign countries
it chooses to partner with will have an impact on regional dynamics. Most recently, EU sanctions imposed on Iran
could benefit Libya, as European countries turn to Libya to replace oil supply.
As Libya stabilises, it has the opportunity to be at the forefront of solving some of the MENA region’s most pressing
issues. Unemployment is a crippling problem across the MENA region, with the creation of an estimated four million jobs necessary to quell growing dissatisfaction. In the short-term, as Libya focuses on reconstruction, and in
the medium-term when the focus will shift to non-oil sectors, new jobs will emerge on the market. Countries such
as Tunisia have already begun to benefit from reconstruction projects. 200,000 Tunisians are expected to begin
working on construction, communication and energy projects around the country in the coming months. Egypt, a
major supplier of labour to the country, will also benefit from the resumption of economic activity in Libya.
For the past several decades, Libya has been a major host of foreign workers from neighbouring MENA region,
South East Asian and sub-Saharan African countries. Foreign workers were mainly employed in manual labour sectors, upholding the labour and retail markets with high percentages of workers from abroad. Prior to the recent
war and toppling of Qaddafi’s regime, foreign workers constituted an estimated quarter of the Libyan population.
During the first week of unrest in 2011, an estimated 13,500 workers from Egypt, Tunisia, Jordan, Syria, Vietnam and
China were evacuated, with over one million foreign workers awaiting evacuation. Foreign workers from southern
and central African countries have faced considerable controversy in post-Qaddafi Libya, due to the former practice
of using African workers and mercenary soldiers to carry out often violent militant acts against the local population.
This haemorrhaging of foreign labour has vastly changed the structure of Libya’s workforce in an economy that has
relied on a base of foreign workers for low-calibre manual labour. As Libya takes steps to rebuild its economy and
legal structure, the coming year will see foreign workers flooding back into Libya.
Libya also has the opportunity to create geopolitical and economic change in the region as it realises its plan to
become a regional hub of transport. A highway and train system linking Tripoli to Cairo will increase regional trade,
while an ambitious tourism and airport plan will increase regional travel. If Libya is able to reconstruct itself as a
secure, politically and economically sound country in the coming years, it will have an opportunity to become one
of the major players in the MENA region both economically and political in the future.
65
Libya: The Opportunities Post-Conflict
ADDITIONAL DATA
This section, which includes additional data on the Libyan national economy, the regional business environment
and global industries, has been compiled to provide further information that may be of interest to industry researchers and businesses interested in investment opportunities in Libya.
66
Libya: The Opportunities Post-Conflict
Political Risk Services
Libya Country Forecast
Reproduction without written permission of The PRS Group is strictly prohibited.
Country Data
Map of Libya
Tunisia
Zuwarah
�
✪
Tripoli
Mediterranean Sea
Al Khums
�
�
�
Gulf of Sidra
Misratah
Surt�
�
Ghadamis
�
Darnah
�
Banghazi
�
Ra's Lanuf
Al Burayqah
Hun �
Algeria
Sabha �
�
�
Tobruk
Li
Libya
by
an
D
Marzuq
Al
S A H A R A
Egypt
es
er
t
Kufrah �
�
Al Jawf
Ao
Niger
uz
ou
St
Chad
ri
p
Sudan
REV2003
Source : PRS Group
Page 2
Map
67
Libya: The Opportunities Post-Conflict
Social Indicators
2001-2005 2006-2010
Average
Average
Social Indicators
Population (mn)
Population Growth (%)
Infant Deaths/1,000
Persons under Age 15 (%)
Urban Population (%)
Urban Growth (%)
Literacy % pop.
