MASTER’S THESIS M-1687 |
TREADWELL, Brian William j THE VOLTA RIVER PROJECT: A CASE STUDY j OF U. S. FOREIGN POLICY. 1
The American University, M.A., 1967 Political Science, International law and relations
University Microfilms, Inc., Ann Arbor, Michigan THE VOLTA RIVER PROJECT»
A CASE STUDY QF ÜQÎsîSK
By
Brian William Treadwell
Submitted to the
Faculty of the School of International Service
of The American University
in Partial Fulfillment of
The Requirements for the Degree
of
MASTER OF ARTS
Signatures of Committee:
Chairman:
Date: / j f y ^ Ÿ . é ^
Dean of the School
Date: y AMERICAN UNIVERSITY LIÜUAUY
Wftï » 9 1967
3S1X TABLE OP OONTENTS CHAPTER PAGE
IHTRODHOTIOE
I. THE HISTORY OF THE VOLTA RIVER PROJECT ...... L
The Purpose of the Volta River Project...... 2
The History of the Volta River Project.• 3
Phase I: 1915-1952...... 3 Early origins...... 3
Post-war surveys...... 6
Gold Coast White Paper, 1952...... 8
Establishment of the P^^eparatory Commission. 9
Phase Ils 1953-1956...... 10 Political developments ..... 10
Composition and function of the Preparatory Commission...... 11
Areas surveyed...... 12
Report of the Preparatory Commission...... 15
Reasons for failure to implement Project.... 17
Phase III: 1957-1961...... 19
Political independence for Ghana...... 20
Fraser Leith as a catalyst to U, S. partic
ipation...... 21
Gbedemah meets Eisenhower...... 22
Carl Fbesher's proposal...... 23
Nkrumah's meeting with Kaiser, Calhoun,
Eisenhower ...... 24
Kaiser Reassessment Bpport...... 27 Kaiser's deepening committment to the Pro- ill/ I T CHAPTER PAGE ject...... 30
Kaiser tÉies to form a consortium...... 32
ïlkrumah's Decision to start the Pro
ject...... 35
Distribution of the contracts...... 35
The Impreglio consortium. .... 37
Advantages of an early start .... 38
Negotiations on the cost of power. 38
Ghana seeks public finance...... 40
Ghana-Valoo Agreement, I960...... 40
Nkrumah and Kennedy...... 42
Establishment of the Volta River
Authority...... 43
Functions of the Volta River Authority. 43
Phase IV; 1962-1966...... 45
Key construction dates...... 45
Description of the Akosombo Dam...... 48
The Volta River Project as an example
of peaceful international cooperation. 49
II. U. S. FOREIGN POLICY TOWARDS AFRlUA...... 52 U. S. Foreign Policy Towards Africa Since
1957...... 53
U. S. Goals and Interests under the Eisen hower hower Administration ...... 53 New priorities for the Kennedy Admin
istration...... 57 ▼
CHAPTER p a g e
Statements of foreign policy goals...... 57
Identification of U. S. Policy with
African aspirations ..... 59
U. S. interests in Africa 61
U. S. policy in Africa as a check on
Communist subversion 62
U. S. foreign economic assistance policy... 64
New aid emphasis since 1961...... 64
Goals of the policy ...... 65
Relation of foreign assistance to the
ÏÏ. S. domestic economy...... 66
U. S. policy on trade and private invest
ment • • ...... 67
Benefits of trade and Investment...... 67
U. S. position on private investment 68
Warning against exploitation...... 69 Advantages of investment in Africa...,. 70
Disadvantages of investment in Africa.. 70
U. S. policies and programs...... 71
U. S. policy of encouraging regional co
operation in Africa...... 72
The role of private investment in Africa
as a supplement to public assistance... 73
Statements by public and private
officials ...... 73 vl
OHlA P T E R p a g e
The role of the business diplomat., 74
Oonclusion...... * 76
III. GHANA'S FOREIGN POLIOT...... 77
Factors which inluenced Nkrumah's ideology.... 78
Nkrumah's academic background in the U. S... 78
Nkrumahfs activist days in London...... 79
Nkrumahts return to the Gold Coast...... 80
Agitation for independence...... 80
Formation of the Convention Prople's
Party...... 81
The drive to independence...... 81
Ghana ' s Foreign Policy : 1957-1960 ...... 82 1957-1960...... 82
Events of I960...... 83
Republican Constitution...... 83
Independence of numerous African states..... 84
Ghana's foreign policy as an effort to im- 85
plement Nkrumah's ideology...... 85
The foreign policy goals of Nkrumaism 85
Antipathy to colonialism and African
independence ...... 86
Non-alignment and positive neutrality in world affairs...... A union of African states ..... 93
Ghana ' s Foreign Economic Policy ...... 96 vil CHAPTER PAGE Policy towards foreign aid...... 96
Policy towards foreign trade ..... 97
Policy towards private foreign investment.. 98 African socialism...... 98
The role of the private sector in Ghana's
economy...... 99
The need for a pan-African union in which Africaiican realize its full potential.... 101
IV. U. S,-GHANAIAN RELATIONS: 1957-1967...... 103
1957-1962...... 103
Early U . S . aid committments...... 105
U. S. interest in Volta Project as a result
of Gbedemah' 8 embarrassment .... 106
Nkrumah's 1958 visit to U. S. A...... 107
Bases for Eisenhower's decision 109
Aswan Dam ..... 109
Nkrumah's radical policies worry Ü. S.
leaders......
Eisenhower Administration fails to carry out
Volta Sroject...... I D
Nkrumah's radical policies worry new Kennedy
Administration...... 115
Analysis of Kennedy's decision for U. S.
participation in Project...... 120 Till
CHAPTER p a g e
Barbara Ward and Sir Robert Jaokson 121
Edgar Kaiser and Chad Calhoun...... 122
The legacy of the Aswan Dam...... 124
President Kennedy's own convictions...... 125
The final agreements...... 126
1962-1966...... 130 Deterioration of relations.... 130
Senator Dodd's criticisms...... I32
Overall U. S. assistance to Ghana...... 133
Ghana's evolution towards a socialist
dictatorship...... 137
U. S.-Ghanaian relations continue at a low
ebb...... 140
Nkrumah criticizes U. S. in book on neo
colonialism...... I4l
Nkrumah takes conciliatory attitude towards
TJ. S. at Volta Dam inauguration...... 144
The Military Coup of 1966...... 146
The National Liberation Council's assumption
of power ...... 146
Policies favorable to the West...... 147
Ouster of Communist bloc teachers and
technicians...... 148 Diplomatic recognition of the new regime.. 148
Increase of Western aid...... 150 ix
CHAPTER p a g e
Analysis of the coup...... 1^1
New political and economic policies.#...... 151
Improvement of relations with West. 152 V. THE ECONOMIC ASPECTS OF THE VOLTA RIVER PROJECT.. 155
A Brief Description of Ghana's Economy...... 157
Commodity exports ...... ^59
Three main commodities in the economy...... 1^0
Cocoa...... l8^ Fisheries...... ^^2
Bauxite ...... ^^5
Foreign trade and the balance of payments.... 1^6
Austerity measures to improve the trade
balance...... ^^7
Depletion of foreign exchange reserves on
prestige projects...... ^72
Post-Nkrumah austerity measures...... 17A
Efforts to Restructure the Economy...... ^^8
Development plans ...... Tema Harbour ......
Tema's new industrial park...... 179 Administration of the harbor ...... 180
Industries locating at Tema ...... 182
The Akosombo dam...... 183 Need to expand Ghana's electrical output... 183 X
OHAPXBR p a g e The power grid 183
Oonunercial operations of the dam...... 184
Beneficial economic effeots of the dam...... 185
The Tema smelter...... 191 Construction of the smelter...... 191
Proposed commercial operation of the smelter 192
Explanation of the smelting process...... 193
Relation of the smelter to the Akosoitfco
d a m ...... 194
VI. THE LEGAL ASPECTS OP THE VOLTA RIVER PROJECT...... 197
The Hew Concept of International Economic
Development Law...... 197
Opinion of Wolfgang Friedmann...... 198
Opinion of Karl Lachmann...... 200 The Volta River Project as an Example of Inter
national Economic Development Law in Practice. 201
Priciples of Agreement, 1959...... 201
Ghana Government White Paper, 1961...... 203
Speech by Hkrumah in defense of White Ppper. 203
Parliamentary debate on White Paper.... 206
Resolution of the Assembly on the Master
Agreement...... 208
Master Agreement, 1962...... 208
Financial arrangements of the Volta River
Project...... 208 xl
CHAPTER p a g e Major legal provisions of the Master
Agreement...... 210
Financial arrangements for the Tema smel-
ter 214
Related legal provisions...... 216
Ghana Pioneer Industries and Companies Act. 216
U . S. Investment Guarantee...... 217
TJ. S.-Ghanaian agrrement on taxation...... 218
VII. THE SOCIOLOGICAL ASPECTS OF THE VOLTA RIVER
PROJECT ...... 219
The Effects of the Volta River Project...... 220
Characteristics of the West African City 220
Development of Tema ...... 222 The community development scheme at Tema.... 222
Resettlement of the Indigenous Inhabitants
at Tema ...... 228
Problem of Resettlement of the People's
Affected by the Volta Dam...... 2)4
Problems of implementation...... 236
Housing facilities...... 237
Changes attempted in the Agricultural sector.239
Evaluation of the resettlement scheme. 241
CONCLUSION...... &42 BIBLIOGRAPHY...... Ô51
APPENDIX...... 265 LIST OF TABLES
TABLE PAGE
I. Contracts for the Construction of The
Volta Dam...... 36
II. U. S. Foreign Assistance to Ghana:
Fiscal Years 1961 - 1967...... 134
III. Cumulative U.S. Assistance to Ghana...... I36
IV. Ghana's Visible Balance of Trade...... 169
V. Ghana's Cocoa Exports ...... 170
VI. Ghana's Balance of payments...... 171
VII. The Cost Estimates of Paragraph 17 of the
White Paper, 1961...... 186
VIII. The Estimate of Total Annual Cash Charges
During the Period 1965—1977...... 187
IX. The Supply of Power to Valeo under the
Master Agreement...... 188
X. Jamaican Foreign Trade Statistics:
Exports...... 195
XI. Loans to Ghana for The Volta River Project . . . 209
XII. Cost and Financing of the Tema Smelter...... 216 LIST OF ILLUSTRATIONS
ILLUSTRATION PAGE
I. Volta River Project Financing ••• ...... 215 INTRODUCTION
The following work on Ghana's Volta River Project is a case study in international relations. The emphasis
is on the role of the United States Government and private business interests in that Project. The end result will be an analysis of the policy implications for the United
States in Africa. The framework in which it is set is relatively new. It purports to elevate a new field of study to the realm of international relations: international business.
This conceptual framework has been borrowed from
Professor Richard D. Robinson of Harvard and N.I.T. In the * preface to his recent book International Business Policy,
Proffesor Robinson draws the study of international business into the larger circle of international relations.
Within this circle international business is on an equal plane with the fields of international politics, inter
national economics, and international law together, they
form four interlocking circles, thereby, indicating their
interdependency. This author here has structured his thesis
* Richard D. Robinson, International Business Policy. (New York: Holt, Rinehart and Winston, 1964). XT in the same manner, and hopes to contribute to the liter ature which might employ this framework.
A study of the Volta River Project is important for several reasons. First, Ghana has been one of the most crucial areas of United States concern in Africa.
Ghana was an early leader among the newly emerging
African states and represented one of the greatest areas of economic growth potential in black Africa. Second, the Volta River Project received the greatest single committment of U.S. foreign assistance in Africa. Third, the Project represented o n^f the most important penet rations of U.S. private business into black Africa formerly dominated by European colonial powers. Fourth, the Volta Scheme was a closely integrated economic devel opment project guided by long-range planning and goals, and sound cooperation between foreign governments and private business interests, it is hoped that the Volta
Project will serve as a model for the development of other
areas of Africa and the less developed world where there
is a need for intranational regional develocxnent combining
the benefits of both the public and the private sectors. XTl Finally, the Volta Project represents an example of inter
national cooperation, motivated by peaceful goals and
mutual self-interest.
