Key fact

Around $500m has been allocated specifically for projects in Libya’s health sector

Source: MEED

Boarding an aeroplane to visit your doctor is common practice among Libyans. As a result of sanctions imposed during the 1980s and early 1990s, the country’s healthcare system has been starved of the investment and medical training needed to build a modern infrastructure of clinics and hospitals.

Tripoli’s cumbersome decision-making process is putting off potential overseas investors

Those in need of specialist care now drive to Tunis or fly to Malta, Germany or the UK to avoid the staff shortages and overcrowding that have become a feature of Libya’s public hospitals, of which there are now little more than 100.

Government priorities

Tripoli is trying to stem the flow of medical tourists with a programme of public investment in new hospitals. Healthcare is a right guaranteed by the state under the 1973 Public Health Law number 106. The law aims to “promote the development of comprehensive healthcare, including public health, preventative services, mental health, occupational health and social care for the elderly”, with particular emphasis on promoting equity in access to healthcare systems.   

Life expectancy at birth for Libyans
  1990 2000 2008
Male  67 69 71
Female 71 74 76
Source: WHO 

In 2006, the Libyan prime minister Al-Baghdadi Ali al-Mahmoudi announced that education, health and social services infrastructure projects would be a priority for government spending. Around $500m was allocated for projects in the health sector, with preference given to attracting non-Libyan consultants and universities that could help bring international expertise to the country’s hospitals.

The development of an effective information and communication technologies system was also singled out as a priority for investment.

In the most recent healthcare spending announcement, the Libyan Investment Authority (LIA) announced in 2009 the establishment of a LD20bn ($15.7bn) Libyan National Fund for Domestic Development, specifically to invest in local markets. The new fund will cover sectors including healthcare, with the LIA looking for joint investment projects or partnership initiatives that will help develop Libya’s hospital system. Abdulfatah Enaami, head of direct investment at the LIA identified medical insurance as one such area for investment. “The management of the fund would be more than willing to talk to medical insurance firms about creating services for the sector,” he says. 

Libya health expenditure 
(As a percentage of GDP)
2000 2007
3.7 2.7
(GDP=gross domestic product)
Source: WHO 

Since the 2006 healthcare spending announcement, a number of international training and cooperation partnerships have been signed. In May 2008, the Libyan and British governments signed a memorandum of understanding on medical training. Libyan medical staff are given a year’s training in the UK’s National Health System, in areas such as intensive care and endoscopy, while the UK’s Royal Colleges are training Libyan surgeons in specialisms such as obstetrics. In December 2009, the UK’s Liverpool John Moores University (LJMU) secured a contract with Tripoli’s Alfateh Medical University, to run bachelor’s and master’s degree programmes in nursing.

The shortage of Libyan nurses is acute, as demonstrated by figures from Benghazi Medical Centre, where 88 per cent of the 545 nurses currently working at the hospital are non-Libyan nationals. In a bid to train more local nurses, the contract includes support to train existing members of staff at the faculty of nursing, as well as advising on the development of the nursing curriculum to improve standards.

LJMU has secured an estimated £1.2m ($1.9bn) of business in Libya, a sum that it is hoping will rise with the delivery of specialist training programmes for Al-Omar Asker hospital in Tripoli – the contract for which is currently being negotiated. Another major international cooperation project is the 300-bed Benghazi Medical Centre, which was inaugurated in September 2009. Financed by France’s development agency AFD, phases two and three of the hospital project are in the feasibility study stage. France and Libya signed a healthcare cooperation agreement in 2007. Paris has since provided medical equipment for radiology, neurosurgery and cardiology for several hospitals.

Policy confusion

But Tripoli’s cumbersome decision-making process is, as in many other sectors, putting off other potential overseas investors, who say they are confused as to the focus of Tripoli’s healthcare policy. In the 2009 budget, the finance ministry announced it wanted to build a series of new, large public hospitals with the help of the private sector – namely through public finance initiatives or public-private partnerships. However, the health ministry says it wants the policy focus to be on primary healthcare, rather than large physical infrastructure.

“Against that backdrop, if you’re looking to invest, you have to work out which ministry is going to win,” says a London-based investor. “A lot of people think the big infrastructure projects are the most attractive, but that primary healthcare makes more sense.”