5.69
2.1
27
35
77
2.1
79
6.30
2.0
23
33
77
2.3
85
2006
6.05
2.2
25
34
77
2.2
83
2007
6.17
2.0
23
33
77
2.0
84
2008
6.29
1.9
23
33
77
1.8
84
2009
6.42
2.1
22
33
77
2.1
87
2010
6.55
2.0
21
33
78
3.4
88
Source : PRS Group
Demographics
Population:
0-14 years: 15-64 years: 65 years and over: urban population: rate of urbanization: 6,597,960
32.8%
62.7%
4.6%
78%
2.1%
(July 2011 Estimate)
(male 1,104,590/female 1,057,359)
(male 2,124,053/female 2,011,226)
(male 146,956/female 153,776)
of total population (2010)
annual rate of change (2010-15 Estimate)
Median Age: total: 24.5 years male: 24.5 years female: 24.4 years (2011 Estimate)
Population Growth: 2.064% (2011 est.)
Birth, Death and Migration Rates:
24.04 births/1,000 population (2011 Estimate)
3.4 deaths/1,000 population (July 2011 Estimate.)
Labour Force: 1.728 million (2010 Estimate)
Unemployment Rate: 30% (2010 Estimate)
Source : CIA World Factbook
68
Libya: The Opportunities Post-Conflict
Economic Forecast
Source : Oxford Economics
Labour Force
2,350,000
2,350,000
2,300,000
2,300,000
2,250,000
2,250,000
2,220,000
2,220,000
2,150,000
2,150,000
2,100,000
2,100,000
2,050,000
2,050,000
Jan/06
Jan/08
Jan/10
Source : Trading Economics
69
Libya: The Opportunities Post-Conflict
National Income (US$)
50,000,000,000
50,000,000,000
45,000,000,000
45,000,000,000
40,000,000,000
40,000,000,000
35,000,000,000
35,000,000,000
30,000,000,000
30,000,000,000
25,000,000,000
25,000,000,000
20,000,000,000
20,000,000,000
15,000,000,000
15,000,000,000
10,000,000,000
10,000,000,000
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
Gross Capital Formation (% of GDP)
30
27.9
30
25.4
25
25
21
21.13
20
15
20
18.62
16.28
13.11
12.15
16.33
15.5
12.16
12.36
13.37
12.9
11.96
11.19
10
5
Jan/92
Jan/96
Jan/00
13.95
15
11.55
9.92
Jan/04
10
Jan/08
5
Source : Trading Economics
70
Libya: The Opportunities Post-Conflict
GDP Per Capita
Source : Oxford Economics
Manufacturing (as % of GDP)
6.5
6.28
6.5
6
6
5.5
5.5
5.09
5
4.71
4.5
5
4.51
4.51
4.49
4
3.5
4.5
4
3.5
3.14
3
3
Jan/02
Jan/04
Jan/06
Jan/08
Source : Trading Economics
71
Libya: The Opportunities Post-Conflict
GDP By Sector
Source : AfDB
72
Libya: The Opportunities Post-Conflict
Trade in Services
10
10
8.74
8.47
8
8
7.04
6
6.55
6
5.41
4.89
3.86
4
4
2
2
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
External Debt
Source : IMF
73
Libya: The Opportunities Post-Conflict
Current Account
Source : Oxford Economics
Foreign Direct Investment Outflows (% of GDP)
8
8
6.32
6
6
5.48
4
4
1.87
2
0.29
0.62
0.26
0.86
0.29
2
0.84
0
0
-0.69
-2
-2
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
74
Libya: The Opportunities Post-Conflict
Inflation
Source : Oxford Economics
CPI Inflation
140
140
120
120
100
100
80
80
60
60
40
40
20
Jan/81
Jan/88
Jan/95
Jan/02
Jan/09
20
Jan/16
Source : Trading Economics
75
Libya: The Opportunities Post-Conflict
Imports and Exports
Source : Oxford Economics
Goods Exports (US$)
80,000,000,000
80,000,000,000
60,000,000,000
60,000,000,000
40,000,000,000
40,000,000,000
20,000,000,000
20,000,000,000
0
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
0
Source : Trading Economics
76
Libya: The Opportunities Post-Conflict
Goods Imports (US$)
25,000,000,000
25,000,000,000
20,000,000,000
20,000,000,000
15,000,000,000
15,000,000,000
10,000,000,000
10,000,000,000
