Nov 24 2010(Reuters) -In 2010 during the reign of Muammar Gaddafi, Libya used its money from oil exports to pour aid and investment into its African neighbours, a policy which diplomats and analysts say gives it increasing political clout on the continent.
The following is a selection of the initiatives Libya has already put in place in Africa, as well as some of the projects it is planning. For the story, click on [ID:nLDE6AH1S8]
Libyan leader Muammar Gaddafi said earlier in 2010 he was offering to invest $97 billion in the continent to free it from Western influence, on condition that African states rid themselves of corruption and nepotism.
That sum was about the amount Libya holds in foreign currency reserves, according to official data. Libyan officials have given no further details about Gaddafi’s offer.
SOVEREIGN WEALTH FUND
Libya put $65 billion into sovereign wealth funds, including one which is specifically designed to make investments in Africa.
The Libya Africa Investment Portfolio (LAP) was launched with $5 billion in capital, but it was not clear how much cash it holds now. LAP this year helped set up a London asset management firm, called FM Capital Partners. The head of the firm said it will invest about 40 percent of the Libyan assets it has under management in African projects. [ID:nLDE67424Y]
Another of the fund’s projects was LAP Green Networks, a mobile phone operator which says it had commercial operations in Niger, Ivory coast, Uganda and Rwanda and was planning to launch operations soon in Chad, Sierra Leone, Togo and southern Sudan.
LAP is also the main shareholder in Afriqiyah Airways. Its name is the Arabic for Africa and it says its mission is to link African states to each other. It operates routes that are poorly served by major airlines. Destinations include Ouagadougou in Burkina Faso, Bangui in Central African Republic and Douala in Cameroon.
Libya was one of the biggest contributors to the budget of the African Union, the 53-country body which is supposed to function along the lines of the European Union. A senior Libyan diplomat told Reuters in 2010 Libya was one of five countries — the others are Algeria, Egypt, Nigeria and South Africa — which cover 75 percent of the union’s budget. “Libya … makes its full required contribution to AU funds. Not all countries do and that buys it influence,” a senior African Union official said.
Libyan Prime Minister Al-Baghdadi Ali al-Mahmoudi visited Niger in August 2010 for talks with his opposite number, Mahamadou Danda. He announced the creation of a $100 million investment fund for Niger as part of a strengthening of bilateral ties. Under earlier agreements, Tripoli is contributing 100 million euros for the construction of a Trans-Sahara highway in the north of Niger, according to sources close to Niger’s foreign ministry. The local subsidiary of Libya Oil, along with Total (TOTF.PA), are the major players in Niger’s fuel retailing business.
Muammar Gaddafi was the first head of state to visit after a 2008 coup which brought President Mohamed Ould Abdel Aziz to power. Aziz, who subsequently won a presidential election, has visited Gaddafi several times since then. Even Mauritanian opposition politicians have gone to Tripoli to pledge allegiance to the Libyan leader. Mauritania has debts to Libya of about $200 million. During discussions on debt relief in May this year, the Libyan central bank announced Libya would provide $50 in grants to build a hospital and a university. The university was to be named after Gaddafi.
The Libyan Arab African Investment Company, a vehicle of Libya’s Africa sovereign wealth fund, owns Le Meridien, one of the country’s biggest hotels. The hotel was undergoing refurbishment paid for by Libyan investment. A feasibility study was underway for Libya to build a highway north of the capital Brazzaville, where a mosque is also planned.
Libyan firms own two hotels and the “Dream Park” entertainment centre in this former British colony in west Africa. Gambian agriculture received support from Libya, including a donation of seven new tractors. Muammar Gaddafi in 2009 gave two camels to Gambian President Yahya Jammeh as a gift.
A Libyan non-governmental organisation called World Islamic Call Society is involved in promoting Islam in Gambia. The Libyan and Gambian presidents have exchanged visits and senior Gambian officials attended ceremonies in September to mark the anniversary of Gaddafi coming to power.
(Reporting by Laurent Prieur in Nouakchott, Christian Tsoumou in Brazzaville, Barry Malone in Addis Ababa, Pap Saine in Banjul, Abdoulaye Massalaatchi in Niamey; Compiled by Christian Lowe; Editing by Samia Nakhoul)