Foreign Relations of the United States, 1977–1980, Volume XVII, Part 2, Sub-Saharan Africa

33. Memorandum of Conversation¹

Lagos, Nigeria, April 2, 1978, 10:40 a.m.

SUBJECT

• Talks Between President Carter and the US Delegation, and Lieutenant General Olusegun Obasanjo and the Nigerian Delegation: Second Session

• PARTICIPANTS FOR THE US

  • The President
  • Dr. Brzezinski
  • The Secretary of State
  • Ambassador Andrew Young
  • Ambassador Donald Easum
  • Ambassador Donald McHenry
  • Assistant Secretary of State for African Affairs, Richard Moose
  • Anthony Lake, Director of Policy Planning, Department of State
  • Henry Richardson, NSC Staff
  • Robert Hormats, State Department
  • Parker Wyman, Embassy Lagos
  • Harry Cahill, Embassy Lagos

• PARTICIPANTS FOR NIGERIA

  • Lt General Olusegun Obasanjo
  • S.M. Yar’Adua
  • Brig J.N. Garba
  • B.O.W. Mafini
  • D.O. Adewaye
  • Mr. A. Alhaji
  • Mr. S.O. Falalu
  • Mr. M. Bello
  • Mr. G.P.O. Chikelu
  • Mr. Y. Abubakar
  • Ambassador O. Jalaoso
  • Ambassador P.A. Afolaki
  • Mr. A.O. Oluwunim

The session opened at 10:40 a.m. with a press opportunity.

THE PRESIDENT: Since our last session,² we have had a meeting with Front Line foreign ministers and Secretary Vance can brief you on this.

VANCE: On Namibia, we agreed to put the Five Power proposals before the Security Council on April 10. The United States is prepared to publicly state to SWAPO that the issue of Walvis Bay can be negotiated subsequent to a settlement, and to further state our view that the results of these negotiations should be that Walvis Bay will wind up as a part of Namibia. The Front Line undertook to get in touch with Sam Nujoma and discuss his concurrence with the proposal.

Relative to Zimbabwe, we agree on a meeting with the Patriotic Front called by the United States and Britain. This would be followed by an all-parties conference. We are working on the final details today. Our preference is for the site of such a conference to be somewhere in Africa. The United States will be in touch with all the parties.

GARBA: We made the point that the circle of contact on Zimbabwe should be widened.

VANCE: We will touch base with Rhodesia and South Africa beforehand on our plans.

THE PRESIDENT: General Obasanjo will find Sam Nujoma.

VANCE: Front Line ministers would be invited to attend both of these meetings.

THE PRESIDENT: Who was at the meetings today?

VANCE: Foreign Minister Mogwe of Botswana, Foreign Minister Mwale of Zambia, and Ambassador Salim of Tanzania.

OBASANJO: Were the British represented?

VANCE: British High Commissioner Sir Sam Falle sat in on those meetings.

VANCE: We asked specifically whether the Patriotic Front had agreed to attend an all-parties meeting. We were assured without doubt that they did agree on this.

GARBA: It is reported that Mugabe is coming in tonight; we can then get the Patriotic Front position from the horse’s mouth.

OBASANJO: I am not sure about the position that we have agreed on Walvis Bay.

VANCE: (Repeated the above position.)

OBASANJO: What will be the South African reaction?

VANCE: I believe that they will understand, but Ambassador McHenry can better speak to that.

MCHENRY: They will probably understand but will not like it. They have agreed that all Walvis Bay questions can be negotiated. The language that we have proposed meets their minimum conditions: it respects their legal position and it calls for negotiations.

THE PRESIDENT: This may result in an agreement by an independent Namibia to let the South Africans use their port facilities. If we raised this question in any other way, we would get bogged down.

OBASANJO: We must move quickly on Zimbabwe and Namibia.

THE PRESIDENT: I agree; this could be a headache for us and we would not want it to drag on.

VANCE: I have informed David Owen in response to a message which he sent last night that I will participate in a meeting with the Patriotic Front, probably in Dar-es-Salaam.

OBASANJO: On South Africa, we would like to know what other “arm twisting measures” the United States will bring to bear towards changing apartheid.