5,000,000,000
5,000,000,000
0
0
Jan/00
Jan/02
Jan/04
Jan/06
Jan/08
Jan/10
Source : Trading Economics
Foreign Trade
Exports
Imports
62.4
45.8
44.0
41.0
36.5
30.3
20.7
7.4
2008
17.9
8.2
2008
9.6
2008
22.0
24.1
11.9
2008
2008
2009
2009
Source : UNCTAD
77
Libya: The Opportunities Post-Conflict
Stage of Development
Source : Global Competitiveness Report
Business Constraints
Source : Global Competitiveness Report
78
Libya: The Opportunities Post-Conflict
Political Risk Summary
Source : AM Best
79
Libya: The Opportunities Post-Conflict
Industry Data
Agriculture & Agribusiness
Prices of Key Crops
1998-2007
highest 2007-2008
900
800
2008-2017
2017
700
600
500
400
300
200
100
0
Wheat
Maize
Rice
Oilseeds
Source : OECD
World Cereals Demand
3000
2500
1974
1997
2020
2497
2000
1843
1675
1500
1000
664
725
500
1118
822
1208
560
0
Developed
countries
Developing
countries
World
Source : IFPRI
80
Libya: The Opportunities Post-Conflict
World Meat Demand
350
1974
1997
2020
300
250
327
208
213
200
150
111
100
77
109
114
98
50
32
0
Developed
countries
Developing
countries
World
Source : IFPRI
Arable Land
1800
1600
1400
1200
1000
800
World
Developing
countries
2050
2040
2030
2020
2010
2000
1990
1980
1970
400
1961
600
Developed
countries
Source : FAO
81
Libya: The Opportunities Post-Conflict
Arable Land Expansion Potential
1,200
Million hectares
1,000
800
600
400
200
0
Latin
America
Sub-Saharan
Near
Africa
East/North
Africa
Arable land in use, 2005
South Asia
East Asia
Industrial
Countries
Transition
Countries
Additional land with rainfed crop production potential
Source : Bruinsma
Harvested Areas of Irrigated Crops
4.6
3.7 5.5 6
10.2
11.7
103.1
16.3
29.9
66.6
Potatoes
Barley
Pulses
Soybeans
Sugarcane
Managed Grassland
Cotton
Maize
All other
Wheat
Rice
54.8
Source : Government Office for Science (UK)
82
Libya: The Opportunities Post-Conflict
Banking & Finance
Global After-Tax Banking Profits (US$ bn)
Source : McKinsey & Company
Global After-Tax Banking Profits (%)
Source : McKinsey & Company
83
Libya: The Opportunities Post-Conflict
Global Investment Rate 1970-2030 (% of GDP)
Source : EIU
Global Investment Rate
Source : EIU
84
Libya: The Opportunities Post-Conflict
Food & Drink
Multi-National Revenues from Emerging Markets
50
45
40
35
30
25
20
15
10
Sara Lee
Hershey
Camp bell
Soup
Heinz
Kellogg
General
Mills
Danone
Unilever
Nestle
0
Kraft
5
Source : Estimates
Global Real GDP Growth vs. Food Production
Emerging Economies Real GDP Growth (%)
Advanced Economies Real GDP Growth (%)
Global Food Production (billion tonnes)
12
10
8
6
4
2
0
1990
1995
2000
2005
Source : IME
85
Libya: The Opportunities Post-Conflict
Global Retail Sales
18
13
8
3
2005
2006
2007
2009
2008
Non-food retail
food retail
Source : EIU
M & A Activity
# transactions
400
Deal Value ($ billions)
$120
# transactions
Deal Value ($ billions)
350
$100
300
$80
250
$60
200
150
$40
100
$20
50
$0
0
2005
2006
2007
2008
2009
2010
Source : GTCF
86
Libya: The Opportunities Post-Conflict
Healthcare & Pharmaceuticals
Global Pharmaceuticals Market Forecast
Source : IMS Health
Medical Tourism Industry
$100 billion
$40 billion
2004
2012
Source : McKinsey & Company
87
Libya: The Opportunities Post-Conflict
Top 15 Global Pharmaceutical Companies
Ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Corporation
Pfizer
Merck & Co.
