Libyan entrepreneurs enjoy boom

By Rana Jawad
BBC News, Tripoli

Walking down Tripoli's long, bustling Gergaresh road, it is evident that since Libya began efforts to open up its markets three years ago, this commercial district has more private businesses with a wider selection of goods.

Poorer consumers are not impressed with the rise in food prices

Traders point to the recent reform of custom tariffs as the most encouraging move so far.

"It's a positive factor in the economy," says Husni Beigh.

His family-run trading and distribution company has seen a boost in trade since all import duties were replaced with a 4% customs handling fee three months ago.

"It strengthened the purchasing power of the Libyan consumer and stabilised prices," he says.

The shrinking of the black market and transparency are other positive spin-offs of tariff change.

"There are no more fakes coming in from right and left and... above all, it has created less room for bribery because this unified regime does not allow people to play with their invoices.

"The costs are now calculable and we know how much we owe the government," he says.

Tomato paste anger

But the new customs duty has had both positive and negative effects on consumer goods.

We hope this will give a good encouragement to middle-class people Businessman Salem Al-Gamoudi

Prices of imports like juice, detergent and vehicles have gone down dramatically as tariffs of up to 150% have been slashed to 4%.

However, dairy products, meat and raw materials, which used to be tariff free, are now subject to the handling fee and their prices have gone up.

"Some prices have become less, but I tell you it there is a problem for some things, especially with refrigerators and washing machines, the prices have become a little more," a supermarket shopper says.

There is a feeling that the price cuts are benefiting the more well-off consumers, with lower-income families begrudging paying more for food products - particularly for the hugely popular canned tomato paste.

Trading hub

Scooter seller Salem Al-Gamoudi sees the tariff cuts on luxury goods as a positive move, with his sales up already by more than 45%.

Scooter sales have increased by 45% in one shop

"We hope this will give a good encouragement to middle-class people who need scooters to go out and buy them," he says.

Libyan Prime Minister Shukri Ghanem has said these economic reforms are positive steps towards turning Libya into a regional trading hub like Dubai or Hong Kong.

But businessman Mr Beigh has mixed views on this and says other reforms like liberalising the state-owned banking system is needed first.

"The potential is great but the chances of really becoming a hub are still quite remote... The banks at present are not very helpful to the local businesses."

Businessmen also say state wages need to be increased to reflect the general rise in the cost of living.

If these problems are not tackled in the long-run, it may stall the economic boom Tripoli's business entrepreneurs are enjoying.