THE PRESIDENT: South Africa desires several things. They desire to be respected and accepted as part of the international community and not to be a pariah. We have joined in the arms embargo against them. Our own business firms have initiated standards for their activities in South Africa related to bettering conditions of their South African employees. The United States has less capital investment in South Africa than other countries like Britain and France who have a large South African trade. Many African nations have massive trade with South Africa, such as Mozambique. Over time, the United Nations will probably act further; we will be acting independently as well.

It is impossible for us to totally sever our relationship with South Africa and withdraw our investment from that country. It would be futile and would violate United States law. I would not mislead you on this. The most effective pressure on South Africa must come by concerted action with other nations.

VANCE: We have been considering other economic actions against South Africa such as cutting off EXIM credits. I talked recently with a member of the South African business community who told me of the serious effects such a step would have. We are also exploring other measures.

ANDY YOUNG: There is much happening on this point apart from any action the United States Government may take. My worry is that South Africa has a self-sufficient economy. Unless sanctions are orchestrated carefully and are in response to a crisis, we risk being overruled by Congress.

THE PRESIDENT: We would also be violating U.S. law.

VANCE: (In response to a question.) EXIM credits to South Africa are declining and consist only of guarantees of financing and insurance.

THE PRESIDENT: We have had bad experience on embargoes in the Middle East. The South African economy may be self-sufficient. Vorster has indicated he wants to see me; I have said that I will when he is ready to settle Namibia and move seriously on Zimbabwe. If we act in concert we will be more effective. South Africa is the key economic nation in southern Africa. As South Africa changes to majority rule, it can continue to be a central economic force in the region.

OBASANJO: We can talk about further measures when the crisis comes.

THE PRESIDENT: If South Africa were not feeling the pressure they would not have been responsive on Namibia. And, though I do not want to give them too much credit, they have been helpful from time to time.

OBASANJO: I believe we have finished Africa.

THE PRESIDENT: I will be glad to brief you on other issues. In the Middle East we are heavily involved, perhaps too much so, transmitting messages between Israel and Egypt and other states. We are committed to support Israel’s right to exist, and we have generally good relations with other nations in the area. Sadat’s visit was a major step towards peace, but the Israeli response was not equal to it. The Israeli’s have taken certain measures, but Begin is stuck on three points and these are an obstacle to peace:

1. He is unwilling to accept that Resolution 242³ applies to the West Bank.

2. He is unwilling to give Palestinian Arabs a voice on their own future—either to affiliate with Jordan or some international affiliation.

3. He has refused to stop creating new settlements or to halt the expansion of old settlements.

I think he is wrong on all three points. We have gone as far as possible by ourselves. Begin is in a strong position in Israel, but there is strong dissension in the Israeli Government. Begin will not change unless his advisors and other government leaders change their minds on these issues. He is a stubborn man.

Sadat can hold out against pressure for a limited time only. We have convinced him to give it a few weeks longer to let world opinion work to put pressure on Israel. We feel it is in Israel’s best interests to have friendly relations with its Arab neighbors. The situation in the Middle East is a dangerous one and could lead to a serious war, and I do not know quite what will happen. With the Soviet Union, we are making good progress on the SALT talks. Notwithstanding news reports, there has been no interruption in these talks. We are also talking with them on holding down weapons sales, peace in the Indian Ocean, and preventing attacks on each other’s satellites.

OBASANJO: Possibly Africa figures in your discussions with the Soviet Union?

THE PRESIDENT: Yes. Their intrusion in Africa is a serious problem. We have encouraged them to reduce their arms supply and not to use the Cubans. The Soviets claim that they are acting to uphold self-determination of African countries, but we understand that the Cubans will soon make a major push in Eritrea. Our belief, and we hope Africa will see this too, is that once the Soviets get into a country they are reluctant to leave, as with both Ethiopia and Angola. They claim they have no influence over Cuba, which is only a peaceful country helping black people in Africa.

OBASANJO: Let me introduce my team. (Introductions.)

OBASANJO: You previously asked me how we operated. We have Ministries headed by Commissioners. The administrative boss in the Ministry is the Permanent Secretary, who is not as permanent as is implied. (Laughter.)

He is a career man and starts from the middle of the ladder and works his way up to the top. If he has been correctly trained in the army he is ready after coming up the ladder to offer good advice to government. We have other committees and so forth, and we have 22 Ministries. (Names the Ministries.)

