With $94bn of infrastructure and housing projects planned or ongoing, contractors are eager to win work in Libya. But the message from consultants already working in the country is simple: be patient.
Libya is exciting for the construction industry for several reasons. One of the most obvious sources of excitement is its energy reserves. At present, Libya has Africa’s largest proven reserves of oil and 70 per cent of its $91bn-dollar gross domestic product (GDP) is directly linked to its production or manufacturing. With no government debt and an annual spending plan of just $21bn, the country has a lot of cash.
The country’s need for development is matched only by its ambition to modernise quickly and efficiently. Three decades under embargo and 40 years of almost no development has created a huge need for everything from basic infrastructure to seaside luxury resorts.
Put simply, Libya needs everything and has more than enough cash to pay for it. But while the country’s potential is exciting, there are also risks.
Contractors and consultants already working in Libya say they face five main challenges:
- Tripoli’s political will to move ahead with development needs to be unrelenting, even in the event of setbacks. And, setbacks will happen.
- Contractors and developers need to carry out projects with integrity, despite what experts call ample temptation to cut corners.
- Libya needs to empower building professionals to allow them to meet their deadlines with minimal distraction. The simple formula being, when deadlines are met, costs are reduced.
- There is a direct relationship between transparency in the political system and foreign investment. An increase in the former leads to an increase in the latter. But the lack of transparency in government represents significant risk to potential investors.
- Building professionals need to commit themselves to Libya. They need to put in the time, energy and resources to meet people, build relationships and work through the system. Those companies looking to have a presence in Libya need to be patient and allow it to happen.
Being patient during these challenges will be key to success in North Africa’s most promising projects market.