AFRICA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A002700010036-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 15, 2016
• Document Release Date: May 26, 2004
• Sequence Number: 36
• Publication Date: March 30, 1979
• Content Type: REPORT

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National
pp,gyd For Release'2004/07/0
Assessment
Center
Africa Review
Supplement
30 March 1979
Top Secret
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COPY O
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AFRICA REVIEW
SUPPLEMENT
30 March 1979
CONTENTS
Nigeria-USSR: Faltering Economic Relations
Nigerian-Soviet relations, which have
gradually cooled in recent years partly
as a result of Nigerian displeasure
over Soviet aid programs, will prob-
ably be further strained if Lagos goes
through with a threat to turn over con-
struction of the 1.3-million-ton Ajaokuta
iron and steel plant to Western firms.
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Challenge to Soviet Policy in Africa
The Soviet Union's poor economic per-
formance and deficiencies of the So-
viet military assistance program could
diminish Soviet pros ects in several
African countries.
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Nigeria-USSR: Faltering Economic Relations
Nigerian-Soviet relations, which have gradually
cooled in recent years partly as a result of Nigerian
displeasure over Soviet aid programs, will probably be
further strained if Lagos goes through with a threat to
turn over construction of the 1.3-million-ton Ajaokuta
iron and steel plant to Western firms. The plant is a
major element in Nigeria's plans to diversify its economy
before the mid-1980s when its oil output'is expected to
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The Ajaokuta complex is by far the most important
element in Moscow's otherwise modest economic assistance
effort in Nigeria. Lagos has preferred to use its oil
wealth to purchase Western technology and has relegated
the Soviets to a secondary role in Nigeria's industri-
alization program. Aside from the steel plant, the
USSR is involved in laying part of Nigeria's 2,700-
kilometer petroleum pipeline network, staffing the
fledgling Petroleum Institute at Warri that is to train
Nigerians to run the country's vital oil industry, and
providing 70 to 80 doctors and other technicians as
consultants in various government ministries and uni-
versities. Moscow also runs a small military assist-
ance program that has come under increasing scrutiny as
a result of two MIG-21 fighter crashes within the past
year.
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Nigeria
Ajaaknta
Planned Iron
and Steel Plan!
Equatorial
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A Long-Cherished Dream
The establishment of a domestic steel industry has
been a priority item in Nigeria's economic development
program since the early 1960s. Western companies re-
fused to become involved because of a limited market
and high construction costs; Moscow subsequently picked
up the project as part of its support of the federal
government during the 1967-70 Nigerian civil war. Lit-
tle was done outside of preliminary feasibility studies
and geological surveys until the 1973-74 oil boom and
the launching of Nigeria's ambitious $48-billion indus-
trialization drive. 25X1
Nigerian hopes of moving ahead on the Ajaokuta
project quickly bogged down as a result of the over-
throw of General Gowon in July 1975 and the attempted
coup in February 1976. The federal bureaucracy, al-
ready quite inefficient and thin on talent, was para-
lyzed by the new administration's anticorruption drive
that forced out a large number of seasoned civil serv-
ants. Moreover, the Soviets and Nigerians could not
agree on such basic issues as sources of raw materials,
the ultimate size of the facility, and the number of
Lagos became increasingly, irritated over what it
perceived as Soviet foot-dragging, and accused Moscow of
being more interested in selling its own steel products
to Nigeria than in developing a Nigerian steel industry.
Lagos subsequently opted to bring in various western
companies to replace the Soviets as contractors for
housing, roads, and other support facilities, leaving
the Soviets with construction of the steel plant itself
and overall project supervision. In the meantime, the
startup date--originally scheduled for 1980--has been
pushed back to 1984 at the earliest.
As an alternative to the Ajaokuta complex, Lagos
has shifted its interest to a number of smaller direct
reduction steel complexes that would use domestic natu-
ral gas as a fuel source. Contracts have already been
awarded to a West German firm for a 500,000-ton direct
reduction steel plant near Warri in southern Nigeria
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that is to begin operations in 1981-82. A similar-
sized plant is on the boards for the north; West German,
French and Japanese companies are the leading contend-
ers.
Lagos' decision to eliminate the Soviets from the
Ajaokuta project would be a major blow to Moscow's hope
of expanding its involvement in black Africa's largest
and most dynamic economy. The Nigerians may also use
the steel complex as still another illustration of So-
viet inability or unwillingness to provide African coun-
tries with a meaningful economic development program.
Government officials and the Nigerian press have taken
Moscow to task on this point on numerous occasions. The
most recent example is a lengthy-mid-January editorial
in a leading Lagos newspaper that blamed the decline in
Soviet influence in Africa on Moscow's readiness to pro-
vide military aid and reluctance to satisfy African re-
quests for economic and humanitarian assistance.
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Challenge to Soviet Policy in Africa (U)
Developments in Africa over the last few months
could test Soviet policy in a way that Moscow is tradi-
tionally least able to handle. In the past, Moscow has
made gains in Nigeria, Angola, and Ethiopia by respond-
ing to their needs for military assistance and thus keep-
ing in power a regime sympathetic in varying degrees to
the Soviet Union and somewhat responsive to its influence.
Security concerns in several countries where Soviet influ-
ence has increased are becoming less pressing, and some
recipients of Soviet military largess are increasingly
interested in economic development. Poor economic per-
formance by the Soviets will aggravate problems caused
by the deficiencies of the Soviet military assistance
program and will particularly diminish Soviet prospects
in areas where military assistance is accorded a lower
priority.