DR. BRZEZINSKI: What is the Ministry of Establishment?

OBASANJO: It looks after overall government administration and personnel matters. We also have a Public Services Commission.

THE PRESIDENT: Which ministry is building the new capital?

OBASANJO: We have a separate one for that.

There is a cabinet office through which everything comes from the ministries through to the government. There is a body there which coordinates the economic ministries. There is also a Permanent Secretary for Services Affairs, for Political Activities, and for External Affairs. Petroleum used to be a ministry but now it is a corporation in order to more easily operate in the commercial market. We have a Committee for Economic Development responsible for initiating and carrying out our development plans.

I would like to now start on bilateral issues. When I was in Washington, we agreed that we would set up meetings on the official level to discuss outstanding problems in the context of the encouragement of, and the need for, closer cooperation between our two countries.⁴ A meeting was held which decided to set up working groups on agriculture, trade, and education. However, since then there has not been another meeting, and I do not believe we have moved fast enough on these matters.

EASUM: After the meeting between officials of the two governments in the fall,⁵ we have worked to follow up the results of that meeting, and I believe we have made good progress. We are currently well underway in scheduling the working groups to meet with us in the United States in the spring.

THE PRESIDENT: Would there be a subsequent meeting in May?

EASUM: That would perhaps be the case.

THE PRESIDENT: If there is a lack of progress here, I wish that you will communicate with me directly and I will attempt to resolve it. I will do what I can in this respect not only relative to our government but also on approaches to private industry.

Ours is a free enterprise system, and the government has very little to do with where investors choose to invest. Unintentionally, small obstacles may have arisen in your country that are preventing US investors from coming in. I believe it would be possible for Ford Motor Company, makers of blue jeans and other goods to all invest here. We have no quarrel with the laws and rules for investment which you establish. The difficulty which worries investors is the uncertainty and unpredictability of these rules. If investors could count on such rules, for example, with respect to indigenization, not changing over the next five years, their willingness to invest would increase. Your country has been blessed by oil, but that will not last forever and will have to be replaced by manufacturing and development. We are eager to expand our cooperation and trade with you. If difficulties arise in this process please get in touch with me directly and I will see what I can do to resolve them. Since we do have different systems we may not be able to resolve all of them completely, but we will try.

OBASANJO: I will take that. I understood that in Washington D.C. the officials of our two governments were not clear about some of the conditions “on the ground,” (i.e., in Nigeria). On that basis we would perhaps prefer that the next meeting of the working groups would be here.

EASUM: There are both advantages and disadvantages in Lagos and Washington. Perhaps Robert Hormats who chaired our team at the last meeting could comment further.

HORMATS: Our idea in inviting the working groups to Washington was to give them some direct exposure to the U.S. Government agencies relevant to meeting Nigeria’s needs and to the private firms which might be involved. We had hoped that a small group could have come over earlier in the year, but that unfortunately had to be cancelled. Now we hope that they can come at the end of April. Much work has been done to make their visit a success.

THE PRESIDENT: While the working groups are meeting in Washington, could we invite representatives of banks and major corporations to meet with them?

HORMATS: Yes, it could be arranged, or we could set up meetings in New York.

THE PRESIDENT: It would be helpful to identify the kinds of investment that would be useful to Nigeria; for example, (agriculture company) has a useful program of experiments and equipment in agriculture, and perhaps the working group could meet with them or similar firms. We are not trying to make American business richer, but only to facilitate investments which are good for you.

HORMATS: We will attempt to focus talks on the types of technical assistance we could provide in the areas of agriculture and education, and to examine opportunities for investment in areas of particular interest to Nigeria.

EASUM: Your government has indicated the need in conjunction with its development plan for a data base. Exposure to such procedures could be one of the objectives of the working group meeting in Washington.

THE PRESIDENT: When (to Easum) could you give General Obasanjo and me an interim report which would identify problems and the progress being made in this area?

OBASANJO: The team could meet in April or May for their second meeting.⁶

THE PRESIDENT: General Obasanjo and I do not seem to be fully informed about the problems and needs in this area. Could you (to Easum) by the end of May give us both an interim report on the status of these talks and the progress being made?

