Written by Amelia R. Lange
The ancient city of Sirte sits almost exactly on the line that divides modern Libya. In April this year, soldiers from the two rival camps trained together there for the first time in over a decade. In July their chiefs of staff met in the town and agreed to speak monthly. On 3 August the chambers of commerce arrived, bringing business leaders from Tripoli into the same room as their eastern counterparts. Three meetings in five months, in a place that used to be a front line.
Libya still has two governments, two prime ministers and no unified administration. The practical business of running a single country carries on regardless, and a growing share of it is being done by people who hold no political office at all. Mediation opens the door; commerce can help open it a little further.
Despite Libya’s entrenched divisions, what did not divide is the half of the picture few notice. The Central Bank of Libya never stopped being the sole issuer of the dinar. The National Oil Corporation remains the only entity a foreign company can sign with,. Libya has spent more than a decade with two governments and one economy, with the later proving more durable.
In February the oil corporation ran the first licensing round in seventeen years, putting twenty blocks on offer and awarding exploration contracts to consortia led by Eni and QatarEnergy, Repsol and Turkish Petroleum, along with Chevron, Nigeria's Aiteo and Hungary's MOL. It is worth being precise about what those companies signed. Not one of them contracted with a region, a faction or a family. Every one of them contracted with Libya, on production-sharing terms that run for years.
Two months later came the step that mattered more. The House of Representatives and the High Council of State approved a unified budget of 190 billion dinars, close to thirty billion dollars and the first since 2013, formally an annex to a development agreement between the two halves of the country The central bank governor, Naji Issa, called it a declaration that Libya could overcome its differences. The agreement settled no question of legitimacy whatsoever, and that is precisely why it could be signed. The two sides cannot agree on who governs Libya but they could agree on the numbers.
The private sector has been moving in the same direction, albeit with less ceremony. The Sirte forum came out of the General Union of Chambers of Commerce, a body that has continued to represent traders on both sides of the divide. Its recommendations were unglamorous: modernise commercial law, digitise trade documentation, build public-private partnership frameworks. None of this makes headlines but is the kind of activity that determines whether a lorry leaving Benghazi for Tripoli spends four hours at a checkpoint or forty.
Meanwhile, non-oil output grew by 6.8 per cent last year on the World Bank's reckoning. This is best being exemplified by a range of new private sector projects. Alushibe Holding Group, a Libya-based industrial holding is one example of a private enterprise that views now as the time for ambitious growth.
The company, founded and chaired by Libyan Industrialist, Ahmed Gadalla, is notable by its focus on non-oil industries. The Libya Cement Company is one of its longest standing companies, employing well over 1,000 people. Since being acquired by Gadalla’s company, ambitious development plans have been put in place to expand output to three million tonnes per annum.
To give you a sense of the company’s diversity, Alushibe Holding Group is also developing a major food and beverage complex at Zulfa, in partnership with Tetra Pak. This is in addition to a new iron and steel complex in partnership with Turkish giants Tosyali, building what will be the largest direct reduced iron facility not just in Africa, but the world.
This provides an idea of the opportunity the private sector now senses in the country. Business figures like Gadalla could easily put their money into other, ‘safer’ markets. Clearly they see something in Libya today that makes millions of dollars of investment worthwhile. The increasing economic, if not political cooperation, across Libya’s East-West divide must be a significant factor.
Libya has long appeared a conflict in stalemate. Politically, this may well remain the case for sometime yet. However, the emergence of high profile, long-term and financially backed private sector investments demonstrates that a healing economic divide is starting to bear fruit. Perhaps, commerce and enterprise can further open the door to longer term reconciliation.