The first chapter which the reader will encounter is
a general history of the Volta River Project from its early
conception in 1915 to its completion in 1966. The history
is divided up into four phases which will facilitate the
reader's understanding of the Project in its relationship with various stages of Ghana's evolution from a non-self
governing colony, to a self-governing colony, to an indep
endent state. Emphasis is on the stormy negotiations between governments and private industry in order to
transfer the project from the planning dages to imple
mentation.
Chapters Two and Three form a complementary whole.
Both explain the official foreign policies of Ghana and
the United States respectively as stated by the responsi
ble foreign policy makers. Each chapter is a composite of
the stated goals and interests of the respective states.
Emphasis is on the policies of foreign aid, foreign trade,
and private foreign investment abroad. This policy frame
work will provide a background with which to facilitate xvll later analysis and evaluation of the Volta River Project with reference to these goals.
Chapter Four analyzes the actual diplomatic relations between the two countries and private investors during the period 1957-1967 in relation to the conformance with and deviation from the goals set forth in the above two chapters.
The role of fate as well as the role of sound calculation and planning of interests in diplomacy is stressed.
Thus, Chapter One, in the setting of our framework, utilizes the four interacting and interlocking elements of international politics, international economics, inter national law, and international business. The emphasis is clearly on the last element. Chapter Two, Three and
Four clearly represent the case study in relation to international politics.
Chapter Five covers the international economics aspects of the case study. Ghana, though heavily endowed with natural resources, has clearly backed the requisite capital and technology with which to exploit those re sources. Here will be seen the economic rationale for the
Volta Project as well as its structure and proposed oper ation.
Chapter Six sets out to explain the various legal zvlll agreements involved in implementing the Volta Project.
Starting from the framework that the Volta Project Master
Agreements were identified with new concepts of inter national law, the chapter explains the most important pro visions of each agreement between governments, public international aid agencies, public corporations and private foreign enterprises.
The final chapter deals with the various resettle ment schemes connected with the project. For this purpose, the author draws on a possible fifth field for the conceptual framework: international sociology, or at least, comparative social systems.
With the case study completed, the Conclusions give the reader an analysis and an evaluation of the project.
Answers are suggested for the following qeestions: Does the project meet the goals which were stated in Chapters
One and Two? Did the U.S. make the correct choice in helping
Ghana to finance the dam? Can foreign aid act to moderate a radical regime? Would Nkrumah have "gone Communist," if he had not received U.S. foreign assistance? Can the Volta
River project be set up as a model for another economic development projects? Do American business firms have a xlx future in Africa? What is America's future role in Africa?
The significance of this study on the Volta River
Project stems from the fact that there is no one reliable source available to the scholar which covers all aspects of this Project in any great detail. Most primary sources available are biased in their own way since they are either government publications or first-hand accounts of the principal participants. Thus, the lack of objectivity and/or the lack of a thorough account of all aspects of the Project justifies the present study.
Many of the sources which the author investigated contain contradictory information. After must painstaking reaearch, the author believes he has compiled and/or ded uced the most accurate facts and figures. It must be noted that several of the tables presented are the results of such research.
The above research was enhanced by the use of materials from the Ghanaian Embassy and the files maintained by Kaiser Industries in Washington, D. C. In addition, the announcements prepared for State Department Press briefings and the economic research data maintained by the Department of Commerce were of invaluable assistance. XX
The ideal for this thesis was drawn from several sources. First, the author hoped to combine three of his favorite academic areas into one general study. These areas are Africa, international business, and inter national law. The suggestion for the topic came from
Professor Howe Martyn of the American University's School of Business Administration. Other invaluab&e assistance was received from Or. Lorna Hahn, also of American.
The cooperation of the West African Desk, Bureau of
International Commerce, Deparment of Commerce, and the
Embassy of Ghana and the public relations Department of
Kaiser-Industries is gratefully acknowledged. A great deal of gratitute goes to the author's father. Prof essor William F. Treadwell, for his encouragement, the use of his files d>n Ghana, and his valuable business experience in Ghana. Finally, most hearty thanks go to
Miss Martha Jean Connery. CHAPTER I
THE HISTORY OF THE VOLTA RIVER PROJECT
The purpose of this chapter is to give the reader pertinent knowledge of the origin, nature, and implementation of Ghana's Volta River Project. The information is drawn from a wide variety of primary and secondary sources and documents each step in the evolution of the project. The chapter will demonstrate the essence of this development effort; a suc cessful partnership between private business and national governments designed to promote the domestic and foreign policies of all parties concerned. It will be seen how, in the end, increased international cooperation, motivated by peaceful goals and mutual self-interests, can result from such endeavors.
I. THE PURPOSE OF THE VOLTA RIVER PROJECT
The Volta River Project, a multi-purpose scheme designed to transform rapidly Ghana's economy, was conceived as early as 1915, It was the most significant element in
U. S.-Ghanaian relations from 1957 to 1962, and it remains an important consideration at present, it was long a dream of
Ghana's leader, Kwame Nkrumah,and finally became a reality in the second half of t&p twentieth century.
Its economic justification was, briefly, that a power
dam on the Volta River would provide electricity for indus
trialization. However, the demand for electricity was low in
Ghana's basically agricultural economy. A major industry was
thus needed to rationalize the construction of a dam of the magnitude of one million kilowatts. Since Ghana had large
deposits of bauxite, an aluminum processing industry seemed
feasible. Such an industry could consume about half of the
dam's power output and produce finished aluminum for the world market.
The end result, hopefully, would be the transformation
of Ghana's economy from its dependence on cocoa for over 60%
of its exports, to a mixed economy invhich aluminum would be the dominant export. This seemed desirable since the
price of cocoa on the world market had been continually
declining for several years, while aluminum, an industrial
good, remained fairly stable in price. Further analysis
of this problem and related economic factors will be made
in Chapter Five. There it will also be seen how the new
harbor at Tema fits into the plan. II. THE HISTORY OF THE PROJECT
The history of the Volta River Project can be divided into four phases, according to development expert Sir Robert
Jackson. The first phase, from 1915 to 1952, saw many early proposals for a hydroelectric project. The second, from 1953 to 1956, was marked by a detailed investigation into the scheme and its subaequest failure. From 1957 to 1961, the third period, a modified project was scheduled, and the United
States made a commitment towards it. Finally, the period from
1962 until 1966 marked the construction phase.^
III. PHASE I = 1915-1952
Early origins. Interest in the commercial possi bilities of the Volta River started in 1880 when a 20 year survey into the navagability of the Volta commenced. It was not until the First World War, however, that a serious geolo gical study of Ghana was made. Conducted by Mr. A. E.
(later Sir Albert) Kitson, Director of the Gold Coast
Geological Survey, it served as the embryo for today's
^Robert Jackson, "The Volta River Project." progress ; The Unilever Quarterly, No. 282 (4/1964), p. 146. successful results at Akosombo. Kitson had discovered bauxite deposits near Mpraeso in 1914, and on April 24,
1915, he noted the Volta Gorge as a potential dam site :
During a rapid canoe voyage down the river in 1915, I noticed on entering the narrow gorge below Ajena that it was an ideal place for a dam. At the time there was no opportunity to take measurements, but, during a recent geological traverse made along the Volta, this place - Akosombo, 2.5 miles below Ajena - was examined hurriedly, and a measurement made of the river at about half a mile above the gorge.2
Not until 1925, however, did the Gold coast Geological
Survey, in its Bulletin No, 1, publish the outline of a possible scheme for a Volta hydroelectric project allied to
the processing of bauxite into aluminum. In 1929, the United
Africa Company, Ltd., started records of the river flow at
Senchi Perry.
Any possibilities of putting such a scheme into practice were eliminated by the Depression of the 1930's.
In the mid-30's the government's interest revived and the proposed dam site was moved upstream two miles, from
Akosombo to Ajena. in the meantime more bauxite had been
2 Keith Jopp, Volta; The Story of Ghana's Volta River Project. (Accra; Volta Rivêr Authority, 1965), p. 4, 6. discovered at Aya-Yenahin in Ashanti
Then, in 193 9, a fresh survey was started into the
feasibility of an integrated aluminum sbheme by Duncan Rose,
a South African mining engineer and entrepreneur. During
World War II immediate plans were shelved but Rose began
to acquire concessions to potential dam sites and bauxite
areas from ruling native chiefs of the Akwumu Traditional
Council. He planned to obtain private financing for a
complete project; a dam, power station, and an aluminum
smelter. For this purpose, he formed West African Aluminum,
Ltd, (WAFAL).
At that time, Britain, which had to pay out scarce
dollars for bf its aluminum purchases, was seeking new
sources in the sterling area. Most of Britairfs aluminum
was being supplied by Aluminum, Ltd. of canada. Duncan
Rose interested Aluminum, Ltd. in entering into a partner
ship with British Aluminum, Ltd. to construct a sterling area
smelter in the Gold coast. Aluminum, Ltd. went ahead and
3 Jackson, op_. cit., pp. 146-147 purchased bauxite concessions of its own in the Gold coast 4 and then, in 1949, purchased an interest in Rose's WAFAL.
Post-War surveys. In December, 1948, the United
Kingdom and the Gold Coast governments discussed proposals
for an overall development scheme in the Volta Basin which would include aluminum production. Sir William Halcrow and
Partners were then appointed consulting engineers to survey the overall potential of the Basin in August, 1949. At this time engineering surveys were carried out simultan eously by Aluminum, Ltd., British Aluminum, and the government. WAFAL also conducted a survey known as the
"Bird Report", after Mr. C. St. Horn Bird, WAFAL's con sulting engineer. The report was completed in September,
1949.
Halcrow's interim report produced in July, 1950, recommended that a new harbor be built at Tema. Their
final report was completed and published in August, 1951.
Halcrow and Partners noted that a hydroelectric dam could be justified only if a major consumer could be found, preferably the aluminum industry. They recommended that
4 Philip Siekman, "Edgar Kaiser's Gamble in Africa," Fortune. ({November, 1961), p. 130, a dam and power station be built at Ajena, with a capacity of 564,000 kilowatts; and an aluminum smelter be constructed at Kpong, about 10 miles away. Railways should be built to transport bauxite from Aya-Yenahin, and a new port should be developed at Tema. Further investigations by Halcrow in
1952, reconfirmed Ajena as their choice for the dam site.^
Meanwhile, Aluminum, Lfd. and British Aluminum Ltd. had issued a joint report in January, 1951, proposing the
Gold Coast as the most favorable site for an integrated aluminum shceme within the sterling area.
Political events and decisions then took the arena.
While H^s Majesty's Government went into consultations with
Aluminum, Ltd. and British Aluminum, a general election was held in the Gold Coast colony in February* KWame
Nhrumah's convention people's party won a clear majority.
The party had issued a Manifesto promising realization of the Volta River Project,.' Nkrumah was released from the
James Fort prison, formed a government, and became the
Leader off Government Business. After the Halcrow Report in
^Jopp, op. cit., pp. 11-12. 8
August, Nkrumah announced in the Legislative Assembly the 6 decision to biild Tema Harbour.