EASUM: Such a report could be prepared within one week after the next meetings are held, and could be ready by the end of May.

THE PRESIDENT: This report should be something that I can read in one hour, which should be frank and honest in respect to both governments, include criticisms of either government where warranted, and made jointly to General Obasanjo and myself.

OBASANJO: I agree. I understand that the US economic system is in private hands. Your government can encourage it to move but not move it directly.

THE PRESIDENT: The American business community pointed out two or three problems which tend to inhibit investment in your country. One is an uncertainty about the future, especially relative to successive changes in laws such as your indigenization decree.

OBASANJO: I can assure you that I will not change them in the future because I will not be here in the future (laughter).

We have taken all of these measures with a serious sense of responsibility, because we do not choose to isolate ourselves from the world and therefore know that cooperation must continue. We have divided our enterprises into three groups: (1) those where little expertise or capital is required; (2) those where medium expertise and capital is required. (In these Nigerians are required to own 60 percent and foreigners 40 percent); (3) those where very heavy expertise and capital, for instance relative to transfer of technology, are required. For these foreigners may own 60 percent and Nigerians are required to own 40 percent.

In all seriousness we do not intend to change this. On the question of whether a future administration may change these provisions, we believe there is no cause for fear. We have been acting responsibly and we have no intention of expropriating anyone’s business. Even if “radicals” took over the government tomorrow, we are taking measures to prevent expropriations from occurring. If I can illustrate on the level of dividends, we are fighting both externally imposed inflation and internally generated inflation. It is not an easy fight. We have recently allowed a little more for dividends to give us flexibility in fighting inflation. We have also moved large firms into group number three. This goes well with President Carter’s and my joint plans for retirement on the farm (laughter).

THE PRESIDENT: I am going to form a joint venture with him on my farm in Plains, and he and I will have a farm in partnership in Nigeria (laughter).

OBASANJO: When I was in the United States, I talked with Rockefeller (relative to Chase Manhattan’s decision to leave Nigeria), who said that he had not regretted his bank’s stay here. Our policies are deliberate, but they should not hurt investments. On this basis I would ask, can the United States do something to generate or to underpin private sector confidence relative to investment in Nigeria?

THE PRESIDENT: I believe that my visit will help in this respect. When we return, I can report to my Cabinet on your stability and progress as well as the study which we discussed which is now underway. Cy and Bob (Hormats), could you prepare a report on this so that I can explain the importance of the visit of the Nigerian team and our economic relationship?

OPIC is also very important here. I understand that there have been delays on both the business side and in your government in processing the papers for application for such guarantees. Some businessmen who are dynamic are sometimes impulsive; they are often frustrated at the slow process of OPIC applications, etc. All of these measures plus my public statements will help the situation.

VANCE: The EXIM problem is now cleared up, so EXIM financing is now available, and I will make a note of that.

EASUM: We must be clear on the difference between EXIM and OPIC. There has been some difficulty on the acceptance of OPIC proposals submitted to your government three months ago.

THE PRESIDENT: Our businessmen consider OPIC to be an important form of insurance for investors.

OBASANJO: (To Musa) Is there a problem here?

MUSA: These projects under our system must be referred to government relative to enterprise classification, and there have been delays in that process.

HORMATS: In November we made a proposal to you which simplified the present approach by reducing the number of times that we had to go to the Nigerian Government for approval.⁷ Such a proposal would avoid complications. We hope you will reexamine it in this light.

OBASANJO: I believe that we should be able to streamline this system.

THE PRESIDENT: I understand that 31 companies are waiting for approval of their OPIC applications.

EASUM: There are 31 pending applications which have been submitted.

OBASANJO: Don, send these directly to me through External Affairs. Other points or problems can be taken up by the study group.

Let me raise another question. We are being discriminated against as an OPEC country.

THE PRESIDENT: Unfortunately, it is probably not possible to change this situation now. GSP is designed to help poor countries. At the time of the oil embargo, Congress passed a law removing GSP applicability to OPEC countries. Congress will not now reconsider this law. President Perez of Venezuela made it a point to bring the same matter to my attention in Caracas. I wish that the law was not there. However, I believe that the adverse impact on Nigeria is slight.

