Trade, Industry & Automotive
From The Report: Misrata 2024
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Trade has played a significant role in Libya’s economy since the early 2000s, although it faced significant challenges due to economic and trade sanctions imposed by Western governments prior to the revolution. There has been a modest resurgence in trade, particularly as stability has improved with trade partners keen to capitalise on Libya’s strategic location. Misrata’s transit trade endeavours align with Libya’s long-standing objective of diversifying its economy away from hydrocarbons.

Libya’s industrial landscape has undergone a significant evolution starting in the 1990s, resulting in manufacturing’s share of the economy increasing considerably. Today, manufacturing is a key driver of the economy in Misrata, with subsectors such as construction materials, plastics, automotive and food processing contributing significantly. Major industrial sectors in the region include manufacturing, port and maritime activities, and oil and gas. Misrata has sought to diversify by attracting investment and fostering growth in targeted sectors. The establishment of the Misurata Free Zone in 2000 has been a major catalyst for industrial development, offering tax incentives and attracting both local and international companies. As capacity expands, continued development of transport networks and power supply will be important growth enablers, as will ensuring reliable access to finance and skilled labour.

The automotive industry plays a significant role in the local economy, contributing to employment, trade and economic growth. The industry has experienced periodic disruptions in production and supply chains due to political instability and conflict. However, efforts are being made to revive and strengthen the segment, and stability has been gradually returning.

This chapter contains interviews with Abdallah BenNaser, Chairman, Almadina Misurata Paints; Mohamed Al Faqih, Chairman, LISCO and Naohiro Masuda, Managing Director – CEO, Toyota Libya.

Articles from this Chapter

Overview

Gateway market:
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Trade has played a significant role in Libya’s economy since the early 2000s, although it faced significant challenges due to economic and trade sanctions imposed by Western governments prior to the revolution. The outbreak of the civil war in 2011 had a detrimental impact on economic growth. However, in recent years there has been a modest resurgence in trade, particularly as stability has improved. Libya is a member of several international organisations, including the Arab Monetary…

Analysis

Trade with the EU:
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Among the countries in the so-called Southern Neighbourhood region – comprising Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria and Tunisia – Libya is the only one yet to conclude an association agreement with the EU. This is attributable to the security and stability concerns of recent years. Libya ranked 47th among the EU’s trade partners in 2020. However, as Libya’s largest trading partner, the EU accounted for 51% of the country’s global trade in goods during the same period, with trade in goods reaching €7.8bn. Imports from Libya to the EU amounted to €4bn, the majority being fuel and mining products,…

Analysis

Trade with Turkey and Russia:
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In 2020 the Libyan government signed economic and trade agreements with Turkey. This partnership aims to revive 184 stagnant construction projects in Libya, worth some $16bn. Libya’s minister of planning has emphasised Turkey’s significant involvement in national projects and highlighted that Turkey’s infrastructure initiatives constitute around 20% of all projects contracted between 2008 and 2012, establishing the country as a top economic partner. The agreement has enabled Turkish companies to return to Libya and resume a substantial share of delayed projects, amounting to more than $28bn in value, facilitating the execution…

Interview

Higher value: Abdallah BenNaser, Chairman, Almadina Misurata Paints
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Interview:Abdallah BenNaser How have recent supply chain disruptions impacted raw material imports and manufacturing in Misrata and the broader region? ABDALLAH BENNASER: The recent global disruptions resulting from the Covid-19 pandemic led to more than a 100% price increase for certain raw materials and higher shipping costs, particularly from China. Additionally, factory closures worldwide due to fuel and gas shortages brought on by Russia’s invasion of Ukraine contributed to a scarcity…

