Those closely following the Libyan crisis may have noticed that governments and regional organizations in sub-Saharan Africa have been somewhat less vocal in their opposition to the Gaddafi regime than, for example, the Arab League. There is certainly room for legitimate differences of opinion in this complex matter, but a cynic – moi? – might also point out that Libya has invested heavily in the region, including in the communications sector.

The Libyan African Investment Portfolio, a sovereign wealth fund, owns 100% of the LAP GREEN Holding Company, which in turn holds controlling interests in

  • Oricel Green (Cote D'ivoire, 75%)
  • Rwandtel Rwanda, 80%)
  • Sonitel (Niger, 51%)
  • UTL (Uganda, 51%)
  • Zamtel (Zambia, 75%)

The potential difficulty is that the Libyan African Investment Portfolio is one of the entities whose assets were ordered frozen by UN Resolution 1973, adopted by the Security Council on 17 March. 

Now, having one’s parent company’s assets frozen would not necessarily be a bad thing for an entity that has no need of external funding – “Sorry, the UN won’t let us pay you dividends, we’ll just hang onto the cash until you get this straightened out.” Alas, most of Libya’s sub-Saharan operators are not in the happy position of having no financing needs.

  • UTL is in a dispute with MTN, the dominant mobile operator in Uganda, over interconnection fees. MTN claims it is owed on the order of US$8.3 million and has threatened not to accept UTL-originated calls; UTL says is it is much less, US$ 1.5 million, but it is also looking at interconnect claims from Warid and Airtel.  
  • Although bravely proclaiming its financial stability, Zamtel, formerly a fixed line operator, is in the middle of an extensive project to build out its fledgling GSM network, with more than a doubling of base station count anticipated.

Outside financing, including vendor financing, is still possible, but without any assurance that Libya’s oil money will continue to flow unimpeded, it is safe to say that borrowing may be more expensive. 

LAP GREEN’s mobile operators have, for the most part, relatively small shares of their markets. Nevertheless, their competitors, which include MTN, Orange, and  Airtel, stand to benefit from any financial difficulties that would impede the Libyan-owned operators as they try to grow share. 

 

Click here for information about SA’s most current forecast of the emerging markets of the Middle East and North Africa and Sub-Saharan Africa.