As the winds of change blow across North Africa, it is howling a firestorm in the direction of the conundrum that is Colonel Muammar Gaddafi. The longest serving leader in Africa and the Arab world, Gaddafi has ruled Libya with an iron fist for over four decades.⁽²⁾ As the internal political situation deteriorates and the regime is seemingly on its last legs, the question that is being raised is what future a post-Gaddafi Libya would face. Whilst the concerns have largely been domestic, this paper ventures beyond the borders of Libya by analysing the implications for the continent post-Gaddafi. Following the decision by the United Nations Security Council (UNSC) to freeze all assets belonging “directly or indirectly” to Gaddafi and his family, many Governments worldwide have extended the assets freeze to Libyan Government assets as well.⁽³⁾ While the international community is concerned that Gaddafi could use his country’s investments around the globe to fund his fight back, there is another concern facing countries on the continent, which this paper aims to look at. Having been shunned as an erratic troublemaker by fellow Arab leaders, Gaddafi has courted alliances with African leaders and has used Libya's oil money to buy friends across the continent.⁽⁴⁾

Thus the purpose of this paper is twofold; firstly to investigate the width and depth of Gaddafi’s financial assistance on the continent by taking a closer look at how and where Gaddafi’s funds have been channelled in Africa over the past four decades. Secondly, once Gaddafi’s sphere of influence has been uncovered, this paper will analyse the implications for the continent if the Gaddafi regime was to come to an end.

The beginning of the relationship

In order to contextualise the arguments put forth by this paper, a brief background is pivotal to understand where it all began. Following the lifting of sanctions in 2004, and the ushering in of a new era of prosperity due to the oil exports and the accumulation of enormous financial reserves, this enabled the Gaddafi’s to create their own Sovereign wealth fund in 2006 - The Libyan Investment Authority (LIA).⁽⁵⁾ It is the very structure of this Sovereign Fund that is proving to be a challenge as Gaddafi’s regime slowly crumbles.

According to the business plan of the Fund, under the direct supervision of the LIA is the Libyan Africa investment Portfolio (LAP), which is a capital investment fund.⁽⁶⁾ There are numerous companies falling under LAP including OiLibya, Afriqiyah airways, Sahel-Saharan Investment and Trade Bank (BiISC), Lap Green Network, LAP Suisse ( SA ) and the Libyan Arab Investment Trade Company.⁽⁷⁾ Overall, LAP’s sphere of influence encapsulates financial markets, hotels, tourist villages and resorts, telecommunication services and related industries, industrial factories in different sectors, agricultural holdings, exploration/production of oil, gas and related activities, mining, transport, and finally, imports and exports.⁽⁸⁾

The “courting” stage

From Benin, Burkina Faso, Chad, Ethiopia, Eritrea, Gabon, Guinea-Bissau, Guinea-Conakry, Ivory Coast, Liberia, Mali, Niger, Rwanda, Sudan, Tanzania, Uganda, Togo and South Africa (SA), LAP has a finger in every pie in Africa.⁽⁹⁾ Official documents explicitly state that the main objective of LAP is to contribute to the development of the continent.⁽¹⁰⁾ Subsequently, over the years LAP has become involved in the development of multi-million dollar projects on the continent, and particularly in poor populous countries. Thus, the Gaddafi regime has become a source of capital in light of the fact that for many years the continent struggled to attract investment. Consequently, one finds that a number of African countries have adopted Gaddafi’s name for Government agencies, roads, buildings and mosques etc.⁽¹¹⁾

However, to assume that Libya’s investments were solely tied to the development agenda of the continent would be short-sighted. There is no doubt that these investments on the African continent served a dual role. Gaddafi used his wealth to spread his influence in Africa as a means of building support for his image as the King of Kings and Father Of Africa.⁽¹²⁾ Hence, self-interest defined Gaddafi’s motives on the continent. Nowhere is Gaddafi’s influence more prevalent than the continental organisation, The African Union (AU), where he has occupied a high profile role for decades. As a member of the Organisation for African Unity (OAU), its predecessor, Gaddafi played a key role in securing weapons and funding for liberation movements, including those in SA during apartheid.⁽¹³⁾ From Nelson Mandela’s African National Congress (ANC) to Namibia’s freedom fighter and every rebel without a cause, such as Foday Sankoh to Liberia’s Charles Taylor, Uganda’s late Idi Amin, as well as the current leader Museveni, “all have supped at Gaddafi’s revolutionary table or taken his money and weapons”.⁽¹⁴⁾