Analysis

Misurata Free Zone’s role in regional trade:
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The Mediterranean Sea serves as a core international trade route between Europe, the Middle East and Asia. It is the passage for around 10% of global container traffic and 20% of seaborne trade each year. Furthermore, some 20m passengers traverse this vital waterway annually. Positioned strategically in the middle of this maritime route, connecting the Suez Canal and the Strait of Gibraltar, Misrata benefits from an advantageous geographic location. This location grants the city easy access to a prominent shipping lane that spans the Ionian and Adriatic seas, providing services to the ports of northern Italy, Central Europe and the…

Interview

Competitive edge: Mohamed Al Faqih, Chairman, LISCO
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Interview:Mohamed Al Faqih How does infrastructure in Misrata support manufacturing, and what role do large infrastructure projects play in supporting local industries? MOHAMED AL FAQIH: Manufacturing has been confronted with the challenge of intermittent electricity supply in recent years. However, the improved consistency of power supply has resulted in an increase in production output, highlighting how our physical infrastructure is capable of supporting the current level of manufacturing…

Overview

Evolution of industry:
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Libyan manufacturing historically focused on processing domestic crops, livestock products and handicrafts. Benghazi and Tripoli were the country’s primary centres of industry, with Italians owning a significant share of many enterprises. After the 1969 revolution the government reconfigured its industrial policy to gain control over sensitive and large-scale production and reduce foreign influence. They required local trading companies to be Libyan-owned and nationalised those owned by Italians. The government then shifted its focus to developing light processing and petrochemical industries. Food processing was also a priority, resulting…

Analysis

Key subsectors:
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Historically, Misrata’s manufacturing industry was oriented around traditional activities such as handicrafts, weaving and agriculture. As a result, the local economy was primarily centred around subsistence activities like farming and fishing. However, in response to technological advancements and the growing influence of globalisation, the region’s manufacturing sector has diversified into various fields over the decades, including textiles, chemicals, plastics, construction materials, electronics and consumer goods. Misrata’s current manufacturing segment encompasses a wide range of industries involved in transforming raw materials into…

Overview

Advancements and innovation:
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Misrata’s manufacturing segment has witnessed significant technological advancement and innovation. Automation and digitalisation have begun improving production processes, efficiency and productivity in some cases. Advanced machinery, such as computer numerical control machines and robotics, is being adopted to streamline operations and reduce costs. Digital technologies and data analytics are similarly being utilised to optimise inventory management, enhance supply chain efficiency and enable customisation. Innovation is also taking place in terms of materials and design. Companies are investing in research and development to create more…

Overview

Automotive landscape:
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The automotive industry plays a significant role in the local economy, contributing to employment, trade and economic growth. Between 2005 and 2011 annual sales of passenger vehicles in Libya ranged from 35,000 to 39,000 units. This fell significantly in 2012 but had recovered by 2015. Although the national automotive market has been slow to rebound from its decline to 11,000 vehicles sold in 2017, which was driven by political instability and an uncertain market for consumers, by 2019 motor vehicle sales had reached 22,500 units, up 25% on the previous year’s 18,000 units. Of this total, 16,100 were passenger vehicles. The industry has…

Analysis

Market performance:
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Motor vehicle sales in Libya are influenced by a variety of factors, notably the domestic political environment, national and global economic conditions, and cyclical or other evolutions in market demand. In the decade to 2015 the number of registered motor vehicles nationwide nearly doubled, from 1.48m to 2.74m units. More recent growth can be attributed to improved stability and increased consumer confidence in the country, leading to higher purchasing power and greater demand for vehicles. This positive trend suggests a potential for market expansion and investment opportunities in the automotive segment, particularly as increased stability…

Interview

Driving growth: Naohiro Masuda, Managing Director – CEO, Toyota Libya
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Interview:Naohiro Masuda How do you assess the automotive industry following the Covid-19 pandemic and other economic challenges in recent years? NAOHIRO MASUDA: During periods of civil conflict or economic disruption, it is difficult for consumers to make large purchases. As we move beyond the pandemic and instability in the past decade, consumers are beginning to have a higher level of financial certainty, resulting in consumer confidence. Economic growth and new job opportunities in…