Libya: Sovereign wealth to finance infrastructure

Libyan Investment Authority (LIA) funds will be used to finance reconstruction inside the country rather than invested abroad. The sovereign wealth fund's acting chief executive, 46-year-old Rafik Nayed, recently told international wire services that he expected the $65 billion fund to contract in the short term because of this decision.

Since August, Nayed has led a team that is reviewing all LIA investments and has put a moratorium on operations until this is complete. 'We aren't interested in new deals,' he told the Wall Street Journal back in September. 'My mandate … is to untangle the inheritance of the regime and stabilise.'

When it was established, the LIA said that it aimed to be transparent and to follow the best international investment practices. This was partly to allay suspicion about the motives that a powerful Qadhafi-controlled fund might have for acquiring assets in Europe and the United States.

These resolutions were not kept. By 2010, several original members of the board of trustees had resigned. Documents leaked to activist organisation Global Witness in June 2011 showed that many large investments made by the fund had in fact lost money. Nayed has attempted to introduce greater openness, telling Reuters that cash, equities, and fixed income products accounted for about 77 per cent of the total assets under management. He identified potential problems in many of the asset classes, describing the equities holdings as insufficiently diversified and some of the strategic shareholdings, managed partly through the Libyan African Investment Portfolio,as loss making.

He also said that he planned to examine the alternative and hedge fund investments closely, including deals with Goldman Sachs and Société Générale.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2011 Menas Associates

Ghana’s rescue efforts still lagging

President John Atta Mills' government is accelerating its efforts to evacuate Ghanaian nationals from Libya after a very sluggish start at the beginning of the political crisis. However the effort by Ghanaian officials still efforts lag way behind those of countries in the European Union, India and Ghana’ regional neighbour Nigeria which has chartered planes to rescue its nationals.

On the other fronts – such as the condemnation of the Qadhafi regime for its murderous attacks on its own people and the application of financial sanctions against Tripoli – Ghana's diplomacy under the uncertain guidance of Foreign Minister Muhammad Mumuni could be said to be missing in action.

Part of the problem may be Mumuni's incompetence and political vacillation on most issues, another problem be the previously close relations that some senior members of the
ruling National Democratic Congress (NDC) had nurtured with the Qadhafi regime.

Ghana and Kenya have been widely listed as countries where the Qadhafi family and sundry Libyan state investment vehicles such as the Libyan Investment Authority (LIA) and its many subsidiaries have put money in companies and institutions. None of these investments are yet subject to sanctions and therefore, for the Qadhafi regime, its interests in Ghana and other African countries could become increasingly important if the sanctions start to have a debilitating effect on its ability to procure weapons and fuel.

For more news and expert analysis about Ghana, please see Ghana Politics & Security.

© 2011 Menas Associates