Gold Coast white paper, 1952. When consultations were concluded, the British Government issued a White Paper in November, 1952, and presented it to the Gold Coast's
Parliament. This body then debated the White paper and on
February 23, 1953, Hkrumah made the following motion:
Mr. Speaker. I beg to move the motion standing on the Order paper, namely: "That this House, in the light of the further stage reached in the negotiations on the Volta River Project as set out in Her Majesty's Government's White paper Command 8702, and having regard to the terms of its resolution on the Development of the Volta River Basin made on the 25th of April, 1952, approves the continuation of the negotiations and the establishment of a Preparatory Commission with a view to arriving at a final agreement which will be in the best interest of the Gold Coast.^
The White paper proposed: (1) a Volta River Scheme; amd (2) the establishment of a Preparatory Commission to complete the investigations. The total cost of the project as estimated a B 114,500,000. Here, about 120,000 tons of
^Ibid., p. 12.
^Mr. Baako in parliament Debates : Official Report, 22 Feb. 1961 (Accra: Gov't. Printing Dept., 1961), p. 171. of metal could be produced annually. His Majesty's Govern
ment was willing to Lend B 50 million for 80 years, in return for 75% of any metal produced for thirty years. No final
decision would be made until the Preparatory Commission had 0 made its report.
Establishment of the preparatory commission. Leader
ship of the Preparatory commission, established in February,
1953, went to Commander (later Sir) Robert G. A. Jackson,
K.C.V.O., C.M.G., O.B.E., R.N., an Australian dedicated to
the movement of the world's resources. Before going to the
Gold Coast, Jackson had advised the governments of India and
Pakistan on various development projects, had headed U.N.R.R.A.'s
operation in Europe, and had worked on the establishment of
an International Refugee Organization and the International
Children's Emergency Fund.
Jabkson, writing later about this era of the Volta
Project, claimed that no immediate action was taken to
implement the above recommendations because of the failure
8 Jabkenn, op. cit., p. 147. 10 of the "Groundnuts Scheme" in Tanganyika,^ At that time development projects were traumatic for commonwealth
Ministers. For jabkson, this point marks the close of the first phase of the project's history, and the start of the second.
IV. PHASE II: 1953-1956
While the Preparatory commission was making its
investigations, aided once again by the engineering firm of
Sir William Halcrow and partners, the Tema Harbour Contract' was awarded by the Gold coast Government to Parkinson Howard
^The Tanganyika Groundnuts Scheme was conceived to; (1) supplement post-war Europe's food supplies with an alternate source of fats and proteins; (2) promote settle ment and development of unoccupied lands as well as to improve occupied lands. It began in 1947, but was taken over the following year by Britain's Overseas Food Corpor ation. The Government Groundnuts Scheme lasted until 1950 when it was abandoned as a dismal failure. During that time, the Scheme suffered from inadapate planning and preparation. The administrators had failed to take into consideration the lack of tractors and other equipment; inadequate railway facilities; untrained Africans; the lack of adequate rainfall; improper soil; and the high cost of seeding, cultivating, and harvesting, according to John c. Enfrick, Jr., The Tanganyika Groundnuts Scheme, Washington: Library of Congress, Legislative Reference Service, Foreign Affairs Division, Sept. 13, 1966. 11
Ltd. in July, 1954. Later, in December, the Adomi Bridge
Contract went to Dorman Long Ltd. The projects were integral 10 parts of the total Volta River Scheme.
Political developments. Political developments were now occuring rapidly in the Gold Coast colony. independence was assured. Elections in 1954 and 1956 had kept the
Convention people's Party in power by an overwhelming majority. On September 18,1956, Mkrumah announced to the
National Assembly that independence was set for March 6,
1957.
Composition and function of the preparatory commission.
The Preparatory Commission studied all technical aspects of the project, the implications of the new railways, communications and logistics, materials and manpower, the planning and design of townships at Ajena and Kpong, living conditions in the new communities, recruitment and employment of labor, and human factors. The Commission employed individual experts, all of international standing; Dr. Arthur E. Morgan, first
10 "Key Dates," Ghanaian Times, January 22, 1966. 12
Chairman of the T.V.A./ Professor Sir Arthur Lewis;
Professor E. B. Worthington; the late Dr. Andrew Topping, and Professor George Macdonald of the London School of
Hygiene and Tropical Medicine ; Dr. Lewis Berners of the
University of Florida, Dr. Otto Koenigsberger; G. A.
Jellicoe, Esq.; Professor J. V. Phillips ; and Major General
G. N. Russell, then Chairman of the Road Haulage Executive 11 of the British Transport Commission.
Areas surveyed. The back-up of the Volta River behind the Ajena dam would create the largest man-made lake in the world, (3,500 square miles). The area which would be in undated would affect about 80,000 inhabitants upstream as well as thousands downstream. The commission undertook to investigate the effects of inundation, as well as the problems of health and sanitation, evaporation, inland water transport and lake ports, and related areas of agriculture, irrigation, fisheries and forests.
Furthermore, the financial and economic implications of the project werè^nalyzed, while the best methods avail able were employed to assess future world markets for
^^Jackson, op. cit., p. 147 f.n. 13 aluminum, and comparable costs for energy generated by 12 nuclear power stations.
In the political sphere, the commission assumed that British Togoland would choose to join Ghana upon her independence, and that agreements could be reached with Upper 13 Volta which contains a large part of the Volta watershed.
Draft legislation was prepared for the creation of a
Volta Rivér Authority, a Master Agreement to bind all parties, and a Power Contrac t that would guarantee the sale and the cost of power.
Pour aspects of the survey were emphasized;
First, more attention was paid to people than to any other problem. Men, not machines, would be the key to success,
All knowledge of Ghana and countries with similar conditions was recorded in an effort to ensure the best working condi tions as well as the highest levels of productivity :
As far as labor-management relations were concerned, experience in mining and other industries demonstrated the essential need to stabilize both overseas and African personnel. For the former, the chief need was to preserve the family unit on the job. This would not
^^Ibid., p. 148. 13 See Appendix A, 14
occur unless the wife (who was the decisive element) was sure that first-class medical services for the children would be available, and that (among several other factors) she herself would have a house where she would be occupied carrying out her normal domestic routine instead of the somevhat artificial "colonial" pattern where servants did most of the work. For the African the answer was simple : the provision of good schools for his children would ensure that the Father would remain on the job. With both sides stabilized, effective training became a reality.
The second area of concentration was on those living in the area which would be destroyed by the advance of Lake
Volta, as well as those downstream. Careful evaluation of their exact living conditions was made.
The third aspect ooncerned problems of health and sanitation. Emphasis was placed on diseases that might result from the new lake, as well as on overall health conditions within the new communities. Diseases investigated were" malaria, hilhaziasis, trypanosomiasis, and onchoceriasis
(commonly known as "river blindness.")
Fourthly, "a new technique was evolved by which a firm of accountants of international standing— Cooper Brothers and Company — was asked to work with the consulting engineers after their financial estimates had been prepared, with a view to con tributing the experience gained by such a firm from analyzing the costs and performance of machines and
14 Jackson, op. cit., p. 148 f.n. 15
men occupied on projects of comparable character." ^ i s method would insure the most realistic esti mates under the Gold Coast's complex conditions.
Report of the preparatory commission. In December,
1955, the Preparatory commission^ Report was coordinated and submitted to the Gold Coast Government. The final result was a 700-page document which estimated the total cost at nearly $900 million. In January, 1956, the Report was published. The Commission was careful to recommend that no agreements be signed until the Gold Coast had achieved independence.^^ The recent nationalization of the
15 Ibid., pp. 148, 150.
16 Jopp, 02. cit., p. 12. 16
17 Anglo-Iranian Oil Company was fresh in the members'minds.
Recognizing the local political implications of such a project, the preparatory commission launched a massive public relations campaign throughout the country. About two
17 Starting in 1949, a re form-minded Shah of Iran sought economic and military aid in vain from the united States. The Truman administration blocked any aid on the basis of reports of instability, corruption, and Soviet meddling, and informed the Shah that he would have to put his house in order if he expected any in the future. All through 1950 the Shah proceeded with reform measures, aided by Iran's Premier Razmara, but still no aid mater ialized. "^he Majlis (Iranian Parliament) then agitated for nationalization of the Anglo-Iranian Oil Company (sole concessionaire for Iranian oil) as an alternate source of development funds. The Majlis carried their threat out in a law passed on March 20, 1951. At that point the Premiership of Mossadegh began and was to last until August, 1953. His policy was to continue national owner ship of the oil properties, and to continue the defiance of Britain. However, Europe found alternate sources of oil in Saudi Arabia andKuwait, and Iran's oil revenues dropped. The Anglo-Iranian Oil Company announced that it would take to court any other purchaser of oil from Iran on the grounds that the property had been stolen from the company. Due to sympathetic shipping fleets, Iran sold little oil and Anglo-Iranian won. Negotiations in the U.N. Security council and the International Court of Justice failed. In the end economic problems caused the overthrow of the Mossadegh regime by the army. The new regime led by the Shah recived U. S. economic aid and negotiated a new oil agreement which enabled the Iranian oil industry to resume output. The unpopular British did not return. Instead, a consortium of five American firms, one French, one Dutch, plus Anglo-Iranian took over the new National Iranian oil Company. Sources Charles L. Robertson. International politics Since World War ii. New York: John Wiley, 1966, pp. 171-172 17 million people (1/3 of the population) visited a mobile exhibition which included models, relief maps, details of the new townships, pamphlets, visual aids, and aewêll- trained staff. The exhibit toured the Gold Coast for many months.
Reasons for failure to implement project. Negot iations between Britain, the Gold coast. Aluminum Ltd and
British Aluminum commenced in March, 1956, in London.
Aluminum Ltd. the key element here since it had a much larger share than British Aluminum and the project could only be justified if Aluminum Ltd. was prepared to aiter into a contract to buy power over a long period of time.
However, negotiations bogged down over power costs estimated by the preparatory commission and they were temporarily suspended in April.
After studying the 1956 Report, the president of
Aluminum Ltd. had said that the Report had "affected the attractiveness of the scheme so that on the 1952 framework the prospective return on capital in the proposed aluminum company is now substantially lower than estimated at that time." He believed the project could still be "developed
18 Jackson, 0 2 . cit., p. 150. 18 satisfactorily," but only if arrangements cauld be made
"for the financing and the division of responsibilities and 19 risks which would be satisfactory under present conditions. "
Thus, after years of planning, the Volta project seemed about to be scrapped.
The Volta River project failed to come into opera tion in 1956 mainly because of the follmfing factors :
(a) a large increase in world aluminum production; (b) the rise in interest rates which made the loan financing of the scheme far less attractive than when the idea was first examined; (c) the unwillingness of the aluminum companies to join in the plan as they had already committed large sums for the expansion of similar projects elsewhere ; (d) the difficulties of finalizing the detailed terms of a concept of a sort of financial partnership, with the underlying postulate of integrated project costing between LG162 million and LG300 million, whereby the power, bauxite and smelter development, the townships of Tema and Kpong, and ancillary roads, railways and other parts of the necessary development were to be undertaken as a single indivisible w h o l e . ^ 0
Thus, a viscious economic circle had taken place.
Before any government would loan the Gold coast money, it
^^George H. T. Kimble, Tropical Africa; Vol. ]^: Land and Livelihood. (Garden City, N.Y. : Doubleday, 1962), p. 138. 20 A. B. Futa, "The Volta Dam Project," The Economic Bulletin (Accra) Vol. 5, No. 1, May 1961, p. 1. 19 wanted tp see Accra conclude a satisfactory agreement with the aluminum companies. The aluminum companies, in turn, wanted to be assured of certain factors in advance, namely, the cost of power. But the cost of power, in turn, depended upon the conditions on which other governments would lend 21 the Gold Coast money.
The work of the preparatory commission had not, however, been in vain. The project had been throoughly
investigated, and the results could be used in the future.
Work had already begun on Tema Harbour, an essential element of the scheme. Also, the very profitable
Ambassador Hotel had been completed in order to acomo- date contractors who would bid on various contracts of 22 the Volta Project.
