252. Memorandum From the Department of State Executive Secretary (Brubeck) to President Kennedy 0
Last year you asked that, before Kaiser’s first irrevocable commitment of funds for its Valco aluminum project in Ghana we should take one last look at the Volta Dam-Valco project in light of the political situation in Ghana. That time has now come.
Unless we object, Kaiser will in the next few days commit a first $1.4 million on Valco. In addition to US, UK, and IBRD commitments for the Volta Dam (already disbursed), US Government liabilities (none yet disbursed) for the Valco project involve:
- $96 million Eximbank loan to Valco.
- AID investment guarantee of up to $54 million of Kaiser’s liabilities. This first $1.4 million, and indeed any Valco spending, is therefore a US Government liability either as a loan or a guaranty.
There have been no political developments in Ghana in the past year that would warrant seriously reconsidering the Valco project. On the contrary the Ghana situation is probably somewhat improved:
- The Volta Dam is going very well and Nkrumah is very happy about both the Dam and Valco.
- Kaiser’s relations with Nkrumah are excellent and they have a lot of influence on him.
- Ambassador Mahoney has good relations and some influence with Nkrumah—e.g. Nkrumah threw a reception for the Peace Corps at his request.
- Nkrumah has made some friendly gestures—such as expressing admiration for your accomplishments on civil rights.
- Nkrumah is making a major drive, including new favorable legislation, to increase foreign investment.
The adverse factors of course remain—active Communist influence, anti-Western propaganda, and Ghanaian performance on international issues that is usually on the other side from ours (e.g. the Ghanaian attack on the US in the UN this week on South Africa). On balance, however, there has been no serious deterioration, and the Volta-Valco project is serving well its political purpose—to retain a significant Western role and influence in Ghana.
If you agree, I will indicate to Kaiser that we have no objection to their going ahead with their Valco investment schedule.