Turkish companies are in pole position to capitalise on the economic growth in Libya.

Philip Patterson, senior research analyst at the Arab Banking Corporation (ABC), told Exporta’s Turkey trade and export finance conference and GTR that construction firms in particular are well-placed to profit from the expected boom.

According to IMF figures, Libya grew at just over 100% last year, albeit from a very low base. Oil production has returned to pre-revolutionary levels and the economy is predicted to expand by between 12 and 15% per year for the next five years.

Turkey has a track record of working in Libya and Patterson said he was impressed by the government’s proactive approach to Libya. It has established diplomatic missions in Tripoli, Benghazi and Misrata and has been educating construction firms on the opportunities and threats of working in the country.

Many Turkish companies were involved in infrastructure projects before the revolution two years ago. Most of the projects have ground to a halt, but the Turkish government has been able to guarantee the companies involved payments of 50% of contract values, providing construction resumes.

The experience of Turkish firms in Libya will be key in bidding for projects as Libya tries to rebuild its devastated infrastructure. But Patterson says they will be able to compete on price and quality too. However, he warned that while the country remains in such a transitory position, new projects are unlikely to be announced.

An interim government is currently in place and as such, Libya lacks “institutional capacity”. Until a permanent government with a five-year mandate is installed – possibly 12 months down the line – it’s unlikely that large projects will be signed off.

That said, the country has a relatively healthy balance sheet. Of a US$58bn budget in 2012, US$10bn went unspent, mostly in the areas of investment and development. Again, this is due to the lack of administrative structures. Libya has three years’ worth of import cover in foreign reserves and so when the country opens up to project bids, it should have ample capital to finance them.

Turkey exported about US$2bn of products and services to Libya last year, only about 1.5% of its total exports volume. However, with severe shortages in food and non-hydrocarbon commodities, white goods, capital equipment and many other areas, it’s likely that the figure could soar over the next year.

For anybody hoping to do business in Libya, now is the time to get into position, said Patterson. He encouraged potential exporters to visit Tripoli, saying that security in the capital has improved. He suggested that those who offer some sort of training programme or knowledge transfer are more likely to be successful. Unemployment is a huge issue in Libya, particularly among the youth. It was a contributing factor to the revolution and any permanent government is likely to demand that those working in the country must create jobs.