V. PHASE III: 1957-1961
The failure of all parties to agree on the implementation of the Preparatory commission's
21 Jopp. 02* cit., p. 12.
22 See Chapter 5. 20 recommendations marked by the end of Phase il. phase ill covered the years 1957 to 1961. During this time both the united States Government and additional private businesses took an active interest in the Project. After five years of negotiations between the governments of
Ghana, the United States, and the United Kingdom, the World
Bank, and several of North America'sleading aluminum firms, combined finan cing enables the construction of the Akosombo
Dam and the aluminum smelter at Tema.
Political independence for Ghana. perseverance was the word to describe Kwame Mkrumah's attitude towards the events of 1956. Independence was fast approaching and, after Marcl^, 1957, he would no longer have to depend on
Britain and Commonwealth aluminum firms for the realization of the Project. However, in agreement with the British government, Nkrumah ' s government did retain the Preparatory
Commis sion.
After Ghana's independence the work of the Prep aratory Commission was transferred to a Development
Commission, and Sir Robert Jackson assumed the role of 23 Chairman of this new body until 1961. Kwame Nkrumah
23 Jackson, og^. cit., p. 150. 21 became, of course, the new prime Minister of independent
Ghana, a country which now was comprised of the former
Gold Coast colony as well as the former, adjacent British 24 Trust Territory of Togoland.
Fraser Leith as ^ catalyst to U. S . participation.
Hkrumah now looked to the U. S. for help. An American entrepreneur, Fraser Leith, went to Accra and convinced
Mkrumah that he had access to massive amounts of U. S. capital. The Government of Ghana granted him a ninety day option to create an American consortium to finance the
Volta River project. Leith approached various U. S. alum inum producers and the Department of State seeking financing and support for this venture but to no avail.
At this point Kaiser Industries entered the picture.
Chad F . Calhoun, Kaiser Industries' vice president, and contact man in Washington, was one of the men who had been called in by the Department of State to assess Leith's proposal along with other aluminum executives. Although
Kaiser had no intention of working with Leith,Calhoun foresaw another role for Kaiser. If and vhen the Vo Ha
24 See Appendix A for Author's analysis of the Integration of British Togoland into Ghana. 22
Scheme got off the ground, there would be a job for an engineering and construction firm, that would yield considerable profit. Calhoun pointed out to officials of the International cooperation Administration that Kaiser
Industries had a subsidiary experienced in engineering and the construction of large hydroelectric projects. Also,
Calhoun intimated that iàj^he U. S. got involved, it might be wise to give the construction job to a firm which could 25 later set up an aluminum plant.
Gbedemah meets Eisenhower. In the meantime Mkrumah sent Ghana's Minister of Finance, Komia Gbedemah to London,
New York, and Washington in order to seek financial backing for the Project. While in the u. S., Gbedemah had a chance meeting with President Eisenhower where he received a promise that the Government would consider the possi- 26 bilities of U. S. participation in the project.
2 5 Siekman, op. cit., pp. 130-131. 2 0 Vernon McKay, Africa in World politics (New York; Harper & Row, 1963), p. 405. 23
carl Flesher* s proposal. shortly, thereafter, the
International coopœation Administration gavs~carl Flesher the assignment to investigate the project. Flesher's own theory of economic development was that private enterprise should be used as much as possible in foreign assistance projects. The Volta Project was a chance to put his theory into practice. He reasoned that the U. S. could loan Ghana rabney to build the dam and power station, while private investors with some government help wbuld construct the aluminum smelter. The smelter would then be a guaranteed customer for the power, and would provide Ghana with enough money to repay the loan. Next, Flesher approached several w — 2 7 U. S. aluminum firms with nis proposal.
These companies were uunresponsive for several reasons
First, no one company felt it could tackle the project by itself since its proposed output was too large (they considered 80,000 tons a year as reasonable). Second, there seemed to be too many risks in this one overseas project. Finally, the estimated cost of the project was
27 Siekman, og. cit., pp. 131, 199. 24
too high. The subsequent high cost of power would make 28 the smelter uneconomical.
Despite these unfavorable reactions, Flesher in
the spring of 1998 came under increased pressure from his
superiors to have a proposal ready for Mkrumah's scheduled
state visit to the U. S. A. during the summer of 1958.
Thus, Flesher came to the conclusion that a consortium of
aluminum companies who could share the risks would be
necessary. But before a consortium could be put together,
a review of the project by U. S. engineers who were familiar with American construction techniques would have to be
carried out.
Nkrumah's Meeting with Kaiser, Calhoun, Eisenhower.
In July, five days before Mkrumah's arrival, Flesher asked
Calhoun how much a survey would cost. Without much informa
tion to go on, Calhoun quoted about $120,000. AAnxious to
get a head start on other companies, Calhoun got the author
ity to make a bid without :a profit margin tacked on. The
day that Mkrumah arrived, Calhoun was told that the State
Department would suggest the engineering study to Mkrumah,
28 Jopp, og. ext., pp. 12-13. 25 would offer to split the cost with the Ghanaian Govern ment, and would recommend that Kaiser make the study.
State Department officials suggested that Calhoun meet with the Ghanaian delegation. Two days later a meeting was held with Nkrumah, Gbedemah, and their aides. Nkrumah accepted the State Department's proposal, and.'asked if he could meet with Edgar Kaiser in Accra in the near future.
Kaiser agreed, but only if he could meet with Nkrumah be- before he left the U.S. The meeting was arranged and several days after Calhoun and Kaiser went to New York to meet
Nkrumah in this thirty—fifth floor presidential suite at 29 the Waldorf-Astoria.
Philip Siedman describe d the meeting;
The Waldorf meeting was a success. The two men took to each other immediately. Nkrumah answered Edgar's tentative inquiry about cltthing to be brought to Accra with an off hand, "a dinner ajcket would be fine." And when they parted, Kaiser had decided that Nkrumah was a man to be trusted - a decision that was reinforced in Septem^gr whem Edgar made his quick trip to Ghana.
29 siekman, og. cit., pp. 131, 199
30 Ibid., p. 199. 26
Nkrumah recalled;
I first met Edgar Kaiser in the Waldorf-Astoria Hotel in New York when he called to see me with Chad Calhoun for discussions on the proposed Volta River Project. I was immediately attracted to him. He spoke in a direct manner, firmly and to the point, sure of his facts and with deep sincerity, not mentioning his sense of humour. Here, I thought, is a man I can do business with. And so I stressed to him; "Our first considera tion must be power, because power is like money - nobody seems to have enough of it."
During our very animated discussion, I saw chad Calhoun turn to Edgar and say; "This man talks like your father." We certainly understood one another. From that date a firm friendship developed between us, not only from the business side, but the sort of true and lasting friend ship which is built on mutual understanding and trust, and wh ch develops naturally through that rare and indefinable bond of affinity.
While at the Waldorf-Astoria, Nkrumah, Edgar Kaiser, and Chad Calhoun also met with President Eisenhower. Nkrumah summed up the results of this meeting;
Before we left Washington, President Eisenhower and 1 issued a joint statement. in it, we said that we had discussed the Volta River project and the five year plan. It was agreed that private American interests should continue to explore the aluminum manufacturing phase of
31 Kwame Nkrumah, Work on Aluminum Smelter Begins. Speech at the Ground Breaking Ceremony of the Aluminum Smelter at Tema (5 December, 1964), p. 4. 27
The Volta project, and at the same time examine proposals for other manufacturers. Engineering reports which had been prepared in 1955 were to be brought up to date, and the cost shared.
Kaiser Reassessment Report. The agreement to finance a new engineering survey was signed between the Government of Ghana and the United States Government on August 25,
1958. Immediately, the Henry J. Kaiser Company of Oakland,
California, was hired to carry out the survey. Kaiser's engineering crews arrived in Ghana several days later. By
February, 1959, the re-assessment report was completed, and several weeks later it was submitted directly to President 33 Nkrumah by Edgar Kaiser. The survey cost $210,000 and was paid for by the International cooperation Administration and the Ghana government on a 58-50 basis.
The Reassessment Report compared favorably with the 1956 Report since the new scheme allowed for an elect rical output of one million Kilowatts and a total cost of
32 Kwame Nkrumah, I^ Speak of Freedom (New York; Pragger, 1961), p. 46.
33 Ghana, Ministry of Information and Broadcasting, Ghana, An Official Handbook (Accra; Government printer, 1962), p. 128. 28
about $304 million. The Jackson-Halcrow survey had proposed 617,000 Kilowatts and an estimated total cost
of $900 million. Thus, the Kaiser survey made the whole
Project cheaper and more attractive toc all outside 34 parties. Several major changes were made in the 35 original plans of 1956.
First, the site of the dam was relocated one mile
south of Ajena to Akosombo. Here, the dam would be more difficult to construct, but it could be built in a much
shorter period of time (four years), and at a lower cost.
In addition to the 883,000 kilowatts to be generated at
Akosombo for an estimated $168 million, the Report sug gested two other dams. One would be a second stage dam, downstream at Kpong, generating 140,000 kilowatts at a construction cost of $43 million. The other would be located at Bui Gorge on the Blade Volta River and would generate 93,000 kilowatts at a cost of $71 million.
34 Ibid.
35 For a detailed analysis of the cost accounting methods used in Kaiser's study, see; A. B. Futa, og. cit 29
Thus, the total electrical output would be 1,080,000 kilowatts. It would be distributed through a 500 mile transmission network, which would cost $34 million. Forty per cent of the power would supply the smelter, 60% would go to GhanaJs domestic requirements.
Second, the proposed aluminum smelter site was moved from Kpong to Tema, thus saving Ghana the cost of constructing a new township. The smelter would produce
141,600 long tons of processed aluminum per year, initially, and 200,000 long tons per year ultimately. The total cost of the smelter's construction would be $128 million (iE 56.7 million). The processed aluminum could be marketed outside of the U.S., primarily in Western Europe.
Third, whereas the 1956 report envisaged a complete project financed by public authorities, the Kaiser report *TS. called for some private financing. The aluminum companies could finance the smelter, while governments and other public agencies could pay for the dam, port, harbor, rail ways, and other facilities.
Fourth, Kaiser engineers proposed that for an initial ten-year period the alumina could be imported, rather than processed from local bauxite. Kaiser noted, however, that
Ghana's bauxite deposits were of a very high grade. The report suggested that the recently tested Kibi deposits 30 could be used eventually.
By initially importing alumina, the development of new mines, additional raüvays, and a new aluminum factory would be postponed thus minimizing the initial capital costs of the Project, These additional industries could be developed later.
Finally, the Kaiser report indicated that thirty-two industries could profitably operate in Ghana. These included electro-smelting of iron ore imported from Liberia, the manufacture of steel products, the processing of ferro manganese from Ghanaian ore, the production of paints, insecticides, cements, etc. It might be noted that Kaiser's enterprises included many of these industires.
Kaiser*s deepenijting commitment to the project. During their March, 1959, meeting in Accra Edgar Kaiser suggested to
Nkrumah that his firm be given an engineering contract to begin drawing up specific plans for theproject while Ghana searched for financing & r the dam and for someone to put
See; Ghana, Ministry of Trade, Handbook of commerce and Industry (Accra; Government Printer, 1960), p. 85; Jackson, og. cit., p. 153; and George Miller, "Kaiser Industries Corp." Congressional Record, Vol. 106, Part 5, Maxch 24, 1960, pp. 6550-6551. 31 up the aluminum smelter. Nkrumah was desirous of starting t the project as quickly as possible and granted the engineer ing contract, in all, Kaiser Engineers and Contractors,
Inc. was to receive $25 million (LG9 million) in engineer ing contracts. For example, in April. Kaiser Engineers signed a $3 million contract for the preliminary engineer ing design and construction work, a contract for $7 million for access roads, housing, utilities, warehouses, etc., and a $5 million contract to start on the first dam. During that month, the preliminary ground work was started at 37 Akosombo.
