Regional - EastAfrican - Nairobi - Kenya 
Monday, June 7, 2004 

War Debt: Gaddafi Gets Tough With Uganda


BARELY A month after President Yoweri Museveni visited Libya and conferred on President Muammar Gaddafi Kampala’s highest decoration, a delegation from Tripoli is expected to visit Uganda to press for payment of an outstanding debt amounting to over $170 million.

Sources said last week that Libya was unhappy that Ugandan officials are giving the impression that most of the debt was incurred by the late Idi Amin’s regime, (1971-1979), when in fact the larger part of it was given to President Yoweri Museveni's government. 

Documents from the lawyers representing the Libyan government show that the Central Bank of Libya (CBL) gave some $8 million to Uganda during Amin’s regime and a further $70 million just after when Museveni came to power in 1986.

In 2002, the Finance Ministry acknowledged owing the Libyan government $155 million – most of it in accumulated interest.

However, high-level talks between the two governments, also involving the International Monetary Fund (IMF), have so far failed to resolve the issue, which has culminated in the Libyans threatening to take the Uganda government to court. 

Sources privy to the issue told The EastAfrican last Friday that among the Ugandan officials the Libyans wanted to meet when they come to Uganda were President Museveni, Secretary to the Treasury Chris Kassami, and Finance, Planning and Economic Development Minister Gerald Sendawula.

"This is the make-or-break meeting. If the issue is not resolved, the matter will be taken to court," said the source, who did not wish to be named.

However, the Communications Officer in the Ministry of Finance, Ms Robinah Rubimbwa, told The EastAfrican: "I am not aware of a Libyan delegation coming to Uganda, but I do know of the debt." 

She referred The EastAfrican to the Director of Economic Affairs in the Ministry of Finance, Keith Muhakanizi, who could not be reached for comment last Friday.

The Libyan delegation is expected to comprise officials from the Central Bank of Libya, the Secretariat of the General Peoples' Committee for Finance and the Secretariat of the General Peoples' Committee for Planning. 

Prominent Kampala businessman Habib Kagimu, a close friend of President Gaddafi, is the liaison person for the Libyans and is understood to have had a meeting with the Libyan leader recently at which the issue was discussed.

Deo Turyahebwa, a principal policy analyst with the Ministry of Foreign Affairs, told The EastAfrican that some of the debt arose from the 1979 war in which Libya provided material, financial and personnel support to the government of Idi Amin.

"Negotiations are going on but it is not something that can cause bad relations," he said.

He added that the Finance Ministry would be in better position to comment on the matter, though it was normally the Foreign Affairs Ministry that took the lead role in bilateral relations.

A source close to the case said that the Libyan government was earlier this year infuriated by a report in the Ugandan press, that suggested that the Libyan government was trying to defraud Uganda of the money. 

The story, which was passed on to high-ranking Libyan government officials by an associate based in Kampala, reportedly appeared to have been authorised by Ugandan government officials.

President Gaddafi was reportedly unhappy about what the source said were "Ugandan ingrates," leading to a cooling in his relations with Kampala.

His frequent visits to Uganda in 2001 and 2002, and the large delegations of Members of Parliament, footballers, ministers, women leaders, beauty queens and other Ugandans he used to ferry to Tripoli and Benghazi are no more.

And in what appeared a clear sign of his new attitude to Kampala, Gaddafi this April failed to come to Kampala to decorate Museveni as a general in spite of spirited attempts by the Foreign Ministry and the Ministry of Defence to have him officiate at the occasion.

Still, on May 18, Museveni travelled to Tripoli and conferred the Katonga Medal on Gaddafi, "in honour of his activism for liberty and unity in Africa," and his assistance to Museveni’s guerillas and government. Museveni was hosted to a banquet by Gaddafi, but it is not known whether they discussed the debt issue.

Past Ugandan efforts to have the debt cancelled have included a visit by Kassami to Tripoli in 2002, during which he failed to meet Gaddafi. Three Libyan delegations have been to Kampala over the issue in recent times and had at one time suggested that Kampala give Libya assets – specifically the Nile Hotel and International Conference Centre – as compensation.

Uganda has also attempted to have the debt written off under the Highly Indebted Poor Countries (HIPC) initiative, which entitles poor countries to debt relief from bilateral donors.

Although Libya is part of HIPC, it has declined to write off the debt, saying it falls outside the scope of the initiative.

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