OBASANJO: That may be the case, but this is a symbolic thing; however, I understand.

Also, we used to have a block grant agreement. Concessional aid for participant training of Nigerians in the US and salary supplementation of US experts in Nigeria. Can this be updated?

EASUM: There is about $1 million left under this agreement which we were planning to use to top up experts’ salaries for work in Nigeria.

OBASANJO: I am aware of the $1 million; I was asking whether additional monies would be possible.

EASUM: My understanding is that there are no specific gross national product criteria under the relevent AID legislation. But we need to know the specifics of how you would propose that concessional aid be used. On that basis we can go to Congress. This matter can be developed further in the working groups.

THE PRESIDENT: Most of these agreements go to low-income countries. In this connection there is another possibility for assistance, but we do not insist on it. Peace Corps is an avenue of aid for high income countries. I know it has a bad history here. Perhaps a few volunteers could be sent on a trial basis, but we are not insisting on this.

OBASANJO: We need older, mature people. They could perhaps be sent over under a technical assistance program but not as Peace Corps, because we still have political problems here. But it could be done as technical assistance, and this may work, especially in agriculture.

THE PRESIDENT: If you could list the specialties which you need that Peace Corps volunteers might be able to fill, we could work on it in the way that you suggest. I have a somewhat different view of Peace Corps than you do; my mother went to India in the Peace Corps when she was 68. I don’t know about problems in the past, but I do know about the future. Sending the Peace Corps here is not an issue for us and I only propose it as another way to help you. If you don’t want it, forget it. Possibly retired people with expertise could be worked into this program.

OBASANJO: We can see about this.

On another question, I do not have absolute confirmation, but relative to the 1,000 students which we sent to the United States in the middle level manpower training program, we may not be getting what we want.⁸ We anticipated that these students would be distributed to and incorporated into the programs of existing institutions. Instead we understand that they may be getting special treatment.

EASUM: Our Economic Counselor can better speak on this as he has been following this problem closely.

CAHILL: Five hundred students were sent in December to 63 institutions that were chosen for their relevance to the students’ needs; as far as I am aware they were fitted into the curriculum in each of these institutions.

JOLAOSO: In certain areas, where there were no courses, special programs have been designed for these students, such as Clark College in Atlanta where students went to be trained in pharmacy; Clark does not normally offer courses in pharmacy and these were laid on especially. This problem just came to my attention before I left the States.

VANCE: These problems can be reported directly to State.

THE PRESIDENT: On even the small problems in this process, please let the Secretary of State know directly.

OBASANJO: Earlier this year, the Nigerian government went to the European money market for a $1 billion loan. We find that we need more to maintain a good position relative to development projects and current expenditures. We would welcome anything that we could get along these lines in either money markets or direct government loans in the United States.⁹

THE PRESIDENT: What are your relations with the International Monetary Fund?

OBASANJO: They are pretty good.

THE PRESIDENT: The United States is preparing to contribute further to the International Monetary Fund. You should know that those officials, members of the business communities and officers of the banks all communicate with each other about these kinds of questions. Your stability and willingness to accommodate to investors will help. With respect to the possibility of direct government loans, I will do all I can to help.

OBASANJO: You and I had spoken briefly before about the problem of liquified natural gas. The Commissioner for Petroleum could expand on this.

COMMISSIONER: Our concern is to find a market for projected supplies of LNG. I understand that a primary question relates to the rules of the U.S. Department of Energy and the energy legislation which has not yet been approved. Our concern to find a market especially becomes acute after 1983, because we estimate thereafter that market will decline by 10 percent each year.

THE PRESIDENT: Have you talked to Secretary Schlesinger at our Department of Energy? You might wish to come over to do so or we might send someone over here to explore these questions. We do have a need in the future for oil and gas. Congressional action on the Energy Bill is imminent. Detailed discussion by you would possibly be useful with Schlesinger and also the oil and gas companies involved.¹⁰

COMMISSIONER: I am familiar with the LNG programs of Algeria, Saudi Arabia and Iran. I think we have some advantage over them relative to the United States market because of our proximity. According to all projections, Nigeria is more a gas country than an oil country.

THE PRESIDENT: The Energy Bill would raise the price of natural gas by increments, but by 1985 the price will be unregulated. This is expected to cost the American consumers a great deal of money.