Novartis
Sanofi-Aventis
Glaxosmithkline
Astrazeneca
Roche
Johnson & Johnson
Lilly
Abbott
Teva
Bayer
Boehringer Ingel
Amgen
Takeda
Source : IMS Health
Out of Pocket Spending
Middle income
Low income
Less than 10% 11% - 20% 21% - 30% 31% - 40% 41% - 50% More thAn 50%
Source : WHO
88
Libya: The Opportunities Post-Conflict
total population, billions
Global Population Forecast
Source : UN
% change in health expenditures
Impact of Demographic Change on Health Spending
East Asia and
Pacific
Europe
and Central
Asia
% change in total population
Latin America
and the
Caribbean
Middle East
and North
Africa
South Asia
Sub - Saharan
Africa
% change in age-sex structure
Source : World Bank
89
Libya: The Opportunities Post-Conflict
Infrastructure & Construction
Global Steel Consumption Trends
Source : ABARES
Global Infrastructure Spending Trends
Source : OECD
90
Libya: The Opportunities Post-Conflict
Global Infrastructure Spending Forecast
South America/Latin America $7.4
Dollars in trillions
U.S./Canada $6.5
Europe $9.1
Africa $1.1
Middle East $0.9
Asia/Pacific $15.8
Power $9.0
Road and Rail $7.8
Water $22.6
Air/Seaports $1.6
Source : OECD
91
Libya: The Opportunities Post-Conflict
Lifespan of Infrastructure Assets
Source : Macquarie
Construction Equipment Outlook
20.0%
7%
.
14
15.0%
10.0%
2%
8.
0%
.
12
8%
.
11
12
.
7%
8%
.
14
%
.8
% 4
.5 1
12
%
.7
12
%
2% 3.0
1
.
11
4%
6.
5.0%
0.0%
2010
2011
2012
2013
Source : AEM
92
Libya: The Opportunities Post-Conflict
Share of Construction Spending
Source : Global Construction Perspectives
93
Libya: The Opportunities Post-Conflict
Insurance
Global Premium Growth
Advanced economies
Gross Written Premium USD Bn
Total Premium USD
Emerging & developing economies
25%
5,000.0
4,500.0
20%
4,000.0
15%
3,500.0
3,000.0
10%
2,500.0
2,000.0
5%
1,500.0
0%
1,000.0
-5%
500.0
0.0
-10%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source : IMF
Emerging Markets Breakdown
100%
90%
80%
70%
60%
5%
10%
9%
18%
8%
7%
6%
16%
24%
10%
2%
13%
5%
15%
26%
40%
30%
65%
61%
43%
20%
34%
Population,
(5.8 Bn)
GDP,
(USD 21,250
Bn)
Non Life
Premium,
(USD 284 Bn)
Latin America &
Caribbean
South & East
Asia
10%
0%
Africa
Central &
Eastern Europe
22%
50%
Middle East &
Central Asia
Life Premium,
(USD 368 Bn)
Source : Alpen Capital
94
Libya: The Opportunities Post-Conflict
Top 10 Countries by Premiums Volume
Netherlands
South Korea
Life
Canada
Life Non-life
Italy
PR China
Germany
France
U.K.
Japan
U.S.
