Exploring North Africa
I arrived in Tripoli, Libya’s capital and largest city, on a short flight from Athens, Greece, so I appreciated the closeness of this North African country to Europe. Libya is right on the Mediterranean and has Egypt, Sudan, Chad, Niger, Algeria and Tunisia as neighbors. Libya is a huge country (1.8 million square kilometers) but 90% of it is desert. The population is only about six million, with about two million living in Tripoli.
Libya at various times in its history was inhabited by Phoenicians, Greeks and Romans. It later became part of the Turkish Ottoman empire and then an Italian colony. We got a taste of its ancient history when we took a two-hour drive out of Tripoli to the ruins of the ancient city of Leptis Magna, one of the largest cities in the Roman empire, built by the Roman emperor Lucius Septimius Severus, who came from this area. We were dumbstruck by the Leptis Magna ruins. They are among the most impressive I’ve seen of Roman ruins. This is one reason I believe the potential here for hospitality and tourism is tremendous.
After a long period of strained relations with the West, Libya has made considerable efforts since 2003 to normalize and improve diplomatic ties. These include abandoning its weapons of mass destruction programs and paying compensation to the families of victims of the bombings of Pan Am flight 103 (in 1988) and UTA Flight 772 (in 1989). As a result, most international sanctions against the country were lifted in 2004, and in 2006, the U.S. removed Libya from its state-sponsored terrorism list on which Libya had stayed for 27 years. Since then, Libya has attracted a wave of interest from international companies operating mainly in energy and construction. Our hotel was full of business people, particularly oil company executives and oil field employees working on the country’s extensive oil and gas deposits – Libya has the largest oil reserves in Africa.
More importantly for us as investors, the government is moving to privatize state enterprises and develop a capital market. We visited the nascent stock exchange and were impressed by the good systems in place. Only a handful of stocks are listed now, but with many more state-owned companies in areas such as infrastructure, power and telecoms destined to be privatized and listed, we expect that the opportunities to invest in this market will expand. Since 2003, more than 100 government-owned companies have been privatized in the oil refining, tourism and real estate areas.
This development was in contrast to my next destination – Algeria. The government stated that it does not intend to privatize state-owned enterprises and seems to be moving in the opposite direction, to make private companies public or state-owned. Of course, with the country’s substantial oil and gas revenues, the government has the money to do that. Nevertheless, when we visited companies to explore possibilities for investment, I got the feeling that the country holds a lot of opportunity for private enterprise – the people seem to embody a strong entrepreneurial spirit.
We expect to return soon to this region and begin investing once conditions are optimal. Optimal conditions would include having a custodian bank established in Libya to safeguard securities purchased there, as well as seeing improvements in the privatization system in Algeria.