36. Memorandum From Secretary of State Vance to President Carter 1

SUBJECT

  • Joint Report of the US/Nigerian Bilateral Economic Talks, April 24–28

During your visit to Lagos you and General Obasanjo agreed that the second round of US/Nigerian bilateral economic talks should be held in Washington.2 You asked that we work with our Nigerian counterparts on a report for you and General Obasanjo to be ready by the end of May. You suggested that these talks should focus on opportunities for further progress in US/Nigeria economic relations and on outstanding differences in the economic area. The meetings took place on April 24–28. I attach the report agreed to by both delegations.3

Nigeria was represented by a high-level delegation consisting of three permanent secretaries and a number of senior officials representing virtually all major ministries in Lagos. The size, level and breadth of agency coverage represented on the delegation evidenced the importance attached by the Nigerian Government to US/Nigerian relations. The US delegation comprised representatives from all agencies with a [Page 113] role in US/Nigerian economic relations. Chaired by Bob Hormats, it included Don Easum and senior officials from AID, Commerce, EXIM, OPIC, Agriculture and ICA.

As you and General Obasanjo said they should, the conferees carefully examined the numerous possibilities for closer US/Nigerian economic ties and frankly assessed current impediments to such ties, e.g. the Nigerian investment climate. In accordance with your wishes, we sought to establish contacts between the Nigerian delegation and the US private sector. Three of the five days were spent by the group visiting other parts of the US in order to meet with various elements of the US private sector, especially potential investors and research institutions with an interest in Nigeria.

SIGNIFICANCE

This second round of US-Nigerian bilateral economic talks was significant for several reasons:

—They continued the discussion of bilateral economic problems, and the possibilities for further cooperation, which had been begun in the first round in Lagos last November.4 There is now an established framework in which we can continue to expand economic contacts as well as raise pressing economic matters affecting our bilateral relationship.

—We succeeded in putting on the record our views of virtually all of the major issues between us.

These issues are chiefly in the trade and investment field. The most important are the percentage of management personnel that may be recruited outside Nigeria (“expatriate quotas”), the percentage of an enterprise that must be Nigerian owned (“indigenization”), and the amount of profit from investment that may be remitted.

The only significant issue that is not covered in the final report is the denial of consular access to American citizens detained by the Nigerian authorities. The Nigerian delegation contended that this is not purely an economic issue and that we had not given them prior notice of our intention to raise it in this context. They pointed out, correctly, that no American businessman in the course of extensive discussions with the private sector had raised the point. However, they agreed to inform General Obasanjo of our views and I understand this has been done.

—The possibilities for further cooperation to develop the Nigerian economy have been greatly enhanced. Two results are particularly significant.

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First, we agreed to fund several missions to examine key aspects of the Nigerian economy in the clear expectation that these missions will result in substantial reimbursable development programs. These programs are facilitated by Section 607 of the Foreign Assistance Act. Under this section, the Nigerian Government may buy services from or through the US Government, as it is now doing to provide training in the US for roughly a thousand Nigerian technicians.

Second, the Nigerians made clear, for the first time, their desires for “cost sharing” arrangements, i.e. concessional aid in the form of a reduction in the price of the services they might purchase from us.

THE WORKING GROUPS

The four working groups focused on their special areas of interest:

—The Investment and Trade Group met with the Export Import Bank (EXIM) and the Overseas Private Investment Corporation (OPIC) and spent two days in New York with investors, traders, shippers, and financiers, discussing their interests and problems in doing business in Nigeria.

—The Transfer of Technology Group met with a wide range of USG agencies interested in providing services to the Federal Military Government, and traveled to Boston (Harvard, Arthur D. Little) and North Carolina (The Research Triangle).

—The Agriculture and Rural Development Group met with the Departments of Agriculture and Interior and NASA and with private firms interested in joint ventures in Nigeria.

—The Education Group met with HEW, ICA, AID and a wide range of educational associations and institutions.

NEXT STEPS

—We shall continue to work with the Federal Military Government to reduce impediments to US trade and investment, particularly in those specific areas identified by the working group on trade and investment.

OPIC will inform prospective US investors that Nigeria qualifies for investment insurance and will assist the FMG in promoting US investment in Nigeria. A number of proposals suggested to the Nigerian delegation are under consideration.

EXIM is now in a position to consider requests for finance on a case by case basis. As a result of the bilateral economic talks in November, the FMG prepaid in full a particularly troublesome loan that had impeded EXIM’s ability to finance Nigerian projects.

—We will continue to discuss with the FMG means of enhancing communication between the US and Nigerian public and private sectors, including future meetings of the individual working groups and [Page 115] the proposed Nigerian-US Conference on Technology and Economic Development.

AID will fund an agricultural team, coordinated by the Department of Agriculture, to travel to Nigeria in October to identify specific reimbursable projects.

AID will fund survey missions to Nigeria by representatives of several US agencies to identify projects to increase the transfer of US technology to Nigeria.

AID and ICA will work closely with Nigerian educational institutions to develop links between US and Nigerian institutions, continue the technical manpower training program, develop teacher training and vocational/technical institutions, expand health care capabilities, and develop counseling and guidance facilities.

AID will review existing or potential avenues for cost sharing under the Foreign Assistance Act and submit a proposal for Executive Branch consideration prior to consultations with Congress.

  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 57, Nigeria 1–12/78. No classification marking.
  2. See Document 33.
  3. Attachment not found.
  4. See footnote 4, Document 33.