0
200
400
600
800
1000
1200
1400
Source : The Geneva Association
Premiums Breakdown
3.41
37.3 %
26.7
6%
5%
Asia
America
Europe
RoW
32.4
9%
Source : Swiss Re
95
Libya: The Opportunities Post-Conflict
Takaful Market Forecast
40%
35%
30%
25%
20%
15%
10%
5%
Middle East
China
South Asia
Europe
Africa
America
South East Asia
0%
Source : Institute of Islamic Banking and Insurance
96
Libya: The Opportunities Post-Conflict
Oil, Gas & Petrochemicals
Forecasted Energy Demand
Source : OPEC
97
Libya: The Opportunities Post-Conflict
Crude and Non-Crude Oil Supply
Source : OPEC
Global Product Demand
Source : OPEC
98
Libya: The Opportunities Post-Conflict
Global Capacity Requirements
Source : OPEC
Energy Use Per Capita
Source : OPEC
99
Libya: The Opportunities Post-Conflict
World Supply of Primary Energy
Source : OPEC
100
Libya: The Opportunities Post-Conflict
Real Estate
Performance of Property Assets
1 month
6 months
y-t-d
1 year
3 year
GPR 250 Global
2.4%
6.6%
-1.5%
69.4%
-16.9%
0.7%
0.29
GPR 250 Africa
5.9%
11.8%
5.8%
27.1%
9.8%
19.7%
0.22
GPR 250 Americas
5.2%
16.3%
0.4%
93.6%
-14.5%
1.5%
0.39
-0.5%
2.7%
-3.2%
57.7%
-20.0%
-1.9%
0.28
GPR 250 Asia
0.3%
-2.8%
-3.8%
56.6%
-15.9%
5.0%
0.30
GPR 250 Oceania
1.4%
3.1%
-1.5%
41.1%
22.7%
-6.2%
0.28
Global Bonds (JP Morgan)
0.5%
1.6%
1.3%
3.3%
4.7%
3.8%
0.04
Global Equities (MSCI)
2.0%
6.0%
-1.7%
46.9%
-7.1%
1.4%
0.20
GPR 250 Europe
5 year volatility
Source : Global Property Research
Commercial Real Estate Investment
US$ billions
206
200
188
203
158
150
137
Americas
65
69
73
EMEA
Q410
Q309
35
Q209
40
Q109
Q308
Q208
Q108
Q407
Q307
Q207
Q107
0
Q408
48
50
70
Q310
64
Q210
91
Q110
100
112
Q409
103
Asia Pacific
Source : Jones Lang LaSalle
101
Libya: The Opportunities Post-Conflict
Rental Price Change
Hong Kong
Singapore
Moscow
Sao Paulo
Shanghai
London
Brussels
San Francisco
Washington DC
Paris
Toronto
Sydney
Mumbai
Chicago
New York
Amsterdam
Tokyo
Frankfurt
Los Angeles
Madrid
Dubai
-35 -30 -25
% change
-20
-15
-10
-5
05
10
15
20
25
30
35
Source : Jones Lang LaSalle
Global Hotel Transactions
US$ billions
125
GLOBAL
Asia Pacific
EMEA
Americas
100
75
50
2011F
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
2000
25
Source : Jones Lang LaSalle
102
Libya: The Opportunities Post-Conflict
Retail & FMCGs
Sales Growth and Profitability by Segment
Source : Deloitte
Sales Growth and Profitability by Region
Source : Deloitte
103
Libya: The Opportunities Post-Conflict
Global Retail Sales Growth
Region
2007
2008
2009
2010
2011
2012
2013
2014
Source : EIU
Global Retail Sales
Region
2010
2011
2012
2013
2014
Asia and Australasia
6.5
6
6.5
6.3
6.6
Economues in transition
3.8
4.5
5.2
5.6
5.4
Latin America
5.2
4
5.1
5.8
6.6
Middle East and North Africa
3.1
3.6
3.2
3.6
4
North America
2.1
1.2
1.5
2.7
2.6
Western Europe
-0.5
0.2
0.8
1.1
1
3.5
3.2
3.7
4.2
4.4
World
Source : EIU
Top 10 Global FMCG Players
Top 10 Global Retailers
1) Proctor and Gamble
1) Wal-Mart
2) Nestle
2) Carrefour
3) Anheuser-Busch
3) Metro AG
4) Unilever
4) Tesco
5) Coca Cola
5) Schwarz Unternehmens Treuhand KG
6) PepsiCo
6) The Kroger Co.
7) Kraft Foods
7) Costco Wholesale Corp.
8) Philip Morris International
8) Aldi Einkauf GmbH & Co.
