An action plan prepared by the Ministry of Economy to activate the establishment of free zones in many Libyan cities is being prepared, Nuri al-Gatati, Undersecretary of the Minister of Economy and Trade for Free Zones told Libya Herald in an exclusive interview.
The topic of free zones arose following the workshop on free zones held in Tunis last week (August 16-18) for the Libyan (Tripoli) Ministry of Economy and Trade’s team working on its Free Zone Strategy headed by al-Gatati. An earlier workshop on the same topic had also been held in Tunis in February.
The workshop was implemented by Expertise France and comes within the framework of the technical support provided by the E-NABLE project, implemented by Expertise France and funded by the European Union for a sustainable and resilient Libyan economy.
The workshop aimed to follow up on the mechanisms for developing a comprehensive national strategy for free zones to expand trade, improve the investment climate, and support economic growth and diversification in Libya.
It will be recalled that the Abd Alhamid Alabaiba led Tripoli-based Libyan government, through its Ministry of Economy and Trade and its Privatisation and Investment Board (PIB), is seeking to activate the plan to relaunch its free zones project.
Free Zones: to encourage investment, localisation of industry transit trade
The establishment of free zones in several regions of Libya is part of a broader plan to support investment inside Libya, localize industries and provide logistical services to establish a successful transit trade with Africa.
This comes within the framework of developing the country’s economy, which has suffered from various problems and distortions due to the oil shutdowns during the past years and the state of instability. The free zones project has also been delayed due to government bureaucracy despite serious attempts to support the existing free zones, especially the Misrata Free Zone and Benghazi’s Elmreisa Free Zone.
Several Free zones considered across Libya
In this regard, Undersecretary Al-Gatati told Libya Herald that the action plan prepared by the Ministry of Economy is to activate the establishment of free zones in many Libyan cities, including Zintan and Tamanhint in the Libyan south, and border free zones with Egypt, Tunisia and Algeria, as well as other free zones in several Libyan regions.
He said their establishment will be announced according to the need and interest and according to the particular investment map, which is compatible with the fair geographical distribution and residential density of Libyan cities in order to achieve spatial development and provide job opportunities for local and expatriate labour.
Libya behind in establishing free zones
Al-Gatati added, “Although the project of establishing free zones in Libya is not something new, and thinking about establishing them began since 2000, Libya still has not gone beyond the first steps in establishing free zones compared to other countries in the world, including Arab countries. This, despite the great economic feasibility achieved by establishing free zones, which enhance the competitive value of the Libyan economy, given the geographical location, as well as the existence of legal legislation that provides the appropriate environment for the success of free zones in their various specializations and areas of investment, whether industrial, commercial or joint.’’
Free zones increase diversification and reduce dependence on state jobs
Al-Gatati believes that the establishment of free zones is not an easy matter and is not an impossible task. This is especially with the presence of the will and political support. But also with the conviction of decision-makers, specialized government institutions and the private sector of the importance of free zones in attracting foreign investments and contributing to diversifying sources of income and reducing dependence on the government sector which suffers from unprecedented job congestion during the past decades.
PIB central role in free zones for foreign investors
Regarding cooperation with government institutions and agencies in activating the scheme for establishing free zones, Al-Gatati said, communication and coordination took place with the PIB, which plays the most important role in attracting foreign investors and registering them to enjoy the benefits and exemptions granted by the law to the foreign investor.
Local investors also encouraged to invest in free zones
There is also constant communication with local investors, such as the Libyan Fund for Internal Investment and Development, the National Oil Corporation, the Social Security Fund, and local commercial banks, to encourage investing in free zones such as the Elmreisa Free Zone in Benghazi, or financing and participating in some investors wishing to invest in these free zones.
Value-added foreign investment welcomed
Regarding foreign investors, Al-Gatati affirmed that the Ministry of Economy and Trade welcomes any foreign investor who wishes to establish a project inside Libya, whether commercial or industrial, through which it provides added value to the Libyan economy. These investors, he continued, would be granted the advantages, facilities and exemptions enjoyed within free zones in Libya,
The Undersecretary said the aim of establishing free zones contributes to achieving the goal of attracting foreign investments, localizing industries and acquiring skills for local cadres through direct contact with foreign expertise.
In conclusion, Al-Gatati said free zones provide a great addition to the Libyan economy, partners and investors from abroad, because, according to Libyan law, they are areas liberated from tax, customs, commercial, monetary and other restrictions, and open to all those wishing to invest or use them to achieve the purposes of the free zone.