Payments problems, chaos and corruption are hampering Libyan importers from making big deals to buy wheat, another setback as the country spins out of control two years after dictator Muammar Gaddafi was toppled by rebels and Nato warplanes.
In the latest disruption, the biggest wheat importer Mahatan Tripoli, which supplies most of the capital’s bread, says it may have to put off its next major wheat purchase unless the state starts paying it nearly $100 million owed for previous imports.
Exporters abroad are worried about being paid on time
For months, rogue militia members have disrupted Libya’s oil exports, the main source of funding for a state that feeds its six million people with subsidised bread handed out for as little as 2 US cents a loaf.
There are no signs of food shortages – quite the opposite: bread is still plentiful and cheap. But global grain traders say big Libyan buyers are now having difficulty arranging import deals. Exporters abroad are worried about being paid on time, and about the additional risks of unloading ships in chaotic ports where armed militia members run rampant.
The chairman of Matahan Tripoli, which buys wheat on international markets and sells flour and other processed foods to the state’s subsidised distribution system, said the government owed it $96.7 million.
“If we don’t get paid within two weeks then we don’t have the funds to open new credit letters and make purchases again,” Mustafa Abdel-Majid Idris said.
Without the state funds, the formerly state-owned milling firm would have to delay an order of 50,000 tonnes of wheat, intended to help feed the capital for three months, Idris said.
The Libyan government insists the country will not have trouble financing its imports. Economy Minister Mustafa Abu Fanas said Libya would sort out any tender problems of private importers.
“We monitor and control the private sector if there are any problems to facilitate trade exchange through our economic relations... and fix some problems imports face,” he said.
But in a country where the Prime Minister was abducted last month by gun-toting militia members, the government’s ability to deliver on its promises is always in doubt.
Under a system that has grown far less centralised since the civil war that toppled Gaddafi, Libya’s state no longer imports huge quantities of wheat itself, but instead mostly pays for around 35 private milling firms to do the importing.
The largest is Matahan Tripoli, which was owned by the state under Gaddafi and milled about 40 per cent of Libya’s imported wheat, supplying the capital with pasta, semolina, animal feed and other products as well as flour for subsidised bakeries.
It is now a private firm.