LIKELY CONSEQUENCES OF VARIOUS US COURSES OF ACTION ON THE VOLTA DAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A000800010011-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 20, 2016
• Document Release Date: October 13, 2006
• Sequence Number: 11
• Publication Date: November 16, 1961
• Content Type: MF

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16 November 1961
MEMORANDUM FOR THE DIRECTOR
SUBJECT: Likely Consequences of Various US Courses
of Action on the Volta Dam
1. Most African and. Asian leaders believe that the US,
after more than four years of negotiation and many surveys and
studies, is now morally committed to follow through on the
Volta am and smelter project in Ghana. They regard the final
signature of the agreement as a mere formality. Although interest
in the Volta project is naturally much less acute elsewhere than
it is in Ghana itself, recent indications of US uncertainty
about whether to follow through with the project, coupled with
other Indications of US displeasure with Afro-Asian neutralism,
notably after the Belgrade Conference, have given the project
considerable symbolic significance as a test of US willingness
to provide economic assistance without political strings.
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2. African moderates are disturbed by Nkrumah's flamboyant
behavior and interference in the affairs of other African states
and would not be displeased to see Nkrumah chastized. They would
be fearful, however, that a US decision not to go ahead with the
Volta project might indicate a reluctance to contribute substan-
tially to African development. They would generally prefer to
have the US as an alternative source of assistance rather than
remaining entirely dependent upon the former Metropoles. While
increasingly willing to accept some Bloc assistance, they dislike
Nkrumah's practice of balancing off the East and the West.
3. IV'krumah personally is heavily committed to the Volta
project, and his plans for economic and social development to a
considerable extent depend upon it. Nkrumah's one crop economy
is already in serious difficulties. He is counting on the Volta
project to ameliorate the economic situation by stimulating
industrialization. Furthermore, his emphasis on a balance of
relations between East and West is the key to both his domestic
and foreign policy. Western support for the Volta project is an
important factor in this balance.
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Coast j, ngency o. 1 -US ImL:~ementat3.or,
Lta We believe that within Ghana the immediate consequence
of a US decision to proceed with the Volta project would be to
bolster markedly Nkrumaht s political position and to weaken
that of his opponents, The Ghanaian President would use the
Volta project to reassure moderate elements within the ruling
Convention People's Party that he is able to get aid from the
West and to demonstrate that playing-off East and West can
prove rewardingo Nkrumaht s opponents like former Finance
Minister Gbedemah and Professor K0 A. Busia would be deeply
disappointed by the decision. Even they would have to realize
that US backing of the Volta project would be needed to counter-
balance Ghana's increasingly close relations with the Bloc*
This would probably hearten the moderate elements in the OPP
and the armed services who oppose closer ties with the bloc,
However,, we do not believe that Nk-r=ah would signyficantly
change the present policies of his regime. He would continue
his attempts to reduce the dominating influence which private
Western interests have in marry sectors of the Ghanaian economy.
Moreover,,, he would continue to develop close economic and
political relations with the Bloc,
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5. Africans and Asians generally would interpret a US de-
cision to proceed with the project as an indication of: (a) grow-
ing US tolerance of the neutralist foreign policies of under-
developed nations; and (b) greater US willingness to commit its
wealth and resources to the development of new Africsa nations.
Neutrals, of course, would not cast aside their suspicixis of US
motives in Africa, but they would regard a decision to go ahead
with the Volta project as a good omen. Radical leaders in Africa
and Asia would conclude that extremist policies are no obstacle
to elegibility for US aid. Leaders who have cooperated with the
US would feel indignant that Ghana had been accorded the priority
in assistance which they believe they had earned. Moderate leaders
in other African states would be subjected to pressure from radical
elements in their own countries who would argue that Nkrumah's
policies had been proved more productive than theirs.
