When entering a new market it is fundamental to understand the economic environment that you are embarking into. The economic environment of Libya has changed significantly over the past ten years. Since 1999 the government has applied more liberal policies to a once highly centralized economy. Libya’s economy is rapidly changing. The removal of sanctions in Libya has made the idea of investment in Libya more appealing to players in the international market. The Libyan economy depends primarily upon revenues from the oil sector, which contribute about 95% of export earnings, 25% of GDP, and 60% of public sector wages. (www.IMF.countrydatabase.org)The government aims to consolidate and accelerate the growth and reforms of the past few years by stepping up privatization, diversification and international cooperation. It is seeking foreign involvement across all sectors of the economy, although the reform process may be slow. Recent efforts include regulatory changes, the establishment of the Libyan Stock Market and the development of the new Libyan Economic Development Board (EDB). This is encouraging for our company as government is welcoming foreign businesses and has loosened regulations that governed and minimized foreign investments. Essentially this means that there will be fewer impediments to our entering the market.
The mobile users per 100 people in Libya stands at 73.1 and 71% of the population is covered by mobile cellular network.(www.worldbank.ICT/Libya)This is an important gauge for us as it gives an indication to how many people we can target in our market, as a percentage of the population. Nominal GDP has risen over the past few years, reaching LD89.26bn This followed GDP increases of 12.9%, 6.1%, 9.9% and 5.9% in 2003, 2004, 2005 and 2006, respectively, and represents the steadying growth and rising inflation that have occurred since the repeal of UN and US sanctions in 2003 and 2004 respectively.