Also,^at that historic meeting Nkrumah asked Kaiser,
"Now, how about taking off your Engineering coat, and putting on your Aluminum coat?" Clearly, the inference was that
Kaiser should take the lead in forming a consortium to operate the proposed smelter. Edgar Kaiser was taken aback somewhat since he knew this would disqualify his engineering firm from any major participation in the
37 Siekman, op_. cit., p. 199. 32
construction of the dam dutt to anti-trust laws in the 38 U.S. He answered affirmatively, however, ■
One other consideration that made Kaiser hesitant
to accept this offer was Aluminum Ltd's, role. In
Januaryni Nkrumah had asked Aluminum Ltd. to form a
consortium to put up the smelter. Kaiser did not wish to tread on the Canadian Company's toes, but duripg the spring 39 and summer Aluminum Ltd.'s efforts came to nothing.
Kaiser tries to form a consortium. Edgar Kaiser thus reached two decisions. First, if a consortium was to he formed, the Kaiser people would have to do it themselves.
Second, if the Project was ever to be realized, the U. S.
Government's financial participation would be a necessity.
However, at this time Nkrumah ' s domestic and foreign policies were being questioned in many quarters due to what appeared
to be growing Soviet influence in Ghana. Edgar Kaiser was put on the defensive back home. He did not wish to be
accused of aiding a state that would eventually "go
Communist." Therefc re, he argued that the project was
38I Jackson, pp_. cit., p. 153. 3 9, ^Siekman, o£. cit., p. 199. 33 designed to raise the standard of living of the Ghanaian people, not the glory and prestige of their leaders.
Further, he claimed that if the U.S. did not back the
Project, the gap would be filled in by the Soviets.
That summer Kaiser tried to interest several companies in the consortium. By August he had the support of Aluminum Ltd.'s president, Nathan jel Davis. However, according to Samuel Waugh, President of the Export-lmport
Bank, other companies felt that the existing aluminum facilities in the U.S. were sufficient for the imrte diate 40 future.
Finally, by November, Kaiser had persuaded other companies to at least form a study group. Kaiser and rep resentatives from Alcoa, Aluminum Ltd., Reynolds, and
Olin Mathieson each put up $50,000 to form the Volta
Aluminum Company, Ltd. (VALCO)_ . No formal commitments were made by these companies, however. They would simply examine the smelter possibilities in detail through exploratory talks with the U.S. and Ghanaian Governments.
On December 16, 1959, VALCO signedthe principles of
Agreement with the Ghanaian government in Accra. In
"^°Ibid., p. 200. 34
January, 1960, the Volta River Project Secretariat was 41 established.
The creation of VALCO spurred on Ghanaian officials to seek financing abroad. Their government was willing to put up half of the cost of the dam and power station. They
S(^ht out the U.S. U.K. and the World Bank for the rest.
The World Bank (IBRD) took the lead in investigating the project. Bank officials visited Ghana in January and March
1960, to determine the feasibility of th^^roject and its probable effect on the national economy. The World Bank's . 42 reort, delivered ii^uly, was not enthusiastic.
It concluded that, "Even taking all intangible benefits into account, the overall balance of costs and benefits is on the positive side to only a modest extent at best." First, it put the total cost above the $300 million mark set by Kaiser in recognition of the fact that large government financed public works projects usually run above estimates. Secondly, the Bank estimated that Ghana's power needs wofiild be below what Kaiser had
"^^Ibid.
42 Ibid., p. 204 35 predicted. Therefore, it recommended postponement of
the construction of ftie transmission lines. Also, the 43 Bank insisted that the project he self-supporting.
Nkrumah's decision to start the project. In the meantime, Nkrumah decided to go ahead with the construc
tion of Akosombo Dam. Even though Kaiser had not reached any agreement on the consortium, and international finance arrangements seeméd tenuous at best, Nkrumah seized up the political climate as favorable, in May, 1960, tenders for the dam construction and power installations were called for. That November, Accra was flooded with contractors who were then taken to Akosombo to assess the project. In February, 1961, tenders were opened and tabu lated in Accra.
Distribution of the Contracts. In May, 1961, the main construction contract for the dam (LG 16,076,961) went to Impreglio, and Italian consortium. That July,
Impreglio started its on-site work with the construction of the diversion tunnel.
43 Ibid, 36
Then, Ghana called for tenders for subsidiary
contracts. On October 3, 1961, bids from firms in twâlve 44 countries were opened and tabulated in Accra. contracts were awarded in December and are listed in Table I.
TABLE I 45 CONTRACTS FOR THE CONSTRUCTION OF THE VOLTA DAM
Contract company Amount (L Ghana)
Turbines and governors Hitachi Ltd., Japan 898,128
Generator, transformers International G.E. 1,643,792 and major electrical Co. (USA) using a equipment Canadian subsidiary
Cranes and hoists Wagner-Biro Aktien- 301,006 gesellschaft, Austria penstocks Chicago Bridge Ltd., UK 503,000
Gates, thrasbracks, Waagner-Biro 415,000 and rolling hatch covers
Transmission lines Powerlines, Ltd.,Nigerial,968,806
161 kv substations Gruppo-Industrie 3,869,262 Electromeccaniche per Impianti all'Estero & Sadelmi s.r.l., Italy
44 Jabfcson, op., cit.,p. 154. 45 Ghana, An Official Handbook, p. 13©. 37
TABLE I (continued)
Contract Company Amount (L Ghana)
Warehouses and A Lang Ltd., Ghana 84,026 personnel (L Ghana - $2,80 U.S.)
The ImprecTlio consortium. Impreglio was composed
of three individualcontractors, Girola, E. Recchi, and
Lodigiani, as well as Impresse Italians all'Estero
(Impresit), the consortium which built theretriba Dam on
the Zambian-Rhodesian border. Impresit was composed of
four construction companies, one of which was a subsidiary
of the Fiat automobile company.
in this case, the Italian firms pooled their re
sources to form a permanent floating consortium. This was necessary in order to match the financial resources of large
U.S. and British construction firms. The Italian firms have had several advantages over their competitors. First, they
are willing to work for a low profit margin, often less than
5 % . Secondly, their equipment is located in Africa so they are highly mobile. Also, they do not represent a post-war
colonialist power, so that no one can call them neo-colonialists 38
Finally, they claim that the post-war reconstruction of 46 Italy taught them how to work with small budgets.
The world market favored Ghana at this time as com petition in the construction business was intense. Impreglio's bid was L 4,000,000 lower than the engineer's estimate.
Tenders for the supply of equipment {turbines, generators) and for the construction of power transmission lines were awarded, likewise, at a savings of oveajjh 4,500,000.
Advantages of an early start. The results of the early awards were, first, to save Ghana a considerable sum of money, and second, to gain a full year in theconstruction period. Thus, the date for the dam's com^tion was moved 47 up from September, 1966, to September, 1965.
Negotiations on the cost of power. About two weeks (/ after the World Bank's report came out, Calhoun and D. A.
Rhodes, president of Kaiser Aluminum arrived in Accra on behalf of VALCO in order to discuss the power cost with
46 "Italy's new empire," Fortune, October 1965, pp. 74, 76 47 Jackson, op_. cit., p. 154. 39
The Ghana government. Kaiser engineers had estimated that
a reasonable rate should be about 2.5 mills per kilowatt
hour (KWH), while the Ghanaians demanded 4.5 mills in
accordance with the World Bank report. During the neg
otiations Calhoun felt handicapped since he had not seen
the report, and the Ghanaians refused to show him their
copy. Apparently, the World Bank's Vice president, J.
Burke Knapp had felt this repbrt could be wielded as a bargaining tool. Consequently, Calhoun did not know,
on which points the Woirld Bank's report had differed 48 with Kaiser's,
Then, Calhoun met a European friend in Accra who
claimed that he possessed a copy, but Calhoun refused to
look éb it. When he told the Ghanaians that their report was not such a closely guarded secret after all, they still
refused to show him their copy. Calhoun then stormed off
to Paris where he met his friend and received a 35 mm. photocopy. He proceeded on to the U.S. where Kaiser
officials analyzed the report. Then they prepared three
48 Siekman, op. cit., p. 204. 40 cablegrams to Nkrumah which would be spaced at short
intervals. The first two stated that Kaiser was pre paring to withdrawn from the project. The third one would cancel the project.
But the telegrams were never sent, because Kaiser executives in a conference at Oakland, California, decided to try to convince the World Bank that Kaiser's estimates were more realistic than Bank officials thought. Edgar
Kaiser finally won the Bank over to his point of view and in subsequent negotiations, Ghana and VALCO agreed on 2.625 mills per kwh.
Ghana seeks public finance. Early in 1961, Ghana began to line up loans for the power project. Commitments were: $47 million from the World Bank, $37 million from the
Export-lmport Bank and the U.S. Development Loan Fund, and
$14 million from the British Government. All of these loans were conditional upon the establishment of an aluminum smelter,
Ghana-Valco Agreement, 1960. Meanwhile, Kaiser reached a tentative agreement with the Ghanaian Government on VALCO's operating conditions. Ghana promised the consortium a ten-year tax holiday and literally a free 41
hand in running the business. VALCO agreed, in turn, to
purchase predetermined amounts of power. After a six-year
period, VALCO would purchase 300,000 kwh continuously at a
rate of $6,898,500 per year.
VALCO also made an agreement with Ghana covering.;
its relationships with its parent companies. This contract
specified that the U.S. aluminum companies would supply
alumina and buy finished ingots, in proportion to their
percent of ownership, in order that VALCO could meet its
power commitment. After ten years, VALc8{»]uld get a special 49 tax incentive to process Ghanian bauxite.
The next problem was to transform VALCO into an qperating company. In December, 1960, Alumina Ltd.
formally withdrew on the grounds of excess capacity and
a new reduction process that might change its approach to
aluminum smelting in the future, in April, 1961, Alcoa
bowed out,and in July, Olin Mathieson left cecause of
its large operation in Guinea, other reasons for their
leaving were fear of no markets for the aluminum, and
the spectre of anti-trust. Finally, there were the
49 Ibid, 42
political dangers of instability, excess regulation, or
nationalization. Thus, Kaiser was left with a 90% interest
and Reynolds Metals, the remaining 10%. For this reason,
Kaiser made sure that he negotiated on investment guarantee 50 with U. S. Government.
Nkrumah and Kennedy. Early in the spring of 1961,
President Kennedy began to take a close interest in the
project. This interest was reinforced by his March meeting with president Mhrumah, in Washington. State Department
negotiators^hen told Kaiser that they were giving the
project their full support, u. S. loans would be mad#
through the Development Loan Fund and the Export-lmport 51 Bank. The legal provisions of the loans will be dis
cussed in Chapter Six, while the actual commitments are
covered in Chapter Pour.
After his March meeting with Kennedy, Nkrumah had
further discussions with Eugene Black, president of the
World Bank, and with prime Minister MacMillan regarding
^^Ibid., p. 206
^^Ibid. 43
the Volta Project, Confidently, Nkrumah announced to
Ghana's parliament on April 18, 1961, that only a few
formalities had to be taken care of, and that the final fi2 agreements would be signed about one month later.
As will be explained subsequently, political events
held u^pproval of the loans until December. However, on
January22, 1962, the final agreement was signed in Accra between President Nkrumah and Edgar Kaiser. Earlier that day, this Master Agreement between Ghana and VALCO had been 53 approved by the parliament of the Republic of Ghana. A discussion of the legal asepcts of the Master Agreement will be presented in Chapter Six.
Establishment of the Volta River Authority. Ad ministration of the project had been conducted by the Volta
River Secretariat with three branches ; Legal, Administrative, and Construction; and a Cabinet sub-committee called the
Standing Development Volta Riverproject Committee. How ever, in April 1961, in anticipation of an early agreement
52 K. Nkrumah, The Road Ahead, An Address to the National Assembly (Accra, Government Printer, 1961), pp.8-9. 53 Jackson, op. cit.. p. 156, and Jopp, op. cit., p. 16. 44
Ghana's parliament passed the Volta River Development Act
(Act. No. 46) which created the Volta River Authority
(V.R.A.). The v.R.A. was a statutory corporation
(similar to the Tennessee valley Authority), designed to take over the administration of the actual construction of the Project. The V.R.A.'s six-member Board of Directors was chaired by President Nkrumah.