Contingency No. 2 - Withdrawal
6. President Nkrumah's reaction would be violent and he
would turn even more to the Bloc. He would denounce the US for
attaching political strings to the Volta project and try to find
new ways to penalize Western interests. In order to maintain the
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pace of development, he would be likely to accept a much larger
degree of dependence upon the Soviet Bloc.
7. Ghanaian domestic politics also would be affected.
Nkrumah generally has sought to maintain a rough balance between
radical and moderate supporters within his own ruling Convention
People's Party. US withdrawal would further strengthen the in-
fluence of the radicals within the party, at the expense of the
Western-oriented elements within the civil service and the security
services.
8. The reactions of African leaders to a formal announce-
ment of US withdrawal from the Volta project would be mixed.
Same, like President Tubman of Liberia, Prime Minister Balewa of
Nigeria, and most of the leaders of French-speaking African nations
who are well disposed to the West probably would sympathize with
US motives. However, they would almost certainly be unwilling
publicly to support our decision. More important, moderate
African figures would be fearful that US withdrawal would result
in Ghana's becoming a center for Soviet influence and activity in
Africa. Other leaders, and the majority of the African public
which is aware of the project, would react in the standard
nationalist fashion and accuse the US of a deliberate attempt to
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punish an African state for not following acceptable policies.
We believe most African and other leaders in underdeveloped areas
would give scant credence to any economic reasons for withdrawal
that US spokesmen might advance. The parallel with the US with-
drawal from the Aswan Dam project would be widely noted and it
would be strongly argued that no underdeveloped country could
afford to take the risk involved in negotiation with the US on a
long-term development project.
9. Since most African countries are more interested in aid
for themselves than for Ghana, the US probably could mitigate
their reaction to its withdrawal from the Volta project by stepping
up aid to them. To be effective,, however, actual delivery of such
aid would have to be prompt.
10. Nkrumah will pursue his Pan-African ambitions regardless
of the American decision on the Volta project. American with-
drawal, however, would stimulate his efforts and give him a useful
issue for appealing to the younger, more radical elements in West
Africa who are critical of, the moderation of their present leader-
ship.
11. The Communist leaders would move quickly to take ad-
vantage of the opportunity provided by the US withdrawal. They
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would encourage and join in the denunciation of the West and
seek to exploit throughout Africa the fears and resentments
caused by the US withdrawal. We do not believe that they would
immediately take over the proposed Western role in the project.
They would be more likely to try to give the impresss.on.9 through
offers of credits,, surveys, etc., that they were willing to give
important development aid to Ghana, while postponing a decision
as to the degree and character of their participation until they
had assessed what action was needed to further their aims not only
in Ghana but all Africa.
Contingency No. 3 - Moratorium
12. On balance, we believe US prospects for convincing
Nkrumah or other Africans that a moratorium wa3 based upon reason-
able economic considerations are no better than in the case of a
withdrawal. The Ghanaian President is likely to regard any pro-
posal for delay as a blatant attempt to blackmail Ghana into
complete surrender to American interests. Nkrumah would be sup-
ported in this view by the Communist Bloc and an overwhelming
majority of African and Asian neutrals, and moderate African
leaders would be hard pressed to find grounds for publicly sup-
porting our decision. Thus, a US decision to defer final action
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might have a worse effect than coaplete withdrawal from the
Volta development project.
13. In summary, whereas there would be little significant
reaction, either favorable or unfavorable to the US, in Africa
and Asia., to a decision to proceed with the Volta project, there
probably would be a strongly adverse response to a decision to
withdraw. The few Afro-Asian allies of the US who supported the
US decision would be greatly outnumbered by those African leaders
who took the standard nationalist and neutralist line. Of great
significance in the overall response would be the tendency of
African and Asian states to stand together when an issue appears
to have been drawn between one of them and a great power. We be-
lieve that US withdrawal would have the overall effect of weakening
the influence of moderates, not only in Ghana, but in all West
Africa.
FOR THE BOARD OF NATIONAL ESTIMATES
SHERMAN KENT
Chairman
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