Libya conflict: Africa's dilemma over seized assets

Muammar Gaddafi with Jacob Zuma
Image caption Col Gaddafi is reportedly close to South African President Jacob Zuma

African Union leaders are meeting in the Ethiopian capital Addis Ababa, where the subject of Libya seems bound to be discussed.

The meeting is officially scheduled as a fund-raiser for famine victims in east Africa.

But the Union's dilemma over Libya is likely to be a hot topic too. On Wednesday that dilemma was exposed when South Africa stalled Washington's attempts at the United Nations to release seized Libyan government funds to the opposition forces of the National Transition Council (NTC).

The South African ambassador to the UN said his country could not approve releasing all the funds to the opposition because that would imply official recognition of the opposition NTC, which neither his country nor the African Union had given.

British officials said on Thursday that South Africa had agreed to release a $500m tranche of the $1.5bn of seized funds, provided that this proportion of the funds was used for humanitarian purposes.

The British welcomed this move but urged African countries to approve more and recognise the NTC.

The $1.5bn (£910m) is only a tiny proportion of the total of Libyan funds abroad that have been seized by the EU or the US.

African network

The main dilemma for many African Union leaders is that in recent years they have encouraged democratic change.

Although the democratic intentions of the NTC remain unproven, many African leaders are perfectly aware that Libya's fugitive leader Colonel Muammar Gaddafi is not a democrat.

On the other hand, he has historically supported liberation movements including Nelson Mandela's ANC. He has more recently used his big oil revenues to establish a network of political and financial relationships on the continent.

Col Gaddafi was one of the main founders of the African Union and its key financial backer. He wanted it to become the precursor to a "United States Of Africa" and lobbied for its headquarters to be in Tripoli, which would of course have increased his influence further.

As part of his campaign he spent large amounts of money across Africa. The centre of the capital of Chad, Ndjamena, for example, is dominated by a big Libyan-owned hotel.

There are similar hotels in Burkina Faso and other countries on the southern fringes of the Sahara, as well as Libyan agricultural and telecommunications investments across the continent.

Arab rejection

Even in countries where Col Gaddafi backed rebel movements in the 1990s, such as Liberia and Sierra Leone, his state investment companies have assets and influence.

Col Gaddafi accelerated cultivating contacts in Africa in the 1980s as it became clear his brand of Arab Nationalism was being rejected by Arab Gulf States and more conservative north African ones.

Image caption Col Gaddafi, here with ex-Pan-African Parliament president Gertrude Mongella, courted political allies

The colonel's influence in sub-Saharan Africa could evaporate quickly if events in Libya confirm the end of his government.

In the meantime, some of the smaller African countries may be wary of taking a firm stand either way until it is clear which way the chips will fall.

South Africa's position is different. As a relatively large economy it does not rely on Libyan investments. But South African President Jacob Zuma is reported to have a close personal and political relationship with Muammar Gaddafi.

President Zuma led African Union efforts to find a negotiated solution to the Libyan crisis earlier this year, travelling to Tripoli to meet the colonel. Those efforts failed, mainly because the NTC insisted on regime change as its main aim.

Mr Zuma subsequently criticised the west, and NATO in particular, for "abusing" the UN-approved no-fly zone by openly backing the NTC.