The improvement in the political situation in Libya has had very positive consequences for trade with Italy so far: in the first four months of 2021, according to an annual statistic report by the Italian National Institute of Statistics (ISTAT) and the Italian Trade Agency (ITA), trade exchanges between the two countries exceeded €1.7 billion, with an increase of 87.9% compared to the previous period. In 2020, trade between the two countries had reached €2.60 billion, making Italy Libya’s second trading partner after Turkey (€2.89 billion) and ahead of China (€2.38 billion), Germany (€1.18 billion) and Spain (€0.92 billion).
The prerequisites are all there for Libya to regaining its position as a crucial market for Italian exports. A study by Cassa Depositi e Prestiti, an Italian publicly owned investment bank, predicts that Italian exports to the North African country will increase by 27.2% in 2021, by 8.6% in 2022 and by 6.2% in 2023-24.
These positive signals, combined with the will of the Italian government to support Libya’s economy during this delicate phase of political transition, have pushed the Italian Trade Agency to reopen its office in Tripoli. The country’s peaceful transition, managed by the UN, reached a first important result last March, with the election of the government of national unity led by PM Abdulhamid Dbeibah.
Romano Baruzzi, the experienced officer that was appointed as head of ITA’s Tripoli office, gave an interview to Decode39, in which he provides some interesting details on the state of the art of economic relations between the two countries.
“Even if we are still far from the historical peak of €15 billion [of trade exchanges] reached before the war, Italy remains the first destination market for Libya’s exports, with a market share of 31.5%” says Baruzzi.
In 2020 “more than half of Libya’s exports went to Italy and the support our country gave to Libya during such a negative year was decisive.” Italian imports are mostly composed of energy sources: crude oil accounts for 83% of our imports from Libya, followed by natural gas at 14%, and in smaller quantity by products deriving from oil refining, basic chemicals, fertilizers, and nitrogen compounds.
As for exports, “Italy is currently Libya’s third supplier country, after Turkey and China, with a market share of 9.5 percent” much more than Germany, Spain, the United Kingdom and France. “Italy sold €0.9 billion of goods in Libya in 2020, with a strong dynamism recorded by the mining, mechanical engineering and electrical appliances sectors” continues Baruzzi.
From 4 to 7 October, Tripoli will host the Libya Build fair. The fair, that was first held in 2004, represented the largest construction fair in North Africa and a reference point for the regional market until 2014, when it was closed due to the war.
Over 500 exhibitors and 14,000 visitors are expected to attend the eleventh edition of Libya Build. The Libyan construction sector has always been of great interest for Italian companies, and this is even more true today, at a time when Libya is in desperate need to rebuild its infrastructure, that was damaged during the war.
Given the importance of the fair for Italian companies, ITA created “an Institutional Support Office with the function of supporting Italian companies that will participate independently in the fair, and of overseeing / strengthening the Italian presence in the local market” also by setting up “an area within the exhibition center, which will act as a reference center for all the Italian companies present at the fair. These companies will be able to use the space for B2B meetings with local counterparts” and for exhibiting their advertising material.