9) British American Tobacco
9) The Home Depot
10) Nokia
10) Target
104
Libya: The Opportunities Post-Conflict
Telecommunications & IT
Internet Structure
18,000
9,000
16,000
8,000
14,000
7,000
12,000
6,000
10,000
5,000
8,000
4,000
6,000
3,000
4,000
2,000
2,000
1,000
0
Internet Users (‘000) LHS
Broadband Internet Subscribers (‘000) RHS
2013
2012
2011
2010
2009
2008
2007
2006
0
Source : Strategy Analytics
Fixed Line Structure
4.200
20
18
16
14
4.150
4.100
12
4.050
Internet Users (‘000) LHS
Broadband Internet Subscribers (‘000) RHS
10
8
4.000
6
4
2
0
3.950
3.900
2013
2012
2011
2010
2009
2008
2007
2006
3.850
Source : Strategy Analytics
105
Libya: The Opportunities Post-Conflict
Mobile Structure
60.000
80
Internet Users (‘000) LHS
Broadband Internet Subscribers (‘000) RHS
50.000
70
60
40.000
50
40
30.000
30
20.000
20
10.000
10
0
2013
2012
2011
2010
2009
2008
2007
2006
0
Source : Strategy Analytics
3G Share of Global Market
70%
Subscriptions
60%
Revenues
50%
40%
30%
20%
10%
2013
2012
2011
2010
2009
2008
2007
2006
2005
0%
Source : Strategy Analytics
106
Libya: The Opportunities Post-Conflict
International Telecommunications Revenues
US$bn
5,000
4,000
3,000
2,000
2.727
2.727
2.152
2003
2004
2.727
2.972
2.883
2008
2009
3.033
3.268
2010
2011
3.526
3.799
2.425
1,000
0
2005
2006
2007
2012
2013
Source : TIA
International Spending Growth by Component
20
15.1
15
12.1
10
10.6
8.6
15.3
14.1
9.8
10.6
9.2
6.0
8.7
5
3.4
4.4
8.6
8.9
6.8
6.9
8.9
6.4
0
-5
-8.3
-10
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Equipment, Spport Services
Voice, Data, Video Services
Source : TIA
107
Libya: The Opportunities Post-Conflict
Tourism & Hotels
Global Tourism Share
Europe
North America
Middle East
Asia
Latin Amercia
Africa
Source : Scotia Bank Group
International Tourist Arrivals by Destination
1980
1985
1990
1995
2000
2005
2010
Source : World Tourism Organization
108
Libya: The Opportunities Post-Conflict
Global Tourism Share
Source : UN
Top 10 Global Hotel Groups
Top 10 Tourist Destinations by Arrivals
1) Intercontinental Hotel Group
1) France
2) Wyndham Hotel Group
2) United States of America
3) Marriott International
3) China
4) Hilton Hotels
4) Spain
5) Accor Group
5) Italy
6) Choice Hotels
6) United Kingdom
7) Best Western
7) Turkey
8) Starwood Hotels & Resorts
8) Germany
9) Carlson
9) Malaysia
10) Global Hyatt
10) Mexico
109
Libya: The Opportunities Post-Conflict
Transport & Logistics
Road Infrastructure
Total
Total
Growthinfrainfrastructure infrastructure
structure
stock 2000
stock 2010
2000-10
Annual
investmentinfrastructure
Annual
% growth
Regions
1. High-income/industrialised
3,951
4,587
636
63.6
1.61
2. Medium-income
1,177
1,450
273
27.3
2.32
3. Low-income/developing
4. Developing (low/medium
income)
1,001
1,143
142
14.2
1.42
2,178
2,593
415
41.5
1.91
East Asia and Pacific
681
811
130
13.0
Europe and Central Asia
371
442
71
7.1
Latin America and Caribbean
552
657
105
10.5
