"He entertains such grandiose airs because the fact is that, in the main, he has been very generous," Motlanthe told the National Assembly as he faced questions about the state of the African Union.
"That’s why, when poorer nations run out of funds, he can simply close the tap if they do not vote for him."
He added that such politicking was a problem within the 53-nation African Union which elected Gadhafi as chairman earlier this year.
Gadhafi continues to pursue his drive, through the pan-African body he was instrumental in creating as successor to the Organisation of African Unity, to turn Africa into a single state with a single currency, passport and army.
Gadhafi has ruled Libya with an iron fist for decades and his election as chairman, after years in which the post was held by leaders of African democracies, caused discomfort in some quarters.
Motlanthe added however that South Africa remains committed to many ideals of the AU, including setting up an African Court of Justice and African People’s Court.
He said Pretoria has nominated Gauteng Judge President Bernard Ngoepe to serve in the human rights section of the court.