Functions of the Volta River Authority. The V.R.A.'s responsibilities were (a) to plan, execute, and manage the development of the Volta River, including the -construction and operation of the dam, power station, and transmission system; (b) to control the 3,275 square mile lake behind the dam; (c) to develop the lake for fishing, transport, and communications; and (d) to promote the health and wel- 54 fare of the people in the lake area.
The Volta River Authority (VRA^retained as its
Chief Executive, Mr. Frank J. Dobson, a Canadian on loan from the Ontario HydroElectric commission. Since the VRA was set up prior to the formal inauguration of the dam, the VRA gained nine months in which it was able to form ulate its plans and decide how best to find and deploy the
54 Jopp, p. 17. 45 assistance it needed. By the time the contractors moved in.
The Akosombo site was ready with roads, housing, water supplies, a hotel and other facilities. In chapter Five it will be seen how the VRA plans to implement related development projects which are a derivative of the dam and
Lake Volta.
During its existence the VRA has been able to recruit many national and international agencies to help it fulfill its functions. These agencies include the Ghana army,
Ghana's universities, the Worker Brigade, the United
Ghana Farmer Council Cooperatives, the united Nations;
National physical Plan Mission, and the Food and Agriculture
Organization, In Chapter Seven it will be seen how VRA resettled 80,000 people in conjunction with many of ., . 55 these agencies.
VI. PHHSE IV; 1962-1966
Key construction dates. part IV of the Volta River project epic, the construction era, is mundane compared to
^^Ibid. 46 the stormy negotiations of period III. preliminary construction on the dam had started in 1959, while the
Tema Harbour scheme was started in 1952 and completed by
1962. Since this period was one of engineering feats and construction, the author feels it is somewhat alien to a social science treatise. It will therefore be presented in outline form:
1961
July Impreglio started work on site- divers ion tunnel.
October Dredging of sandfrom river bed started.
1962
January 23 Dr. Nkrumah released blast at Akosombo which marked formal start of work oh the dam.
February Work on upstream coffer dam started,
June Upstream coffer cam spanned river from bank to bank; 1,000 feet div ersion tunnel opened; work on down stream coffer dam started; delivery of penstock sections started.
Ju 1y-November Coffer dams submerged byflbod season.
November Work on coffer dams resumed and downstream coffer dam closed. 47
1963
February Both coffer dams completed and dewatering of river bed started.
March Dewatering coitpleted, grout curtain formed and laying of clay core started.
July Dam raised to elevation 50 (low water level)y first and second flumes opened (eastern side of dam) .
September 23 Volta River floods. Peak flow (510,000 cubic feet per second) recorded.
December Western side of dam raised to elevation 150.
1964
January Repair work started on flood damaged eastern side of dam.
March 17 Pumps capsized and recovered within a week.
April Dewatering completed and all flood damage repaired.
Mayl9 Diversion tunnel closed. Lake formation started.
July 1 Dam raised to Elevation 150.
December 1 Dam raised to Eelvation 270.
December 5 Ground breaking ceremony at VALCO Smelter, Tema. 48 1965
February 8 - ceremony to mark formal com pletion of dam (elevation 290).
June 28 - Intake channel flooded.
July 1 - Lake level reached 200 feet,
July 14 - Powerhouse tailrace coffer dams removed.
August 1 - Testing started on first tunbine.
September 1 - First power produced on commercial basis.
Description of the Akosombo Dam. The uniqueness of
the Akosombo Main Dam stems from the fact that it is a
rock-fill type :
The center core of the dam con si sts of heavy, compact clay, which is excava-tjed nearby. The clay is flanked on either side, first by sand and then by finer stones. Next, medium-sized rocks are added and, finally, the whole is consolidated with large rocks. The availability of all these materials in the immediate vicinity of the dam helped to keep down construction costs.
The main wall of the dam is 2,200 feet long and 40 feet wide, rising 370 feet high, i.e., 440 feet from the bed rock. The backup of the Volta's waters inundate an
"Key Dates," Ghanaian Times, January 22,1966. 57 J. LeHarival, "Chain of Stones," Shell Magazine (London), March, 1965, p. 87. 49 area of 3,72 5 square miles, for a length of 250 miles, and retain a storage capacity of 120 million acre-feet of water. Also, a Saddle Dam had to be built nearby which 58 would seal a gap in the surrounding hills to the east.
The Volta River project as an example of peaceful
International cooperation. The Volta River Scheme was truly an internatioraL effort. The role of Canadian, Frank Dobson, has already been mentioned. Other Canadaina from Ontario
Hydro were : T. S. Johnson, construction manager, who developed the 52msettlement villages; K. A. Campbell, woods manager, who was responsible for clearing 6,200 acres for town sites, 10,000 acres for farm land, and 3,000 acres for the river bed; and F. A. Pertulla, electrical engineer, who along with Thirteen Ontario Hydro technicians taught
Ghanaians how to operate the dam and powerhouse.
Also Canadians were the generators, tEan#formers, switch gear, and control panel of the power plant which were sold to Ghana by the Canadian General Electric Company
58 Jopp, op," cit., p. 19, 50
59 at a cost of $5 million.
The Americans instrumental in the project have already been mentioned, as well as Australia'® main contributor. Sir Robert Jackson. Italians connected with the dam were Dr. G. Lodigiani, O.B.E., the chairman of
Impreglio, and Mr. M. Baldasarini, the consortium's manager.
In all, construction workers, engineers, and management represented the U.S.,U.K., Canada, Italy,
Ghana, Nigeria, Australia, Pakistan, Brazil, the Nether lands, and Portugal. Equipment, as shown in Table I, added other countries to the list.
At the inauguration of Akosombo on January 22, 1966,
President Nkrumah made note of this international effort:
The Volta River Project is a concrete symbol of the type of international cooperation which can, to quote my friend Edgar Kaiser, help to "forge world peace." It is perhaps the greatest tragedy of today's world that billions of dollars, rubles, and pounds should be spent every year on military arm aments and on wars. If the money wasted on wars and war preparations were invested in projects like the one spread out before us, these enormous capital funds could revolut ionize the economies not only of the developing world, but also of the developed
59 Canadians at the Volta Dam," Foreign Trade (Canada), March 19, 1966, p. 36. 51
countries. It would in fact eliminate what is the major threat to world peace, namely, the ever widening gap between the developed and developing nations. Unless this gap is closed, no peace effort of any kind can save mankind from ruin and ultimate destruction.60
Speech included in report by Charles W. Bass, Second Secretary of the U. S. Embassy in Accra to the Department of State, (unclassified) Department of State Airqram # fi-341, February 1, 1956, pp. 5-6, Enclosure No. 7; see also, "Ghana hopes opening of Volta River Project brings new economic era, "Intermtional Commerce," February 7, 1966; p. 20; and "Nkrumah at the Volta," West Africa (London), January 22, 1966, p. 91. CHAPTER II
U.S. FOREIGN POLICY TOWARDS AFRICA
This chapter is concerned with United States policy towards Africa during the past decade as stated by re sponsible policy makers. The first section will deal with the goals or ends towards which our foreign policy has been directed. It draws heavily from public speeches made by the president, the Secretary of State, and the
Assistant Secretary of State for African Affairs. The latter part of the chapter deals with the means, or methods, of implementing our foreign policy; specifi cally, foreign aid, foreign trade, and our attitudes toward private investment abroad. Again, the emphasis is on public statements made by government officials
However, attitudes of officials in the priate sector are also explored here. The general purpose of this chapter is to provide the reader with a knowledge of those aspects of
American public policy relevant to the Volta River projeg(g which will be useful in evaluating the project. 53
I, U, S. FOREIGN POLICY TOWARDS AFRICA
SINCE 1957
The emphasis of this chapter will be on two dis tinct periods of United States foreign policy towards
Africa; 1957-1961, and 1961-1966, James C. Coleman defined two previous periods of American policy as an age of indifference (1885-1945) and a decade of reluctant involvement (1946-1956) . While stating that the years
1957“1961 might be called the period of the American awakening,^ the year 1961, with the inauguration of
President Kennedy, marked the start of the contemporary phas e.
U. S. Goals and interests in Africa under the
Eisenhower administration. The year 1957 will be our starting point. The emergency of Ghana as the first black
African state to receive independence from European colon ialism, meant that a new era of diplomacy was at hand.
James S. Coleman, "Problems of American Foreign Policy, " in Ivan Hinderaker, ed., American Government Annual, 1961-1962, (New York: Holt, Rinehart and Winston, 1961), pp, 102-103. 54
The visit of former Vice president Nixon to Africa on the
occasion of the independence celebrations in Ghana in March,
1957, and the subsequent establishment of formal diplomatic
relations between Ghana and the United States, resulted in a
sense of urgency in official State Department circles. Seeing
Britain's move in the erstwhile Gold Coast as a precedent,
African affairs were raised to a higher priority.
In 1958, a separate Bureau of African Affairs was
created within the Department of State, headed by an
Assistant Secretary, Joseph C. Satterthwaite, Several
new polry trends developed. The first trend was a more
sympathetic official position toward independence in
Africa and a looser interpretation of the concept of
self-determination. A second change occurred in our
attitude towards economic aid to Africa. We continued to
stress the value of Africa's economic ties with Europe, but we put a new emphasis on our own aid effort there.
Thirdly, by 1960, we abandoned our policy of regarding
nentralism as immoral. Finally, we encouraged an increased
role for the United Nations in Africa, particularly sup
porting efforts directed toward African security and
development. In the United Nations, we began to vote with 55 the majority on issues concerning the racial situation in
Southern Africa. Previously, we had either abstained or 2 voted with the European position on such issues.
Despite these changes in policy, the American attitude towarda ftfîrica, under the Eisenhower administration, was still to regard Africa as the bailiwick of the European powers,
Major policy decisions on Africa continued to be formulated in the Bureau of European Affairs. Also, it must be kept in mind that these changes were only brought about gradually over a span of five years.
James K. Penfield, Deputy Assistant Asecretary of
State for African Affairs, articulated America's position on Africa late in the Eisenhower administration. First, he considered traditional united States interests in Africa.
From a humanitarian and a religious standpoint, there had been a long hi story of missionary work as well as the founding and fostering of Liberia by the American Colonization Society.
Another consideration was the long history of trade with
Africa, going back before the clipper ship era. Finally, one-tenth of America's population traces its ancestry back
2 Vernon McKay, Africa, in World Politics. (New York; Harper and r o w , 1963), pp. 343-346. 56 to Africa.
Secondly» in the contemporary era, Africa posed strategic interests. North Africa was vital to the de fense of Europe and NATO's southern flank.
United States objectives in Africa were several.
First, America sought to demonstrate that it had a friendly interest in the welfare of African peoples for their own sake. Secondly, united States policy encouraged development consonant with free world ideals. Thirdly, we sought African recognition of their international respon sibilities and their interdependence with the world.
Fourthly, we believed that all permanent residents have legitimate interests which must be given fair and just consideration. Finally,the U.S. must live up to the expecta tions of Africans who look to America for social, economic, 3 and political progress as well as spiritual guidance.
Penfield called for action:
We simply cannot afford to sit idly by and see this great continent drift into chaos, confusion, or communism... we must be prepared to give emerging Africa both
3 James K. Penfield. The Role of the United States in Africa: Our Interests and Operations. Department of State Publication 6858, Near and Middle Eastern Series 43, ABgust, 1959, pp. 2-3. 57
sympathetic support and tangible assistance so that its great potential will be achieved in a manner which will benefit both them and us all.4
New priorities of the Kennedy adminis tration. The
entrance of sixteen African states into the Unitec^ations
in September, 1960, raised African policy to a top priority
level with the advent of John F. Kennedy's administration.
