Maltese efforts to tap into sub-Saharan markets ‘surprisingly successful’

Maltese companies that have decided to exploit sub-Saharan markets following their business problems as a result of the Libyan crisis have been “surprisingly successful”, Malta Enterprise chairman Mario Vella said.

“With the wisdom of hindsight, it is obvious that the situation in Libya wouldn’t improve until it worsened and that diversification was an ideal solution from the start,” Vella said while delivering a presentation to Parliament’s Economic and Financial Affairs Committee on the impact of the Libyan civil war on local business. “Exportation to Africa has improved in recent years. Obviously they need a product and need to be aggressive in their direct sales.”

Vella added that Malta Enterprise is also seeking to tap into Algerian markets, pointing out that they have helped open a Maltese consulate in Algiers, that Air Malta has started flying to Algiers, and that a Maltese business mission to Algiers has been scheduled for later on this year.

However, Vella argued that several Maltese businesses that have suffered as a result of the Libyan crisis would have been impacted regardless of the crisis as they had failed to diversify.

“They acted on a basis that if the going was good, they just went on eating without investing or creating new ideas,” Vella said. “They would obviously have suffered if they didn’t adopt a corporate policy of diversification.”

Vella pointed out that, apart from encouraging companies to branch into African markets, ME had also provided initial relief to companies hit by the Libyan crisis- such as through accelerated payments by the Treasury on government dues to those companies. The VAT department also helped companies that had difficulty in paying VAT because of cash-flow problems.

Vella pointed out that in 2010, the year before the crisis, €85 million worth of Maltese products were exported to Libya. In 2011, as the crisis hit, the figure dropped to €35 million. However, it shot up to €136 million in 2012 and to €138 million in 2013, with Vella arguing that the Maltese suppliers took over the market from other suppliers.

He warned that the figure dropped to €123 million in 2014, when “the situation began getting dire”, and that €23 million was earned through exports in the first quarter of 2015.

He added that around 2,400 people are employed within companies that are registered in Malta, with at least 50% exposure to Libya. The figure, he said, has been consistently on the rise until summer 2014 when the Libyan crisis escalated. calls