Since the creation of the AU in 2002, Gaddafi has been one of the key contributors of the AU budget. According to President of the Commission of the African Union (AU), Jean Ping Ping, five African countries supply 75% of the contribution of African countries to the budget of the Pan-African institution.⁽¹⁵⁾ Libya tops the list with 15% of the organisation’s annual operating budget, which helps pay for peace-keeping missions, humanitarian aid, infrastructure projects etc.⁽¹⁶⁾ In addition, Libya pays the dues of many smaller and poorer states who cannot meet their financial obligation towards the organisation.⁽¹⁷⁾ Perhaps this dependency provides a rationale as to why the AU withheld from denouncing Gaddafi’s attacks on his people and condemning his regime. Nevertheless, through direct contributions to the AU and financial investments in individual members’ states, Gaddafi amassed substantial leverage to pursue his political agenda - that of a United States Of Africa.⁽¹⁸⁾ Gaddafi required a forum and the African Union provided it and thus, Gaddafi has tied himself strongly to Africa by championing its unity and bankrolling compliant leaders.⁽¹⁹⁾

Until death do us apart?

The scenario outlined above describes how Gaddafi, due to the ownership of vast quantities of the main propellant of the modern-day economy, has been fighting way above its weight for years, enabling him to influence the geo-politics of the continent to some extent.⁽²⁰⁾ By providing capital injections throughout the continent, Gaddafi was a lifeline to many African countries desperately in need of financial assistance. Inevitably, petro-dollars have built and sealed a relationship of dependency between African countries. This dependency is now proving to be lethal as many countries on the continent who were recipients of the Colonel’s capital injections face dire losses. It must however be acknowledged and recognised that it remains unclear on whether LAP is a Government investment vehicle “belonging to the people” or whether it has been fused with Gaddafi family holdings.⁽²¹⁾

Acknowledging the implication of this uncertainty is fundamental, as the nature of the investment will ultimately determine the extent of the loss facing African countries if Gaddafi was to fall. To simplify, the closer the ties between LAP and the Gaddafi family holdings, the greater the loss for the African benefactors. Either way, Africa is sure to reap the consequences if Gaddafi falls. The rationale behind this argument is based on the notion that Libya’s capital injections throughout the continent were determined and defined not by national interest, but the personal interest of its leader and his grand plan to become the King of Kings of a united Africa one day. Thus, as the investments are associated largely with a personality and not the national interest of the country, the fate of the personality would naturally determine the fate of the investments.

Not only will Gaddafi’s absence affect individual African states, but the impact will also be felt by the AU. An argument can be made in this regard as Gaddafi and Libya's money were the major backers that transformed the OAU into the AU in 2002.⁽²²⁾ Over the years, Gaddafi has donated a substantial amount to the AU's annual budget for its operations.⁽²³⁾ The fall of the Gaddafi regime will certainly update the financial difficulties of the institution. This in turn would directly affect its operations such as the peace-keeping missions on the continent and would further completely alter the dynamics of the Institution.

Beyond the economic losses there is an ideological loss that is often overlooked - that of the idea of African unity. In this regard, Gaddafi was the last major global leader promoting the idea of a united Africa. While he had his own reasons in doing so and while there was little practical support for his Pan-African ideas, he tirelessly marketed the idea of a United States of Africa.⁽²⁴⁾ In doing so, he kept the idea of African unity alive. As the most prominent voice driving the movement, one can be certain that without Gaddafi, “the Pan African movement is dead”,⁽²⁵⁾ and it is unlikely that there would be anybody else with the personal conviction and the financial resources to fill the gap.

Life after “death”

However, there are always two sides to a story and a positive spin-off on Africa without Gaddafi must be considered in order to provide an unbiased analysis. The collapse of Gaddafi’s dictatorial regime in Africa is believed to be beneficial for the AU.⁽²⁶⁾ The argument is that the AU’s international standing has repeatedly been undermined by the Libyan leader’s eccentric Pan-Africanism and past embrace of terrorism. “While Gaddafi sometimes helped African leaders from smaller nations to gain a global stage, his approach to Pan-Africanism undermined genuine and worthy efforts to promote an image of Africa”.⁽²⁷⁾ Irrespective of his efforts to elevate the AU, Gaddafi remained the most polarising element undermining African unity.⁽²⁸⁾ In this regard, it is believed that his absence from the AU governing body will make the reformation of the institution an easier task.