The LIA’s Enaami says private healthcare provision has already become a reality for Libyans. This suggests increased private healthcare provision is the likely direction for the short to medium term. “The general public is now more accepting of having to pay for medical care and treatment; previously, if it wasn’t free then the people would not accept it,” he says.

Funding available

Stuart Smalley, consultant at the UK’s Department of Health International, which works to promote the best of British healthcare worldwide, is also optimistic about the prospects for progress in investing in Libyan medical services. Speaking to an audience of British and Libyan healthcare professionals and potential investors in Tripoli in February, Smalley addressed the issue of whether a precise plan for the development of the private healthcare sector in Libya has been drawn up.

“A lack of finance has been the problem in the past, whereby we have failed to unlock the funds at the last minute,” he said. “But, on the Libyan side, the funding is now in place. I believe we need to progress in small steps – we can’t cater for the entire country at once.” 

As a result of the lack of clarity in Libya’s healthcare policy, the biggest growth area has been the building of relatively small, private hospitals. No large, public hospital projects have been announced this year. Building hospitals on a small scale limits the long-term capital commitment required, which makes funding easier to access. While Tripoli’s confused messages on healthcare policy are deterring potential investors to some extent, the international banks’ lack of appetite for financing large projects is also helping to determine the kind of hospital project that will secure the necessary funds.

In the absence of new public hospital building projects, the Gaddafi Development Foundation is spearheading educational partnerships with overseas hospitals and universities to raise the standard of training for Libya’s healthcare professionals. In a 2009 statement, a spokesman for the foundation said: “Every major hospital will become an ‘educational hospital’, managed by an already-established international hospital that will provide training for management and processes for the next five years, with 20 hospitals currently targeted for this purpose.”

Al-Marg hospital in eastern Libya is one such hospital. The UK-based International Hospitals Group was this year awarded a contract to manage the facility for five years, providing clinical, managerial and project staff to work alongside local Libyan and expatriate staff. In common with many of Libya’s ageing hospitals, Al-Marg has recently been refurbished and re-equipped.

Thanks to this programme of refurbishment, medical equipment suppliers have been doing good business in Libya. Although the requirement to have a local agent to supply the equipment has resulted in some contracts falling through, there has been a string of contract wins announced in the past two years.

In April 2009, Australia’s IBA Health Group was awarded a two-year, $1.2m deal to implement an iSOFT hospital information system and a laboratory at Al-Khadra Hospital in Tripoli. Dutch medical equipment company EN-Projects was awarded the contract to refurbish Garyounis University Medical Hospital’s physiology, pharmacology, morbid anatomy and haematology departments. The work involved commissioning and installing the equipment in the four departments.

While these relatively small-scale refurbishment projects are providing opportunities for medical equipment suppliers, one major private hospital project is due to open its doors by the end of this year. The Libyan European Hospital (LEH) will open in Benghazi and will be the first new hospital in the country managed by a European company, Germany’s Epos Group.

The firm commissioned the hospital and will operate it and recruit all the staff. It will open with 52 beds in the first phase, and operating to the full, 150-bed capacity approximately six months later. Once the Benghazi hospital has opened, Anwar Mousa, managing director of the Mercantile Group in Libya – the LEH’s owners – plans to build another, 200-bed hospital in Tripoli. A feasibility study was carried out in 2009 for the scheme.

The Mercantile Group took advantage of Libya’s law number five, which promotes foreign investment by providing a range of exemptions from taxes and duties, repatriation of invested capital and export of net profits, when it started work on its first project in 2005.

The project was funded by the local Sahara Bank and Mousa believes that by establishing a track record through the LEH project, securing funding for further projects will be easier. With no government framework for public-private partnerships in place at present, this model of financing is likely to be the only one available for new hospitals.    

“I think that for those people looking to support Libya by investing in relatively small private healthcare facilities, so long as there is a clear path in terms of licences and a framework for inward investment, it makes a great deal of sense,” says the UK-based investor. The bigger challenge is creating a coherent policy framework for Libya’s public healthcare system as a whole.

With strategic planning disorganised and inefficient, hospital governance is in need of a overhaul. Until Tripoli is clear about what kind of public healthcare system it wants and how it will be governed, few large-scale public hospitals are likely to be built in Libya and small, private medical provision will continue to be the norm for both investors and patients alike.