Kai Ryssdal: The official announcement of Libyan liberation — now that Muammar Gaddafi is dead — will come Saturday, the National Transitional Council said today. And surely not long after it, the question of what comes next.
At some point, talk will turn to rebuilding, and how to pay for it. One likely way to do that is to sell off some of the investments Gaddafi made with his country’s oil revenue. We’re talking tens of billions of dollars spread across much of Africa.
Marketplace’s Scott Tong is just back from a reporting trip to East Africa — Nairobi, Kenya — where he kept bumping into those Libyan investments.
Scott Tong: As soon as I land in Kenya…
Tong: Hey, how are you doing?
Peter: Jambo, my name is Peter. Welcome to Kenya.
…My cabbie Peter notes my hotel, the Laico Grand Regency. The Libyans own it, he says. And now, it’s rundown.
Peter: It was one of the best hotels in those days.
Tong: Not anymore?
Peter: Not anymore.
At first blush, it impresses. It has a glass elevator — or as they say in Kenya, “lift.”
Peter: You can see futuristic views. You can see everything. You can see the bar, you can see the balconies from the rooms. What else do you expect?
Across Africa, Libya’s made investments like this. Analyst Peter Pham at the Atlantic Council estimates $15 billion worth the last decade.
Peter Pham: You have investments in everything from the pipeline between Eldoret, Kenya; and Kampala, Uganda; to telecommunications to luxury resorts in Rwanda; Gahana; agriculture in Liberia; Mali.
Pham says Gaddafi invested in different phases. First, revolutions in the ’60s and ’70s. Then Middle Eastern terrorists. And since the 1980s, he invested in Africa, in part to win friends.
Pham: Most African countries have stood by Gaddafi or at least not embraced the rebel cause. So the investments worked not only economically but politically.
So not all investments were made for pure business reasons, which may explain why the bar at Regency Hotel is empty. Cabbie Peter notes the carpets are worn, the brass rails are scuffed.
Peter: These seats have never been changed for all those years. It shows its age.
Libya bought this hotel in 2008. But even before that, the place was fishy, says Nairobi economic analyst Robert Shaw.
Robert Shaw: It was a product of a very infamous age here called the Goldenberg. There was a series of scams.
Illegally subsidized profits paid for the Regency to be built. At some point, it went bankrupt, and the Libyans scooped it up for cheap. Rumor has it, under an exclusive contract to Gaddafi’s government.
Shaw: Gaddafi and his era, he did have a large following, because he had a lot of money to throw at things. And at people. And he was famous for that.
Peter, the cabbie, takes me to another Libya monument in Nairobi — one of the many Libya Oil gas stations. This is amazing. There’s almost an entire strip mall attached, which means as you buy gas…
Peter: You can have a pizza. Or a chicken leg. There’s a drug store. There are so many things you can do at the same time. You can have a beer.
And then get back behind the wheel.
For Libya, this is a performing asset. But Gaddafi’s now gone, so what now? Analyst Peter Pham expects a Libya asset sell-off. A global estate sale, if you will.
Pham: The new government of Libya is going to need significant amounts of cash, not only to rebuild from the civil war to overthrow the Gaddafi regime, but to make up for literally four decades in which Gaddafi’s adventures abroad have come at the cost of neglect at home.
It’s too soon know what may be sold, and to whom. But the smart money here assumes China. Whoever buys, perhaps the next owner will spruce up the Laico Regency Hotel.
In Nairobi, I’m Scott Tong for Marketplace.
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