Middle East and North Africa
186
221
35
3.5
South Asia
231
275
44
4.4
Sub-Sahara Africa
158
188
30
3.0
6,129
7,180
1,051
259.4
World
1.71
Source : OECD
Value of Global Transport Industry
Source : Deloitte
110
Libya: The Opportunities Post-Conflict
Rail Infrastructure
Region
2000
USD-B
and (%GDP)
2010
USD-B
and (%GDP)
2020
USD-B
and (%GDP)
2030
USD-B
and (%GDP)
Industrialised
OECD
Non-OECD
26.9
31.1
34.3
33.4
(0.09%)
(0.09%)
(0.08%)
(0.06%)
0.8
2.3
2.5
3.4
(0.02%)
(0.06%)
(0.05%)
(0.06%)
12.2
13.3
15.0
(0.03%)
(0.06%)
(0.05%)
(0.04%)
1.9
3.5
3.4
6.3
(0.03%)
(0.04%)
(0.03%)
(0.04%)
34.0
49.0
53.5
58.1
(0.06%)
(0.07%)
(0.06%)
(0.05%)
Developing
Big 5
Others
World
4.4
Source : OECD
Modes of Transport
Source : Data Monitor
111
Libya: The Opportunities Post-Conflict
Market Shares of Key Players
Source : AXS Alphaliner
Trade Lane Growth
Trans-Pacific
5.6%
Trans-Altantic
3.1%
6.5%
Trans-Pacific
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
CAGR-2002 to 2015
Source : UN
112
Libya: The Opportunities Post-Conflict
Regional Data
Headline Corporate Tax Rates
Source : D & B
Corruption Perceptions
Source : D & B
113
Libya: The Opportunities Post-Conflict
Relative Competitiveness
Source : D & B
Rule of Law
Source : D & B
Comparative Market Indicators
Source : D & B
114
Libya: The Opportunities Post-Conflict
Comparative Risk Indicator Histories
Source : D & B
MENA Labour Force Growth
Source : World Bank
115
Libya: The Opportunities Post-Conflict
Regional Real GDP Growth
Source : PRS Group
Regional Inflation Rates
Source : PRS Group
116
Libya: The Opportunities Post-Conflict
Doing Business Regional Comparison
0.28
0.24
0.20
0.16
0.12
0.08
0.04
on
Ku
wa
it
an
ti
ou
Le
b
an
ib
Dj
Om
q
Ira
ne
Pa
le
sti
n
rd
a
ia
Jo
er
Al
g
UA
E
n
or
oc
co
M
Ira
a
isi
Tu
n
en
ia
Ye
m
Sy
r
pt
Eg
y
KS
A
0.00
Source : IFC
Average Number of Procedures to Start a Business
14
12
10
10.5
8
7.1
6
5.6
7.8
8.1
6.3
4
2
0
OECD
ECA
SA
EAP
MENA
Latin
America
Source : Doing Business Database
117
Libya: The Opportunities Post-Conflict
Starting a Business Regional Comparison
Region
Procedures
(number)
Time
(days)
Cost
(% of income
per capita)
Paid in Minimum
Capital
(% of income)
Middle East & North Africa (MENA)
8.1
20.0
38.0
104.0
East Asia & Pacific (EAP)
7.8
39.0
27.1
50.6
Eastern Europe & Central Central Asia
(ECA)
6.3
16.3
8.5
12.3
Latin America
10.5
43.6
35.9
3.8
Organization for Economic
Co-Operation and Development (OECD)
5.6
13.8
5.3
15.3
South Asia (SA)
7.1
24.6
24.5
24.1
Source : Doing Business Database
Paying Taxes Regional Comparison
Region
Payments
(number per year)
Time
(hours per year)
Total Tax Rate
(% of profit)
Middle East & North Africa (MENA)
21.6
194.1
32.8
East Asia & Pacific (EAP)
24.5
218.2
35.4
Eastern Europe & Central
41.7
313.9
41.2
Latin America
33.1
557.1
53.5
Organization for Economic Co-Operation and
Development (OECD)
14.2
199.3
43.0
South Asia (SA)
31.1
282.9
39.9
Source : World Bank
118