The Maltese companies who invested heavily in Libya would have ultimately taken a hit even if the latest political developments did not occur if they failed to diversify, Malta Enterprise executive chairman Mario Vella said this evening.

Mr Vella was delivering a presentation to the Economic and Financial Affairs Committee on the situation in Libya and the effect it has had on Maltese companies with interests there.

He noted that with hindsight, it was obvious that the situation in Libya would get worse before it improved, but in the wake of the 2011 revolution, Maltese exports to Libya actually increased, as the temptation of large profits in the short term proved too strong to overcome.

Mr Vella even argued that if local companies failed to diversify their interests, they would have taken a hit even if there no revolution took place in Libya.

"The temptation was that as long as the going was good, then you just went on feeding," the ME head told the committee.

He said that Malta Enterprise was seeing to facilitate the process of diversification, and said that the rest of Africa provided an interesting opportunity for such companies. He emphasised that he was not solely referring to North Africa, but also to sub-Saharan Africa, where, he said, Maltese companies who truly made an effort were registering phenomenal success.

When it came to North Africa, he said, Malta Enterprise's main focus was Algeria, noting that ME has financed the opening of a consulate which has paved the way for many initiatives, including an Air Malta flight to Algiers. A large business delegation to the country is also being planned this year, and significant interest was being shown by local businesses.

But he reiterated that sub-Saharan Africa presented the most interesting scenario, stating that ME was hoping to establish a presence in the Ethiopian capital of Addis Ababa: the city is the seat of the African Union, and thus hosts representatives of its 54 member states.

Mr Vella noted that at presence, the Maltese authorities lacked experience in the region, but local companies had registered successes, and one could learn from their experiences. He said that if such efforts are found to be cost-beneficial, ME would also consider setting up a presence in other African countries.

The ME head said that he was surprised by export figures, stating that he expected a far more dramatic dip, leading him to conclude that there were Maltese entrepreneurs who were aggressive and ready to take risks.

But he said that this did not mean that they should continue on this path, advising that they should diversify nevertheless.

"It would be mistaken to encourage companies to put all their eggs in one basket," he remarked.

In a reply to queries by PN MP Kristy Debono, Mr Vella said that Algeria presented the most obvious alternative to Libya as a lucrative export market for Maltese companies. But he stressed that Algeria and Libya presented completely different scenario, and also noted that it would be very difficult, if not impossible, for local companies to compete if they did not join forces and form consortia.