Will Tunisia lose its share in Libya rebuilding?

Concerns rise within Tunisia’s business sector of losing Libya’s reconstruction deals, following Tunisian authorities tightening travel rules for businesspeople. Add to that rising tensions between Tripoli and Tunisia, while rivals, especially Egyptian companies, increasing moves to acquire the most significant share of the $110 billion projects.

The Government of National Unity (GNU) already signed $33 billion worth of contracts with Egypt to execute the signed agreements and memoranda in the coming months. The deal is equivalent to a third of reconstruction projects in Libya, revealed GNU economy and commerce minister Muhammed Al-Hawaij.

The closure of land crossing between Libya and Tunisia caused general depression among Tunisian workers and businesses preparing to negotiate reconstruction deals with Libya. Many Tunisian businesspeople expressed concerns about Tunisia losing its share in the Libyan market. At the same time, rivals such as Egyptian companies and the widespread of Turkish commodities flooded markets with essential goods.

Due to the Covid-19 pandemic outbreak in Tunisia, the Libyan authorities unilaterally closed the borders, in July, with tensions between both countries rising steadily for eight weeks, which required high levels of political mediation.
The border closing had followed strenuous efforts from business organizations and federations to regain Tunisia’s position in Libyan markets, with negotiations launched for Tunisian companies to participate in construction projects.

A Tunisian businessman said that blocks worked for weeks to guarantee Tunisia share in reconstruction projects, expected to be worth $10 billion in the coming months. But significant concerns surround those projects, with Libya turning into an open space for international and multinational companies, who are actively seeking a share for their countries as well.

Over the years, the Libyan crisis deepened wounds of Tunisia’s economy, facing dire difficulties due to uncertainty, political and social turmoil, and the decline in tourism and investment.

A recent World Bank report revealed that Tunisia loses about $800 million a year due to the Libyan crisis between investments and exports.

After the official Libyan authorities assumed their duties last March, a new trade scene was formed in the Tunisian border areas, which thrives on intra-trade with Libya, with its official and unofficial branches.

In contrast to concerns expressed by many Tunisian businessmen about their declining presence in Libya, fears of losing the Libyan market were fueled by media propaganda practised by some countries to confuse economic dealers, who are preparing to return to Libya after the reopening of the borders.

Some say Tunisia has a stable position in the Libyan market despite the conflict between significant countries over significant projects. Tunisia’s historical precedence in the Libyan arena makes its share of reconstruction deals almost guaranteed, with trade exchange volume exceeding $450 million during the first half of this year.


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