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Libya to Supply Zimbabwe With Oil - 2001-09-03

Zimbabwe has signed an agreement for Libya to supply 60,000 tons of oil to the southern African country. There is heavy criticism from opposition Zimbabwe politicians, who accuse President Robert Mugabe of "mortgaging the country's future for short term gain."

The $90 million agreement has been signed by President Mugabe in the Libyan capital, Tripoli. He is visiting for the official launch of the African Union, the successor to the Organization of African Unity.

Payment terms have not been disclosed for the 60,000 tons of oil, enough for three months of use. Zimbabwe state media says Libya wants to set up an oil distribution network within the southern African country.

Executives of international commercial banks in Zimbabwe say there have been discussions about Libya getting a majority stake in Zimbabwe government corporations, such as railways and airlines.

Links between the two countries have been strengthening during the past year, with Libyan president Muammar Gadhafi making a state visit to Zimbabwe in July.

During the visit, Colonel Gadhafi called for the Zimbabwean president to expel the country's 50,000 whites. He praised Mr. Mugabe for his plan to forcibly seize 5,000 white-owned commercial farms.

Zimbabwe's opposition Movement for Democratic Change party is strongly opposed to closer economic and political ties with Libya. Senior party officials accuse the Zimbabwe government of selling national assets as a temporary solution to the country's fuel problems.

Supplies of gasoline and diesel fuel have been critically low in Zimbabwe for two years as a result of a shortage of foreign currency. Economists blame what they say is huge government overspending coupled with involvement in the civil war in the Democratic Republic of Congo for the foreign exchange crisis.