The appointment of Governor G. Mennen Williams to the
post of Assistant Secretary of State for African Affairs before the appointment of a secretary of state was a
clear indication of president Kennedy's concern for African policy. Secondly, the creation of the Agency for Inter
national Development, with its new foreign assistance principles and criteria, marked a milestone in United
States foreign economic assistance policy. These two
events were important enough to separate U.S. African policy after 1961 from all previous years.
Statements of foreign policy goals. president
Kennedy, in his second State of the union Message, stated
the overriding goal of united States foreign policy:
^Ibid., pp. 8-9. 58
Our basic goal remains the same; a peaceful worl d community of free and independent states — free to choose their own future and their own system, so long as it does not threaten the freedom of others ... Some may choose forms and ways we would not choose for ourselves — but it is not for us that they are choosing. We can welcome diversity — the communists cannot. For we offer a world of choice — they offer a world of coercion. And the way of the last shows clearly enough that freedom, not coercion, is the wave of the future.5
Dean Rusk further explained this goal in a speech to the American Negro Leadership Conference on Africa in 1964.
The abiding goal, he said, is a world of peace, freedom, and
justice, consistent with the preamble and Articles One and
Two of the United Nations charter. The United States seeks a world free of aggression; and world of independent nations; a world of social and economic advancement for all peoples; peaceful settlement of disputes and the ultimate world rule of law; a world where the powers of the state over the in dividual are limited by law and custom; a world free of hate and racial discrimination; and a world of equal rights and opportunities
When this broad goal was translated into an African
G. Mennon Williams, The Challenge of Africa to the Youth of America, Department of state. Frees Release #158, March 9, p. 5. ^Dean Rusk, Freedom and Development, Department of State press Release #415, September 25, 1964, pp. 1-2. 59
policy, our objectives appeared as follows:
1. To help Africa develop stable and independent nations able to make their unique contributions to the world community. 2. To help the governments of Africa work to meet the legitimate aspirations of their peoples for a better life. 3. To hfelp the peoples of Africa develop free societies and institutions in harmony with their own beliefs and cultures
The above objectives were said to serve both our ftat*
ional self-interest and our historic humanitarian outlook
towards peoples less favored with material wealth. G.
Mennen Williams stated that the most significant reason
Africa was of concern to the United States was "that neither we nor our children can live in peace, freedom, and
prosperity in the long run unless the peoples of Africa
can develop in peace and freedom and fulfill their funda mental aspiration for a better life. Without such
development, the continent's troubles will be a con- g tinuing threat to world peace."
Identification of U.S. policy with African
Aspirations. Therefore, foreign policy statements
7 U. S., Department of State, Bureau of Public Affairs, Office of Media Services, The United States and Africa. Depart ment of State Publication 7710, African Series 40, Released July, 1964, pp. 3-4. 8 G. Mennen Williams, U. S. Policy in Africa. United States Department of state. Press Release, No. 48, March 18, 1965, p. 1. 60
attexnÿ>ted to identify the United States with African
aspirations and sought to demonstrate how United States policy coincided with them. Six aspirations were most
often listed: freedom, dignity, a more abundant life. 9 education, African unity, and a policy of non-alignment.
In support of these aspirations, America's policy was one of self-determination for all peoples because :
We stand confident that if tie peoples of Africa exercise their own free choice,they will ulti mately seek the goals that we seek, even though not always by exactly the same methods
In formulating a policy toward dependent areas in
Africa, support was given to the rising tide of self-
determination because "deliberate and expeditious prepara
tion for self-government is essential to African advancement and the avoidance of tensions that would imperil progress already made.
In identifying with African policy, however, the qualification was frequently added that the U. S. must
9 ______. Germany's Role in Modern Africa, Department of State, press Release #250, H«y7~~17, 19631
Mennen Williams, The United States and the New Africa, Department of State press Release #618, October 12, 1962, p. 2. 61 achieve full racial equality before it can meet African aspirations for equal rights and equal treatment with all other nations. In 1966, Africa was the sole subject of a speech by President Johnson. This was the first time any
American President haddevoted a full speech to Africa. His topic was inextricably tied up with the civil Rights Movement at home. In referring to the dependent areas in Africa,
Johnson stated: " .
The foreign policy of the United States is rooted in its life at home. We will not permit human rights to be restricted in our country. And we will not support policies abroad which are- based on the rule of minorities or the discredit ed notion that men are unequal before the law. We will not live by a double s t a n d a r d . 12
U. S. interests in Africa. United States interests in
Africa did not change materially in this era of the New
Frontier and the Great Society. Strategically, North
Africa still contained several U.S. air and naval bases, although by 1966 most of these were gradually being phased out. Economically, the potential trade which could flourish in the future was realized when it was stated
12 Lyndon B. Johnson, "Remarks ..." Office of the White House press Secretary, May 26, 1966, p. 2. 62
that the United States' own economic growth depended on world wide economic growth. There was also political
interest due to the growing importance of the African
caucus in the United Nations. It controlled over one-third
of the membership in 1966 and its numbers were still growing,
Less important, though significant, were United States
space tracting stations in Nigeria, South Africa and
Zanzibar. Finally, our traditional interests mentioned earlier by penfield were reiterated by both the Kennedy
and the Johnson administrations.
U. S . Policy in Africa as ^ check on communist
subversion. Inevitably, the United States would have an
interest in preventing Communist penetration of Africa.
It was believed that American policy in Africa would be
successful for two reasons: First, we have never a
colonial power in Africa, and second, our record of
support for African independence since 1950 had been 13 good. However, our close association with the colonial
13J. Wayne Fredericks, Our Policy Towards Africa, Department of State Press Release #390, July 18, 1963, p. 1. 63 powers of Western Europe did serve to weaken our position
Most notable among Communist efforts to undermine Western interests in African positions on major international issues. The long-range goal of the Communists, we recognized, was the creation of Communist governments in Africa:
There can be no doubt about the necessity for the U.S. to prevent communist pene tration for subversion through providing new nations an alternative source of aid to the often still-suspect former colonial métropoles.
No African country has yet become a Communist satellite. United States policy recognized several reasons for Communism’s lack of success in Africa.
First, there were strong economic, cultural, and social links with western Europe. The Sino-Soviet split was a major factor. Finally, there was a revulsion in Africa towards any attempts which would limit African freedom.
In the following statement,credit was given U.S. policy for stemming the tide of Communism in Africa :
Ibid., p . 1 64
We are not in Africa to expand the cold war. Where the Communists have intruded — and they are applying more and more pressure — we have met them and stopped them. We have even turned them back. ... the way to stop communism, is not simply to be against it but to eliminate the conditions that breed communism. The main battle, there fore, is not with the communists, but with ignorance, poverty, illness and malnutrition — conditions in underdeveloped lands that suggest communism might be an attractive alternative. This main battle is the fight we seek. It is important that we keep our sights on the proper target, because in winning the main bout we will continue to defeat communism as well.^^
U.S. foreign economic assistance policy. In order to fight the "main battle," President Kennedy proposed that the 1960's be a "Decade of Development." The United States would promote economic .growth and attempt to mobilize the resources of the free world. positive programs were established, based on new foreign assistance principles. The goal was longer term, planned contributions to sound economic development.
New aid emphasis since 1961. These programs in cluded long-term development loans from themwly created
Agency for International Development, the Peace Corps,
Mennen Williams. The New Frontier of Africa, Department of State Press Release #391, June 15, 1962, p. 5, 65 increased multilateral assistance from UN agencies, increased use of Food for Peace, as well as a continuation of student exchange and cultural programs.
president Johnson in his first State of the Union message reiterated the need for development.
We must strengthen the ability of free nations everywhere to develop their independ ence and raise their standard of living, and thereby frustrate those who prey on poverty and chaos. To do this, the rich must help the poor — and we must do our part
Goals of the policy, progress towards long-run stability is the result America desires from its aid.
Aid is given with no political strings attached. That is, in giving aid, we are not asking Africans to resha pe them selves in our image as the price of assistance. We do not wish every country to copy our political and economic systems, consistently, the State Department has opposed
Congressional proposals for automatic rebliation, by denial of aid, against another nation whose economic policies are inconsistent with our own notions of free
G. Mennen Williams, Address to the International Affairs Association, Department of State press Release #61, February 14, 1964, p. 5. 66
17 enterprise.
Further, our assistance policy is not merely a reaction to Communism:
We would want to help these peoples to make progress even if there was no such thing as communism. We would want to help, not only because that is our nature as a people, but because we know that in the long-run, there cannot be much stability in a world com posed of a new who are rich and many who are poor.
Relation of foreign assistance to U.S. domestic economy. Economic aid given by the United States is multipurpose. Not only does the aid stimulate economic development abroad, but it likewise stimulates domestic economic growth at home because :
... 90% of our foreign aid is in the form of American goods and services. Our aid programs help our agriculture, our metallurgical industry, our chemical industry, and our machinery and machine tool industries. They are helping to develop tastes and future markets for American products. And more than half of our economic aid is in the form of repayable loans.
^^George Ball, American Business Abroad, Department of of State Press Release #308, May 12, 1962, p. 5. 18 Dean Rusk, Trade, Investment and peace, Department of State Press Release #432, October 5, 1964, p. 7.
19 Ibid., pp. 8-9.
) 67
U.S. policy on trade and private investments.
Because United States' foreign trade and investment policy in Africa is derived from its overall foreign policy towards that region, American industry can help implement our foreign policy. First, it can support the goal of the development of nations. Second, our industry can encourage the growth of the private sector in countries 20 where this sector is either weak or embryonic.
Benefits of trade and investment. Expanded trade can have a significant impact. For example, expanded
American exports help our balance of payments problem while our increased imports provide export markets for our allies in the developed nations and our friends in the less developed nations. Trade with the less developed nations provides them with foreign exchange with which they can buy our capital equipment. Further, since the less developed
20 W. C. Foster, Trade, investment and U.S. Foreign policy. Department of State Press Release #633, October 19, 1962, p. 2. 68 countries' exports are primarily commodities, our in creased imports will help them maintain a more constant 21 income.
Private investment, likewise, has many beneficial effects. First, it provides a flow of capital, and manag erial and technical skills into the less developed countries
Second, a demonstration effect is :prôdueéd when a less dev eloped people observe how man, through his ingenuity, can improve his lot. Third, it can show socialist-oriented leaders how modern private enterprise can spearhead economic growth. Finally, it can help refute Communist claims that foreign business feeds off, rather than builds up, local 22 economies.
U.S. position on private investment. The official
American position on private investment in Africa is encouraging:
21 Ibid., pp. 4-8.
22 Ibid., p. 9. 69
Foreign capital investments have played an important role in the development of African enterprises and should continue to do so in the future. The Africans have said that they welcome private capital investment with the caveat that it should contribute to the econ omic well-being of the country as a whole and not be merely for the benefit of "outsiders." The days of colonial exploitation in Africa have virtually come to an end.^^
Warning against exploitation. During the process of decolonization, U. S. policy has supported African aspirations for economic and political independence.
Although there once was an era (the era of "Gunboat" or "dollar" diplomacy) when American business could operate abroad with considerable latitude and without heeding charges of econiamic imperialism, this is no longer the case. Today, U.S. business interests must respect the sovereignty of these new nations if these interests are not to contradict our policy of supporting independence and self-determination. Further, the
Government can no longer militarily intervene on their behalf. "Direct intervention would defeat the very 24 national interest served by such investment overseas."
23 J. Wayne Fredericks, op. cit., p. 7.
24 George Ball, op^. cit., p. 1. 70
This is especially true when Communist propagandists continually seek opportunities to make charges of neo colonialism and economic imperialism against Western business.
