The Malta Chamber of SMEs welcomes MCESD Chairperson David Xuereb to its offices
01 February 2024
Malta Chamber of SMEs President Mr Paul Abela and Deputy President Mr Philip Fenech welcomed...
GRTU Director General Vincent Farrugia has today written to the Minister for Finance Mr Tonio Fenech regarding an urgent request to assist Maltese companies re-starting in Libya.Developments in Libya are taking place at a fast pace, and this is information that GRTU has learnt at first hand through its representative, Mario Debono, on the ground there. GRTU is currently pleased to witness a new Libya emerging. Businesses are slowly starting up again.
The banks are operating. Imports have started. Companies from around the world are already swarming the country and seeking to establish themselves as swiftly as possible.
GRTU told the Minister that he is abundantly aware what an important role Libya played for the Maltese economy and how important it is for a good number of Maltese companies, companies who have invested for years, through thick and thin, and have seen their life's work lost in a matter of days. These companies as a consequence are not strong enough to re-settle and re-start with immediate effect. Malta as a country however cannot afford to have the sectors and ground, which was once so cultivated by the Maltese, is taken by other foreign companies. The current moment is crucial and action is of utmost importance. We swiftly need to act to re-establish and fill in the old gaps, but more importantly, to fill the vacuum that the war has left. We strongly regret that in spite of our most active presence through our members in Libya, a presence which is recognized and regularly confirmed by all leading Libyan new authorities, Government fails to discuss in a structured way the way forward for Libya. It is in fact due to this lacuna that we present our views in writing.
Maltese companies need help, urgently. Malta will lose out unless Government is smart and quick enough to recognise what is at stake and set up a Libya Special Business Support fund to help businesses get contracts and mobilise. No Maltese company and consortium will be able to start in Libya unless they are backed up by a significant amount of capital. Even medium sized contracts are currently out of the reach of the Maltese companies as no Maltese company can rely on its Maltese borrowings and compete in Libya. Mobilisation costs for instance are simply too high. We must commence urgent discussion in relation to all options available to get this Fund in motion as a matter of urgency.
Government must react to this reality immediately and be aware what we would be losing. Libya as a country has sustained a lot of infrastructural damage, but therein lies the tremendous opportunities for our construction and civil augmenting contractors. Libya's people have billions hidden away, with nowhere to invest them in. These undeclared funds are estimated to total 13 Billion dinars in Tripoli alone. The Government is doing its utmost to attract these funds to the banking system, but no one in Libya trusts the banks. It's estimated that in the next years, the Libyan government has to provide at least 100,000 units of housing. With families having an average of 6-8 children, demand for housing has always been acute. As such, a classic property boom is in the making. Our Construction industry can have a role in both major infrastructural projects as well as residential projects, besides the oil projects opening up.
GRTU insists that the Government sets up a Special Guarantee Fund of at least €50M solely to help Maltese companies with funding to invest in Libya. It is also time we set up a venture capital bank. We must discuss with urgency the options available to Government and the private sector that enable the financing of this Special Fund. An option may be the floatation of a Libya Fund on the MSE in order to help Maltese companies with their capital requirements in Libya.
Libya may be the salvation of our excess business capacity and the best opportunity to start new ventures. This is however bound by a time-frame and action that is not immediate will have devastating effects.
We are seriously concerned that if the Government fails to help Maltese companies with funding, many efforts at establishing businesses in Libya will fail. Business in Libya is not the start up of a small enterprise, but the establishment of well planned and well capitalised enterprises will be able to make use of Maltese expertise, knowhow and natural affinity with Libya to form consortia to bid and take on the really lucrative projects. With the meagre "cautious" borrowings in Malta, they can never hope to compete with French and UK companies who have the benefit of venture capital and access to capital markets to help them do business in Libya.
Experience has shown that our Banks are too reluctant on their own to invest their excess liquidity as loans to businesses wishing to trade or do business overseas. But this is a hurdle that we must overcome. Vincent Farrugia concluded by urging Minister Fenech to give the matter his most urgent attention.
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