LONDON (Reuters) - Libya is expecting nearly $2 billion in new foreign direct investment, Libya’s privatisation and investment secretary said on Thursday.
“We have over $2 billion operating in FDI in Libya and we have almost $2 billion in process,” Mahmud al-Ftise told Reuters on the sidelines of a Libya investment conference in London, without giving a time frame for the investment.
“This number is humble but we are really relaxed because the numbers are increasing. Libya has very big potential.”
Libya is also working on attracting investment totalling around $2.7 billion in the downstream oil industry, al-Ftise added.
International investors see huge untapped potential for growth in the North African country, which was starved of investment during years of Socialist policies and international sanctions.
Libya’s relations with the West took a leap forward in 2003 when it gave up banned weapons programmes and again last year when it agreed with the United States to settle compensation claims for attacks, including the 1988 Lockerbie airliner bombing.
Gaddafi’s foreign-educated son, Saif al-Islam, has helped push through economic reform measures, and the capital is now dotted with construction cranes building new hotels and business centres.
But some investors’ enthusiasm has been tempered by red-tape, a creaking bureaucracy and uncertainty over how well protected property rights are in Libya.
Foreign investors complain of obstacles such as restrictions on visas.
Al-Ftise said Libya was beginning to introduce visas for investors on arrival at Libyan airports, rather than from individual embassies.
“That is starting now, we are hoping it will come in probably after a month,” he said.
However, he said relaxation on visas was a two-way process with countries such as Britain.
“If you ease things here, we will ease things there.”
Libya has privatised more than 100 companies since 2003 in industries including oil refining, tourism and real estate, of which 29 are 100 percent foreign owned.
The oil and gas sector still dominates the economy and is the destination for most foreign investment. BP and Exxon Mobil are among the international oil majors active in the sector.
Libyan banks are allowed to enter partnership agreements with foreign banks but the foreign partners are restricted to a 49 percent stake. Al-Ftise said foreign investors can take 100 percent ownership in other sectors.
Abdulmagid el-Mansuri, chairman of the industry ministry’s foreign investment committee, also told Reuters that Libya was planning free trade zones for individual countries, in addition to Libya’s existing free trade zone in Misurata.
“We are suggesting that countries have special free trade zones, that for example China takes an area. We are targeting potential investors like the U.S., UK, France, Germany, Italy and the Far East. They are all showing an interest because of our location.”
El-Mansuri said Libya would clamp down on investors’ use of non-Libyan agents when fixing deals in the country, but investors should deal directly with Libyans.
“It’s not fair, there should be direct contact with Libyans. The government is going to enforce the law on this quite strongly.”