By Sami Zaptia.
London, 24 March 2021:
The Libyan British Business Council (LBBC) held a webinar entitled “Demystifying Banking and Insurance for Trade with Libya” yesterday.
More than 100 banking, insurance and export promotion professionals participated to hear key-note speeches by Saddek El-Kaber, Governor of the Central Bank of Libya (CBL), and Damien Moore MP, the UK Prime Minister’s Trade Envoy to Libya and Tunisia.
Withdrawal from financial services
Encouraged by the recent political progress in Libya, participants noted that trade and finance discussions regarding Libya have not always been so optimistic. They noted that over the past seven years of conflict, Libya’s international partners, in the UK and elsewhere, have withdrawn gradually from financial services. Concerns over the country’s security situation and disputes between competing internal institutions were cited as prime factors.
But last month’s political gains by the new Government of National Unity have sent positive signals and that a reassessment of the Libyan market might be due. Participants on the webinar talked of planned business trips to Libya as soon as Covid travel restrictions are lifted.
Need for expansion of credit and debt facilities and products
The recent challenges posed by the liquidity problems, the split between the western and eastern based banks and clearing of accounts at some Libyan commercial banks was noted.
It is hoped that reform of Libya’s 2013 banking law will lead to an expansion of credit and debt facilities and products. With Libya having one of the highest percentage of population holding bank accounts in the Maghreb (67 percent), the potential for new financial services aimed at enabling Libyans to get more out of banking is deemed to be strong.
Trade finance expected to improve
In trade finance, corresponding banks remain limited in number due to Libya’s risk rating. But with limits on Letter of Credit values lifted in January and the country set for a period of peaceful rebuilding, foreign exporters hope to face more favourable conditions.
New e-payments law expected
With a new Libyan law governing e-payments expected in the coming months, participants in the webinar also had reason to believe that the UK’s experience in e-commerce and fintech will offer Libya useful lessons and that UK corporate decision-makers will consider entering the market.
Strong match between Libya and UK offers opportunity
While Libya may not be in the top tier of trading partners for the UK, it is seen as a potential target market. Former Ambassador to Libya, Peter Millett, explained on the webinar, that a post-Brexit Britain is eager to build its trade and investment ties with countries outside the EU and the UK enjoys a positive trade account with Libya. There is a strong match between Libyan requirements – training, financial services, consulting technology, manufacturing – and areas of British expertise.
Recent progress increases improved risk ratings
It was noted that while the recent news coming out of Libya is encouraging, these are of course early days. Further progress is needed. Nevertheless, such achievements would represent a remarkable turnaround from only 12 months ago when Libya was still in a midst of a disastrous civil war.
Overall, participants were realistic but upbeat. It was felt that the recent tangible progress will contribute significantly to the revisiting of Libya’s risk ratings.