|September 13, 2002
Libya Ups Pressure On Zim in Assets-for-Oil Deal
Despite a renewal of the trade pact between Libya and Zimbabwe, sources say
the famine-stricken country could face fuel shortages again in coming weeks.
As fuel and food queues lengthened on Thursday, September 12, structural
faults in the latest Zimbabwe-Libya $360-million fuel deal were emerging.
Despite being granted a pick of the country's choice assets, the Libyan
government has reportedly stepped up pressure on Zimbabwe to offer more
assets of greater value as guarantee for sustained fuel supplies from the
North African country.
The Zimbabwe Independent has learned that the trade pact signed between the
two countries this week leans in the Libyans' favour following complaints
that they had not secured enough in the way of prime assets in Zimbabwe
since the signing of the oil deal in August last year.
Industry sources now said despite the renewal of the supply deal on Tuesday,
September 10, there were still problems that threatened the supply of fuel.
The sources said although queues might disappear in the next two weeks, they
would soon reappear when the country started defaulting on payments. The
government has blamed current shortages on logistical problems and panic
buying of the commodity.
"What has to be understood clearly is that the deal with the Libyans is not
a grant but a loan that has to be repaid using foreign currency which we do
not have in abundance at the moment," the source said. "Our ability to repay
the loan will determine the volumes we get unless Zimbabwe devises other
modes of payment which do not involve foreign currency."
Foreign currency inflows from the sale of tobacco normally start around
October but Zimbabwe has a food deficit of 1,1-million tonnes and requires
at least $160-million to import maize between now and the next harvest. A
Libyan delegation is currently in the country exploring opportunities in the
petro-chemical industry. The delegation, which includes officials from
Tamoil, which supplies fuel to Zimbabwe, on Wednesday, September 11, visited
Noczim's Mabvuku storage facilities in Harare. On Thursday they were
expected to visit Feruka fuel handling facilities in Mutare. The delegation
is also expected to visit cattle ranches in south-eastern Zimbabwe. In the
Tripoli talks, the Libyans expressed an interest in the mining sector.
Sources said the Libyans also wanted a controlling stake in the Jewel Bank,
where they currently have a 14% shareholding. South Africa's Absa Bank holds
a majority shareholding of 35%.
A source in the fuel industry said the Libyans had strengthened their
resolve to acquire a portion of Noczim, especially the fuel-holding tanks.
"The Libyans have seen the desperate situation we are in and are in a strong
position to cherry-pick what they want," the source said. "They are keen to
acquire the holding tanks, as these are strategic in their regional
expansion drive." The Libyans pump fuel into Noczim tanks and drawdowns of
the commodity depend on what Zimbabwe has paid for. "Tamoil is seeking to
push its product up to Zambia or Malawi if demand is low in Zimbabwe and the
holding tanks will enable them to do that in the shortest possible time,"
the source said.
Other industry sources said the country was slowly reverting to the 1999 and
2000 scenarios, when it was buying expensive fuel because suppliers were
charging a premium in the light of Zimbabwe's poor creditworthiness.
"The Libyan fuel is no longer cheap because we forfeited the initial trust
they had in us by defaulting on payments. They are now putting a premium on
it," one said. Zimbabwe owes the Libyans $60-million for delivered product.
(ZIMBABWE INDEPENDENT / MAIL&GUARDIAN)