Once a prosperous country, Libya has been ravaged by civil war. Libya used to produce 1.6 million barrels of oil per day. This money allowed the country to invest in projects and improve infrastructure like never before in its history. This was before the Arab spring and the Libyan revolution. Since that time the country has been divided into different areas, controlled by opposing militias, different governments and parliaments all with their own agendas for Libya.
Libya is heavily reliant on the public sector. Out of a population of over 6 million people, there are approximately 1.4 million people on the government payroll. This is a staggering 84% of total employment.
The public sector is grossly over-employed and highly inefficient. In 2015, The World Bank reported that approximately 60% of Libyan GDP is spent on salaries. Furthermore Libya’s economy relies heavily on the export of oil, as it represents a further mind-boggling 95% of all earnings.
For Libya to thrive as a nation, it cannot rely on oil revenue as it did before.
In order to support diversification of the Libyan economy, I am working on a program to support entrepreneurs called the Tatweer Entrepreneurship Campus (TEC). The mission of this program is to help build the foundations of an entrepreneurial ecosystem in Libya. Isenberg identifies that there are 6 domains to an entrepreneurial ecosystem: Market, human capital, policy, culture, finance and support.
For entrepreneurship in Libya to succeed, it is not enough to just create awareness programs or business incubators. For it to succeed it is important that the whole ecosystem develops. While no one body can ever control the whole ecosystem, governments and organisations can help to understand each component and help improve them.
Read this: How to start an entrepreneurial revolution
At TEC, over the next three years we will work on the 6 domains as highlighted by Isenberg and others: changing the culture by promoting entrepreneurship through community programs. The community programs also support TEC’s outreach and creating a community of potential entrepreneurs on its doorstep. These entrepreneurs would be the users of the TEC co-working space. The TEC co-working space becomes a hub of innovation and development, alongside the continued community programs. Through a competition, and by getting to know the entrepreneurs at the co-working space first-hand we can start to help support promising start-ups through our business incubator. These programs help to identify and support individual entrepreneurs directly.
In the background we wish to work on three further important parts of the ecosystem: finance, human resources and policy/legal. Entrepreneurs need finance. Currently the Libyan government and the mostly publicly owned banks do not offer loans to businesses (or extremely limited) not the least start-ups. For entrepreneurship to succeed there must be private companies and individuals willing to invest. The Angel/venture capital investment culture in Libya is not present as most Libyan businesses and SMEs rely on traditional business models with traditional cash flow forecasts. The finance for most ventures comes through personal savings and borrowing from family/close relationships. As we create the co-working space, the incubator, create a buzz for entrepreneurs to showcase their ideas and inspire them to start new projects, we wish to bring potential private investors into contact with the potential entrepreneurs. This will help them to understand the potential financial benefits of investing in high risk but potentially high reward ventures.
In Libya we do not have a background of venture capitalists or angel investors. TEC will help to kick-start such sectors.
Furthermore, with the entrepreneur having thought of ideas, finance and resources to help them start; we will work with government ministries to help develop the legal framework and reduce government bureaucracy that hampers the Libyan private sector. This will be through training programs, workshops and awareness campaigns directed at Libyan government decision makers.
Lastly in regards to the human capital. As entrepreneurs create new innovative businesses and grow, they will need specialised staff to cater for their growth needs. We will help support this by going into Libyan universities and helping them build to develop their curriculum so that their graduates are first of all aware of the potential of themselves becoming entrepreneurs (culture) and that they graduate with the skills that are useful for growing startups in the country.
It is a long road, but we have to start somewhere.
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