209. Memorandum From Robert T. Hormats of the National Security Council Staff to the President’s Assistant for National Security Affairs (Scowcroft)1 2
- Nigeria: Treasury Intends to Oppose IBRD Lending
The Treasury Department has made it known that it will attempt to end IBRD lending to Nigeria because of its strong economic situation and prospects. Income from oil exports have increased foreign exchange reserves to about $5.7 billion (two years worth of imports).
The World Bank has been lending Nigeria $175–200 million annually, but is scaling down its activities to $100 million per year and restricting projects to the agriculture sector. The Bank will no longer lend for education, power, ports, and highways, as in the past.
Treasury has been moving toward a tougher line for the past several months. As early as last June, the US Treasury representative noted during the Bank’s consideration of a loan to Nigeria that that country’s economic position did not justify continued resource transfers.
Nigeria has “cooperated” with the Bank by purchasing $50 million of its issues, but has rejected the idea of “buying back” loans in order to obtain the technical assistance but forego the capital assistance.
Treasury will argue that the US should oppose the new loans which are to be discussed in the Bank in March. They realize they will have an uphill fight, but have assured us they will play clean and realize that a complete interagency airing will be necessary before any position is taken.
Despite Nigeria’s hostile position on Angola, the country remains very important both to our overall policy in Africa and to our relationship with the developing world; we must not go out of our way to cause additional problems. We should oppose Treasury’s attempt to “cut off” Nigeria from the World Bank, but at the same time encourage [Page 2] the country to assume an international financial position more appropriate to its increased wealth.
I hope we will be able to handle this at the staff level, and have written a note (Tab A) to Gerry Parsky suggesting a discussion of the matter before any decision is taken. I will keep you informed as the issue develops.
Hal Horan concurs.
- Source: Ford Library, National Security Adviser, Presidential Country Files for Africa, Box 5, Nigeria. Confidential. Sent for information. Scowcroft initialed the memorandum. Attachment Tab A is attached but not published↩
- Hormats warned that the Treasury Department would attempt to end all IBRD loans to Nigeria because of its oil wealth. He favored such loans because of Nigeria’s importance to U.S. policy in Africa and relations with the developing world in general.↩