Libya’s reconstruction whets appetite of French companies

By Sarah Vernhes
Posted on Tuesday, 8 June 2021 12:20

Libya’s prime minister Abdulhamid al-Dabaiba and France’s President Emmanuel Macron on 1 June in Paris. Elysée Palace

Medef, France’s largest employer federation, wants to acquire large contracts within Libya’s reconstruction market. However, French groups are lagging behind Turkish and Italian firms.

Medef (Mouvement des Entreprises de France), France’s largest employer federation, does not want to miss its chance to get involved in reconstructing Libya. The network wants to join other foreign groups in improving the business climate in Libya that has seen some improvement following the establishment of an interim Government of National Unity (GNU) in February.

Medef arranged a meeting with Libya’s prime minister Abdulhamid al-Dabaiba on 1 June, the same day that France’s President Emmanuel Macron met with him in Paris.

Vinci, Total, Sanofi…

Dabaiba visited Medef’s headquarters in the 7th arrondissement for a few hours. He was accompanied by several ministers: Mohamed Hwej (economy), Ali Al Zanati (health), Mohammed Salem Al-Shahoubi (transport) and Mohamed Aoun (oil and gas).

Despite this wave of optimism, French companies remain concerned about the outcome of Libya’s presidential and legislative elections, which are scheduled for 24 December.

Patrick Kadri, the chairman and managing director of Vinci Construction Grands Projets who is also the president of Conseil d’Entreprises France–Libye, led the meeting. It was attended by around 15 representatives of major French groups including Vinci, Total, Denos and Sanofi. The discussions focused mostly on reconstruction of Libya’s health, airport, port logistics and security sectors.

Since the fall of Muammar Gaddafi’s regime in 2011, French companies have remained on the sidelines of Libya’s market. And the support that Paris gave to General Khalifa Haftar in 2019 further complicated business for the tricolour groups in Tripolitania.

Despite some recent attempts to organise forums in Libya, Medef’s last meeting in the country was back in 2012; but Dabaiba and President Mohamed El Menfi’s election in February has rekindled hopes that the crisis may soon end.

The launch of a policy aimed at reconstructing the country, which has been ravaged by several years of war, has whetted international appetites for future major contracts. Dabaiba has announced that he wants to allocate LYD22bn ($4.9bn) of the budget for projects and development.

Turkish competition

But on the ground, French firms may find it difficult to compete with Turkish and Italian companies. For instance, Ankara, which signed a maritime and military cooperation agreement with Fayez al-Sarraj’s government at the end of 2019, has continued to consolidate its commercial relations with Tripoli and announced the return of Turkish companies last April.

Ankara also benefits from its proximity to Dabaiba. The powerful businessman from Misrata has been doing business in Turkey for a long time.

The day before his visit to Paris, Dabaiba made a stop over in Italy – which is also hoping to secure contracts for the reconstruction programme. He met Italy’s prime minister, Mario Draghi, to discuss the possibility of reviving investments and reactivating the 2008 agreement – signed between Silvio Berlusconi and Gaddafi – to implement major construction projects.

Historically linked to Libya by its colonial past, Italy wants to regain its influence as it has been eclipsed by Turkey and Russia ever since 2019 when they became involved in reconstructing the North African nation.

Egyptian firms are also in the running. Egypt, which supported Haftar’s offensive on the capital in April 2019, is looking to develop a closer relationship with Libya’s new government. As a result, on 20 April, Cairo rushed to sign several MoUs in Tripoli within various sectors (electricity, infrastructure, health, etc).

An uncertain horizon

Despite this wave of optimism, French companies remain concerned about the outcome of Libya’s presidential and legislative elections, which are scheduled for 24 December.

“Everyone is waiting to see what will emerge from these elections, the holding of which is itself not certain. Nobody wants to invest before December and for the moment everything is blocked,” says a businessman operating in Libya who deplores this lack of stability.

In fact, the organisation of these elections is being hindered by negotiations between those who support a presidential system and those who prefer a parliamentary system. The revision of the constitution is also still up for debate.

It is difficult to say for certain whether Medef will send a delegation to Tripoli in the coming months. However, a visit to Tripoli before the December elections is being considered.

Understand Africa's tomorrow... today

We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.

View subscription options