OBASANJO: May I thank you sincerely for the additional contribution, which you announced in your speech to the African Development Fund.¹¹ It will go a long way to help development in several African countries.

I have read carefully your Venezuelan speech and the economic proposals which you made.¹² I am convinced that the political will to carry out such proposals as the Common Fund and debt, where progress is important to Africa but has been too slow, is all that is needed on both sides, and that we must go forward to establish it. Relative to the U.S. foundation for technology which you announced in that speech, I hope that Nigeria can participate.

THE PRESIDENT: Yes, this should be possible.

I want to raise another point. It has been difficult for industrialized countries to find a suitable forum to discuss international economic questions. The Group of 77 gets together to discuss these issues and their radical members take positions which scare our Congress. We have much to offer through the World Bank, AID programs, the IMF and other institutions, but we cannot negotiate with 95 nations. I believe, however, that we are making progress on this.

OBASANJO: I think that something is in the offing; I recently got a letter from Manley of Jamaica.

THE PRESIDENT: But still, this remains a problem. I want to break away from a situation where when our proposals do not fully meet G–77 demands we are considered an enemy.

OBASANJO: I believe that this is improving.

THE PRESIDENT: I hope that by the time the Economic Summit meets in July in Bonn, there can be a framework under which improvement can be made. Also, all of the NATO leaders will be in Washington in May and we will have informal discussions about this problem.

OBASANJO: Manley suggested a meeting in June, but I believe that I will have problems with this.

THE PRESIDENT: It would be helpful if that meeting could take place before the Economic Summit convenes in July.

END OF SECOND SESSION

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 36, Memcons President 4/78. Secret; Sensitive. The meeting took place at the State House Marina. According to the President’s Daily Diary, the meeting took place in the conference room and ended at 12:20 p.m. (Carter Library, Presidential Materials, President’s Daily Diary) Carter visited Lagos March 31–April 3, the first U.S. President to make a State visit to Sub-Saharan Africa.
2. See Foreign Relations, 1977–1980, vol. XVI, Southern Africa, Document 200.
3. UN Security Council Resolution 242 was adopted on November 22, 1967, in the aftermath of the war between Israel and the surrounding Arab states. The resolution addressed the issues of boundaries and refugees in the region and aimed to end the state of belligerency between Israel on one hand, and Syria, Lebanon, Jordan, and Egypt on the other.
4. In telegram 13085 from Lagos, November 10, 1977, the Embassy reported on the November 7–8 bilateral economic talks between a U.S. economic delegation led by Hormats and Nigerian officials during which they discussed investment climate, OPIC, trade, the South African boycott, petroleum investment, finance, development assistance, aid, and a proposed technical and economic development conference. (National Archives, RG 59, Central Foreign Policy File, D770416–1177)
5. See Documents 30 and 31.
6. The second round of the bilateral economic talks took place in Washington April 24–28. See Document 36 for the joint report.
7. In telegram 12965 from Lagos, November 8, the Embassy reported that, on November 7, an OPIC team presented to the Nigerian Permanent Secretary of the Ministry of Industries proposals for streamlining foreign investment procedures. (National Archives, RG 59, Central Foreign Policy File, D770413–0917)
8. Details of the middle level manpower training program are described in telegram 154136 to Lagos, July 1, 1977. (National Archives, RG 59, Central Foreign Policy File, D770236–0153)
9. In a May 31 memorandum to Brzezinski, Blumenthal provided an analysis of Nigeria’s economic potential and noted his decision that direct government lending to Nigeria was feasible. (Carter Library, National Security Affairs, Staff Material, North/South, Box 113, Nigeria 6/77–12/78)
10. See Documents 39, 45, and 89.
11. In remarks at the National Arts Theatre in Lagos on April 1, Carter announced his intention to recommend a U.S. contribution of $125 million to the second replenishment of the African Development Fund. (Public Papers of the Presidents: Jimmy Carter, 1978, Book I, pp. 645–651)
12. Carter gave a speech before the Venezuelan Congress on March 29, in which he set forth his plans to promote international economic growth. (Public Papers of the Presidents: Jimmy Carter, 1978, Book I, pp. 619–623)