Improving SME policy in Libya

 

As economic diversification is key to providing employment and income opportunities for a country highly dependent on hydrocarbon exports, Libya needs to establish an SME development strategy to align, guide and co-ordinate initiatives to promote enterprise creation and development.  

 

Why does Libya need an SME strategy?

Libya faces an uncertain future as oil production falls behind population growth, resulting in increasing poverty and high unemployment (13.5% in 2010 with youth unemployment at 25%‒30%). The economy should move away from its dependence on the oil sector.

Currently, major constraints in the financial sector include: a conflict of interest with the banking sector; huge collateral requirements for start-ups; low-levels of financial intermediation .


How the Libya Project contributes

The SME Development Strategy in Libya seeks to enhance entrepreneurship and SME development by strengthening the overall legal and institutional framework and providing guidance for state-led activities targeting entrepreneurs and investors. 

Resources
Overview presentation
Libya Entreprise
MENA Transition Fund

Meetings
9-11 December, 2013 - Coordination meeting between Libya Enterprise and the OECD - Tunis, Tunisia

8-12 September, 2013 - Initial Project ‌Steering Committee meeting - Tripoli, Libya

The SME Development Strategy in Libya is a three-year project and will provide a clear roadmap with comprehensive measures regrouped under five components:  

 Component 1 is a diagnostic study providing an in-depth look of the SME environment in
Libya;
 Component 2 develops through a participative process the actual SME development strategy;
 Component 3 develops, as part of the implementation of the strategy, the necessary legal framework for enterprise development, proposing amendments and, if appropriate, a separate SME law;
 Component 4 provides a substantial implementation assistance, covering both general institutional capacities and the design and implementation of key projects;
 Component 5 proposes a comprehensive programme to improve access to finance for SMEs and start-ups. It will be implemented in close collaboration with the Islamic Development Bank.

First Project Steering Committee Meeting, September 2013 in Tripoli, Libya

Discussions at the December 2013 meeting in Tunis focused on the diagnostic study, as part of the first component of the Project. The SME Policy Index would provide an assessment of the country's entreprise development policies, identifying strong and weak points in policy design and implementation.

Participants looked at preliminary findings for some of the dimensions covered in the Index, namely bankruptcy, public administration streamlining, and adapting public policy tools to SME needs. Preliminary recommendations based on these assessments were also presented.