Egypt seeks opportunities in Libya’s reconstruction

August 5, 2019

Egypt is working to ease the entry of tens of thousands of Egyptian workers to eastern Libya as that part of Libya becomes more politically stable.

Egyptian and Libyan authorities have established two coordination offices along the countries’ borders to coordinate the entry of Egyptian workers into Libya for reconstruction purposes.

“The parliament and the Labour Ministry work to ease the participation of Egyptian workers in Libya’s reconstruction in coordination with Libyan authorities,” said Abdel Fattah Mohamed, a member of the Labour Committee in the Egyptian parliament. “Improving security conditions in Libya will increase the flow of local workers to this country.”

Millions of Egyptians worked in Libya before the country descended into chaos in 2011. Egyptians worked in all sectors of the Libyan economy, especially in construction.

After 2011, Egyptian nationals were targeted by Islamist militias, a drive that manifested itself brutally in February 2015 when the Libyan branch of the Islamic State killed 21 Christian workers.

Soon after that incident, a huge number of workers returned home, swelling the ranks of the unemployed in Egypt.

Their return was viewed by security analysts as a conspiracy by Egypt’s regional rivals, especially Turkey and Qatar, which sponsor Islamist militias in Libya, given the size of remittances sent home by the workers as well as the burden their return constituted to the Egyptian economy.

To avoid the possible unrest stemming from the inability of those returning from Libya to find work, Cairo initiated tens of billions of dollars in construction projects, including new cities, roads and bridges. Those efforts were also part of Egypt’s overall development plans.

Libyan trade union officials visit Egypt to hammer out deals and draw attention of the needs of post-war Libya to Egyptian construction companies.

A Libyan Trade Chambers Association delegation visited Egypt in March and met officials at the Federation of Egyptian Industries. Mohamed Raied, who led the delegation, referred to strong demand in Libya for Egyptian construction companies and workers

A delegation of Egyptian businessmen visited eastern Libya in May to assess business opportunities and needs.

“Our companies are ready for Libya’s reconstruction at all levels,” said Walid Gamal Eddine, chairman of the Construction Materials Export Council. “We are still waiting to be part of this reconstruction, even through partnerships with Libyan companies.”

Apart from being an opportunity for Egyptian labour, Libya’s reconstruction opens business opportunities for Egyptian construction material producers, especially in the presence of huge surpluses.

In 2018, for example, there was a cement production surplus of about 33 million tonnes. Egypt’s overall cement production was expected to reach 100 million tonnes by next year.

Libya’s infrastructure, tourism, electricity and communications sectors are especially of interest for Egyptian companies. Projects in the first phase of Libya’s reconstruction are expected to cost approximately $20 billion to implement, the Libyan Trade Chambers Association said.

Major Egyptian construction companies are reportedly contacting financing agencies, including the African Development Bank, the World Bank and the European Investment Bank, to bankroll projects in Libya.

However, shaky security conditions could scare companies away from Libya.

Competition from Chinese and Turkish companies is another challenge for Egyptian firms, especially with most companies from those counties not having the same financing problems Egyptian companies face.

Egypt, economists said, is in a good position to win a share of Libya’s reconstruction because of its proximity to Libya and the strong relations between Cairo and eastern Libya authorities.

“State authorities have to offer backing to national companies as they try to be part of Libya’s reconstruction,” said Yumn al-Hamaqi, an economics professor at Cairo University. “Egypt has to take Libya’s reconstruction very seriously before it is left out of this process, especially in the presence of fierce competition from other countries.”

Libyaninvestment