Nigeria
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Nigeria, which challenged the Soviet Union at an
Organization of African Unity (OAU) conference in Khar-
toum last July because of its military activities in
Africa, has become particularly critical of Soviet eco-
nomic assistance in Africa. The Nigerians believe that
the Soviets concentrate on giving military assistance to
countries whose survival is threatened but do not follow
up with economic development assistance that is needed
over the long haul. Those countries that would prefer
to remain socialist, according to the Nigerians, thus
turn to the West for what Moscow is unwilling to supply,
which often leads to the eventual expulsion of the Soviets.
The Nigerians have cited Guinea, Sudan, Egypt, and Somalia
as examples of this trend and predict it will continue
in Angola and Mozambique and even in Ethiopia and Zimbabwe
when the enthusiasm of "military brotherhood" has waned.
Nigeria itself could soon be added to the list. The
Soviet-Nigerian relationship has deteriorated in part
because of problems in their military assistance rela-
tionship, a phenomenon that accelerated because of So-
viet deficiencies in aiding economic development. The
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Nigerians particularly complain about poor Soviet per-
formance in construction of the A'aokuta steel mill and
an oil pipeline.
Angola 25X1A
Dependent on Soviet assistance to deal with the UNITA
insurgency, Angola has not been publicly critical of
Moscow's military or economic assistance. 25X1
25X1 Angolan dissatisfac-
tion with the Soviets on both counts, and the Neto gov-
ernment is already exploring the possibility of diversi-
fying its sources of economic assistance. Neto has made
overtures to the United States, relations with France
and Portugal have improved, and an association with the
EC under the Lome Convention is being examined. 25X1
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Neto has also tried to come to grips with Angola's
dependency on the Soviet Union by improving ties with
Zaire and China. Angola's relations with Zaire have
improved since the Shaba invasion, and both sides, look-
ing for economic benefits, have agreed to reopen the
Benguela Railroad. Neto clearly hopes that improved
relations with Zairian President Mobutu would lead Kin-
shasa to curtail its assistance to UNITA in return for
Angolan control over the Katangese.
Moscow has apparently not opposed Neto's Western
diplomacy and would welcome termination of Chinese aid
to UNITA. The Soviets would be wary, however, of a Chi-
nese presence in Luanda. The recent trip by Soviet Dep-
uty Foreign Minister Ilichev to Tanzania, Mozambique,
and. Zambia--also visited by Chinese Vice-Premier Li in
January--was probably an attempt to gauge the impact of
the Chinese visit on Soviet interests. From the Soviet
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perspective, closer ties between Angola and China would
probably be an irritant in relations, but if Neto works
out an agreement Moscow will have little choice except
to acquiesce and work to ensure support for its position
among pro-Soviet Angolans.
Ethiopia
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The Soviet-Ethiopian relationship is a marriage of
convenience that has been plagued by mutual suspicions
and differences over policy. During the past year, both
sides have tried to minimize the tension in their rela-
tionship in order to concentrate on military objectives--
expulsion of the Somalis from the Ogaden and suppression
of the Eritrean insurgents. While insurgency remains a
problem in both areas, Ethiopian leader Mengistu has
probably weathered the worst and appears more confident
of his ability to deal with remaining problems. The
shift in emphasis from military affairs to economic de-
velopment in Ethiopia will present new challenges to the
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The size of the economic commitment is un-
certain, but the reports of disagreements
suggest that this will continue to be a source o ric-
tion between the two and may increase as the Ethiopians
place more emphasis on economic development. Barring a
change in Soviet policy or Ethiopian priorities, these
disagreements may ultimately jeopardize the Soviet posi-
tion in Ethiopia.
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Aside from the agreement with Ethiopia, there have
been no recent changes in Soviet policy suggesting that
Moscow will be more responsive in the short run to the
economic needs of its principal African clients. At
least one Gosplan official told US officials that the
demands for aid from Ethiopia and Angola alone cannot
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Lower Level Soviets Recognize The Problem
One of Moscow's repeated deficiencies in Third World
relationships has been that its aid has traditionally
avoided hard currency expenditures and has emphasized
high-visibility industrial projects in the state sector
of recipient states. Aid has also been channeled pri-
marily to countries undergoing a sociopolitical trans-
formation of an "anti-imperialist" nature; in effect
aid was directed at political, not economic, goals.
This has offered short-term payoffs but fostered long-
term setbacks. 25X1
Some scholars at the USSR's African Institute are
reportedly questioning this approach. They have told
US officials that Soviet aid should give increased at-
tention to agricultural and rural development. They
acknowledge that the USSR is not at its best in these
areas, but argue that aid should be used where it will
do the most economic good. In addition, they want more
attention given to the local traditions of developing
societies rather than insisting that development pattern
itself slavishly after the Soviet model. In agriculture,
for example, they suggest that Soviet-style collectiviza-
tion would serve as a general guideline for what the agri-
cultural sector should be in a developed society, not a
prescription for the precise form that agricultural re-
form should take in developing countries.
In the Soviet system, the views of these young 25X1
scholars may never reach the policymakers and the con-
servative Soviet bureaucracy does not usually promote
independent thinkers who challenge established attitudes
or policies. It is worth noting, however, that the di-
rector of the African Institute is the son of Soviet For-
eign Minister Gromyko and thus has access to the policy-
making level of the Soviet bureaucracy. Additionally,
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the agreement with Ethiopia reportedly includes substan-
tial aid for agricultural development. Significant change
in Soviet aid policy is not likely in the short run, but
the fact that some discussion of the subject is going
on indicates it cannot be ruled out.
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