According to a report from AFP, small businesses are prospering in Libya’s major cities even as the economy at large is being throttled by the security problems and industrial action which has hit oil revenues.
Chamber of commerce chief, Idriss Abdelhadi, said:
“These investments [in shops and boutiques] are thanks to partnerships with foreign investors ...
“[Such joint ventures have] promoted investment in the private sector at a time when the oil crisis has slashed the state budget, not allowing spending on planned development projects.”
Economic experts, however, stress that trade and services play a secondary role in the overall Libyan economy, with only little value added; the oil sector accounts for 70% of GDP, 95% of state revenues and as much as 98% of Libyan exports.
The World Bank recently stressed “the urgent need for economic diversification in order to ensure long-term financial and economic stability”, calling for reforms “to generate a vibrant private sector”, warning that “lack of access to financing, uncertainty in the legal environment and a fragile security situation” were key obstacles.
Ahmed Belras Ali, director of Libya’s stock market, warned of “a climate of fear among businessmen”.
“The stock market has lost an estimated 30% of its value because of falling share prices,” he told AFP.
Ali said hopes were pinned on the private sector, “which can serve as an engine of the economy, what with the current weakness of state structures”.
(Entrepreneurship image via Shutterstock)