The end

To conclude, this paper has revealed that Gaddafi has had a mixed influence in Africa - sometimes disruptive, sometimes decisive and at others benign. Hence, there are positive and negative analyses of Africa without Gaddafi. This paper has painted a largely negative picture of the continent without the colonel due to his position as a financier on the continent, fuelled by his self-interest and personal ambitions. In bankrolling the continent and its institution, one can argue that Gaddafi has created a dependency on the regime that is proving to be lethal as the country faces a civil war. In this context, if Gaddafi falls, so do the investments, which have been defined by personal interests.

Hence, it is the nature of this relationship between Africa and Gaddafi that has fuelled the argument of this paper. A relationship based on dependency, such as the one created by Gaddafi is a recipe for disaster and an economic nightmare, particularly for a continent plagued by instability, poverty and underdevelopment. It is no wonder that many countries have begun looking for options for survival should Gaddafi’s regime collapse. Although Gaddafi’s ouster is not a foregone conclusion and as the revolt continues, the fate of Libyan investments in African nations will no doubt take a beating. Some may find this scenario exaggerated and over the top, but Africa is sure to feel the effects of the “divorce” in one way or another!

NOTES:

(1) Pratiksha Chhiba is an intern for Consultancy Africa Intelligence’s Africa Watch Unit (africa.watch@consultancyafrica.com
(2) “Profile: Muammar Gaddafi”, Aljazeera.Net, 24 February 2011, http://english.aljazeera.net.
(3) Lionel Faull, “No dividends for Libyans”, Mail and Guardian, 12 March 2011, http://mg.co.za.
(4) Alex Perry, “Libyan leader’s delusions of African grandeur”, Time Magazine, 22 February 2011, http://www.time.com.
(5) Tom Bawden & John Hooper, “The Gaddafi’s hidden billions”, The Guardian, 22 February 2011, http://www.guardian.co.uk.
(6) “Libya Africa investment portfolio: Company introduction”, Presentation by Filipe Gago, 21 February 2007, http://www.eu-africa-infrastructure-tf.net.
(7) Ibid.
(8) Ibid.
(9) Sara Bakata, “Africa: Why Africa abandoned ‘Brother’ leader”, Daily Nation, 26 March 2011, http://www.nation.co.ke.
(10) “Libya Africa investment portfolio: Company introduction”, Presentation by Filipe Gago, 21 February 2007, http://www.eu-africa-infrastructure-tf.net.
(11) Bram Posthumus, “Gaddafi the builder; Gaddafi the destroyer”, Radio Netherlands Worldwide, 25 February 2011, http://www.rnw.nl.
(12) “Where is Gaddafi’s wealth saved?” One stop Gatget Blog, 5 March 2011, http://pe2s.com.
(13) “Is Sub-Saharan Africa being used to perpetuate Gaddafi’s stronghold on Libya?”, Semaniseme.com, 27 February 2011, http://www.semaniseme.com.
(14) Ibid.
(15) “The African Union in financial difficulties”, Africa News, 30 March 2011, http://www.africanews.com.
(16) Ibid.
(17) Geoffrey York, ”Gaddafi’s dying dream for African Unity”, The Globe and Mail, 22 February 2011, http://www.theglobeandmail.com.
(18) Humberto Marquez, “Gaddafi’s friends in Africa”, Radio Netherlands Worldwide, 23 February 2011, http://www.rnw.nl.
(19) G. Pascal Zachary, “Qaddafi demise a win for African Union”, 26 February 2011, http://africaworksgpz.com.
(20) Ibid.
(21) Ashby Monk, “The Libyan Investment Authority’s Whereabouts”, The Oxford SWF Project, 1 March 2011, http://oxfordswfproject.com.
(22) “The African Union in financial difficulties”, Africa News, 30 March 2011, http://www.africanews.com.
(23) Ibid.
(24) Geoffrey York, ”Gaddafi’s dying dream for African Unity”, The Globe and Mail, 22 February 2011, http://www.theglobeandmail.com.
(25) Ibid.
(26) G. Pascal Zachary, “Qaddafi demise a win for African Union”, 26 February 2011, http://africaworksgpz.com.
(27) Ibid.
(28) Ibid.

Written by Pratiksha Chhiba ⁽¹⁾