Advantages of investment in Africa. Africa offers the foreign investor many advantages. There are vast un tapped natural resources available. Socially, there are no rigid class structures or land tenure patterns which restrict upward mobility.
Disadvantages of investment in Africa. Despite these opportunities, Africa's general "investment climate" is poor. Africa lacks skilled workers, experienced manage ment personnel, indigenous private capital, entrepreneurs, educational facilities, foreign exchange, infrastructure, and large national markets. Political, financial, and social instability are more often the rule than the exception. Finally, socialist-minded leaders with a penchant for state enterprise often adopt unfavorable, 25 restrictive policies toward private capital.
25 G. Mennen Williams, American Foreign Policy and the Emerging Nations of Africa," Department of State Press Release #241, April 11, 1962, p. 8. 71
U.S. policies and programs. With these "non business risks" in mind, the United States Government has established many policies and programs which encourage private capital to enter less developed areas such as Africa.
Among these policies are a firm stand against expropriation without prompt and adequate compensation, coordination of public foreign assistance projects with private ones, and
the negotiation of bilateral treaties which are designed to protect the investor. Programs giving the investor in
centives to send his capital into less developed areas
include investment and feasibility surveys financed
through the Cooley loan program, and the investment
guarantees program. The latter, by far the largest and most successful, offers insurance to theprivate investor
against several types of risks. A specific risk guarantee
can be purchased against inconvertability of currency, and
or expropriation, and/or war, revolution, and insurrection.
In special cases, an extended risk guarantee may be pur
chased covering business as well as non-business risks
against a large percentage of the investment. Finally,
federal agencies provide a host of services to the business man through the coordinated efforts of the Department of 72 commerce, the Department of State, the Export-Iraport Bank,
~ 26 the Department of Agriculture, and many others.
U.S. policy of encouraging regional cooperation in
Africa. Additional efforts have been made recently on the part of the United States Government in order to create larger markets for private foreign investment. We have been increasingly encouraging regional cooperation and development through our foreign aid program. The following statement provides a convincing argument for these efforts;
In examining the physical and cultural frag mentation of Africa, today, the need for regional cooperation is apparent. This is a strategic moment to begin such a task as the field is virgin and available funds have to be channeled carefully for most efficient use... Larger markets are essential to attract modern industrial investment, and these can be achieved only by breaking down political boundary lines to form a common market — at least among sira 11 neighboring countries. Within a common market, there can be cooperation in development planning to secure the benefits of industrial special ization, and agreement can be reached on legal
U.S. Agency for International Development, Proposed Economic Assistance Program FY 1967 . (Wash; Government Printing Office, 1766), pp. 55-65. 73
means and wasy to provide an attractive investment climate
The role of private investment in Africa as a supplement to public assistance. In view of this policy, the u. S. has supported the Economic Commission for
Africa (EGA). ECA's philosophy is that regional economic integration and a program of regional projects will produce economies from large scale enterprises and will avoid duplication and competition. Fragmented markets have been too small to permit the use of the most up-to-date technology and mass market techniques.
Statements by public and private officials.
Investment, then, plays an important supplementary role in economic development andc-complements United States foreign policy in Africa;
... investment can play a very constructive role if it will combine imagination with patriot ism. Capital should be prepared to go into Africa not as a closed preserve with guaranteed profits, but as an area where it will be challenged to make an effective contribution along with a legitimate profit.... private capital...can do a particularly crucial job through its readness to prevent the
27 G. Mennen Williams, Aids and Obstacles to Political Stability in Mid-Africa, Department of State press Release #253, April 13, 1962, p. 12. 74
communists from taking over the investment and the foreign and domestic commerce of 9 0 any African state. °
The role of the business diplomat. Increasingly, and this is especially true in Africa, private investment has become an integral part of American foreign policy.
American business representatives an and will be in the
future serving the interests of the Government as well as pursuing their own ends. Congressman Barrett O'Hara of
Illinois, speaking on the House of Representatives floor in March, 1961, emphasized the role of the "business statesman." citing Kaiser Industries Corporation's
"people's partneidiip" arrangements in Ghana, Guinea, and Ethiopia, he said;
It calls for a new type of business executive, the business statesman. In this capacity, he serves not only his company, but also his country. He becomes an effective exponent of our foreign policy while he works closely with government leaders, businessmen and the public of the developing country.
Mennen Williams, American Foreign Policy and the Emerging Nations of Africa, op. cit., p. 8.
29 Barrett O'Hara,, "Ghana and the Role of America's Business Statesmen," Congressional Record, Vol. 107, part 3, March 10, 1961, pp. 3774-3775. 75
Mr. Chad F. Calhoun, Vice president of Kaiser
Industries Corporation, commented that;
we believe in working on a fair, understanding, and enlightened basis. It is our duty to serve in Africa as a counterforce to the threat of Communism.
Mr. Robert L. Garner, former president of the Intag- national Finance corporation was quoted in a speech by
Assistant Secretary G. Mennen Williams as having suggested responsibilities for foreign businessmen operating in developing countries that are worth noting. Mr. Garner believes that foreign businessmen:
... need to make special efforts to associate themselves with the local communities - first, through maximum use of local resources, and people, with positive efforts to provide training and opportunity for advancement to senior positions. (There are)... mutual advantages in joint ventures which local enter prises, or in sharing ownership with local investors.^1
^^"The Role of America's Business Statesmen," Steel; The Metalworking Weekly, March 6, 1961, p. 36.
31 G. Mennen Williams, op. cit., p. 11. 76
He cites the role of business in setting an example
for, and stimulating its local counterparts by supporting
education, technical and business training and other con*
structive community activities.
Thus, the American businessman plays the role of a
diplomat and the firm becomes an auxiliary of foreign policy.
In a later chapter we shall see that a whole new field of
international law has been built up around agreements signed between business firms and governments. Th# complex Volta
Dam agreements have contributed important documents to this new body of law.
Conclusion. In conclusion, U.S. foreign trade and investment policies are designed to serve the larger aims of peace, freedom, stability, and economic development. In Africa,
U.S. business has often come to outweigh Government efforts and has become a major expression of the American people;
The behavior of business abroad has, in fact, been the most effective answer to the ideological caricatures of American capitalism that have had such wide dissemination in many of the less-developed countries...business and government must be aware of the increasing interrelationship between foreign policy and the policies of American companies in their overseas activities.
32 George Ball, op. cit., p. 9. CHAPTER III
GHANA'S FOREIGN POLICY
The purpose of this third chapter is to present a complementary essay to Chapter Two by discussing
Ghana's foreign policy. During the era covered by this thesis, Ghana’s policy was largely an effort to apply
Dr. Kwame Nkrumah's Pan-African ideology to inter national politics. Fortunately, for the historian and for the political scientist, Nkrumah has been a pro lific writer. This chapter draws heavily from his writings, virtually all of which have been aimed at creating a consistent, coherent, and theoretical
African Ideology which can guide Africans through world affairs with pride and dignity.
Therefore, the task at hand is to present Ghana's policy as Nkrumah saw it while serving as leader of his country. The first part of the chapter concerns the events which influenced Nkrumah's thinking; the second part dwells on Ghana's objectives in world affairs; while the latter part with Ghana's economic, trade and investment policy. It must be recognized that Ghana's 78
foreign policy, as expressed by Nkrumah, was basically more consistent than the policy of the United States due to its ideological content. Further, domestic policy was
firmly intertwined with foreign policy. Therefore, some
aspects of Ghana's domestic policy is presented here.
I. FACTORS WHICH INFLUENCED NKRUMAH'S
IDEOLOGY
Nkrumah * s academic background in the U.S., Before
formulating his pan-African ideology, Kwame Nkrumah had obtained a broad and diverse cosmopolitan eduction. Not only was he widely read in the academic fields of history, philosophy, religion, government, economics, and politics, but he had also travelled widely. Nkrumah received his college training at Lincoln University in Pennsylvania during the 1930's and later studied at the University of
Pennsylvania where he obtained two graduate degrees.
During his student days in the United States, he had an opportunity to experience depression days in Harlem, as well as the full impact of racial discrimination.^
Kwame Nkrumah, Ghana; The Autobiographv of Kwame Nkrumah. (New York: Thomas Nelson & Sons, 1957), pp. 44-45. 79
Nkrumah * s activist days in London. After the war
years Nkrumah went to London where he met and worked with
many young African students who are today prominent leaders
of their respective countries. These students formed a
West African Student's Union whose goal was the liberation
of Britain's colonies in Africa. In 1945 this group spon
sored the Fifth Pan-African Congress in London where stands
were taken against colonialism, imperialism, capitalism, 2 and racial discrimination. Although Nkrumah was active in
the permanent secretariat which was set up as a result of 3 the conference, he was not content to associate himself
only with British West African students. He also met with
French West African students in London and Paris in an
effort to promote a Union of West African Socialist 4 Republics.
2 Ibid.. pp. 52-54, 3 Ibid.. pp. 55-56. 4 Ibid., p. 58. 80
In these early and formative years, Nkrumah showed promise both as a leader and as a scholar. Clearly, these days had a significant impact on his ideology. Experiencing discrimination in the United States, and the post-War coal shortage in Great Britain, he most certainly must have wondered whether the colonialist-capitalist system was the best of all possible worlds. At any rate, his search for an identity and an ideology with which to lead Africa to freedom would not be ended in the writings of Adam Smith.
To balance his thinking, Nkrumah put down his earlier readings by the Western liberal writers, and took up Hegel,
Marx, Engels, Lenin, Mazzini, and Gandhi.^
Nkrumah*s return to the Gold Coast - agitation for independence. In 1947 his student days came to an end.
As a result of his activities in London, his reputation as a leader had been noted at home. Thus, the intellectuals of the Gold Coast summoned him home to be General-Secretary of the United Gold Coast Convention (U.G.C.C.) party.® For
^Ibid., pp. 44-45 6 Ghana, Information Services, Ghana is Born. 6th March, 1957. (Accra: Government Printer, 1958) pp. 24-26. 81 the next ten years, Nkrumah put down the crusade for pan-
African freedom and unity and concentrated on establishing a firm political base with which to lead the Gold Cast to independence.
Formation of the convention people * s party. About a year after joining the U.G.C.C., he was imprisoned by the
British for political agitation. Shortly after his re lease, he broke with the U.G.C.C. and formed his own
Convention People's Party (C.P.P.). He had found the other 7 party too intellectualized and too lacking in mass support.
% The drive to independence. Meanwhile, the British set up several commissions to study the possibilities of self- government for the Gold Coast. As a result of their recommendations, an election was held in 1951. The C.P.P. won by an overwhelming majority; Nkrumah was released from his second prison term; and he was made Leader of Govern- 8 ment Business (later Prime Minister). Again, in the 1954 election Nkrumah*s party won a majority of the seats in the 9 Assembly.
7 Nkrumah, og. cit.. pp. 100-101. 8 Ghana is Born, op. cit.. p. 24. %hana. Ministry of information, Ghana Republic Souvenir, (Accra: Government Printer, 1962), p. 8. 82
By 1956, Her Majesty's Governne nt had decided that it would grant the Gold Coast independence if that was the wish of its people. A.plebiscite was held to that effect in July. As a result of this plebiscite, the people chose: (a) to reinstate the C.P.P.; (b) to request that the Gold Coast be given its independence under a unitary form of government; and (c) to integrate Britain's Trust
Territory of Togoland into a new independent Ghana.
II. GHANA'S FOREIGN POLICY
As of March 6, 1957, Ghana could pursue an independ ent foreign policy. Two days later she was accepted as a member of the united Nations.
1957-1960. The years 1957 to 1961 marked a foreign policy of caution for Ghana. This was a period of domestic consolidation for the regime. However, Nkrumah was quite vocal in promoting independence for the other black African colonies.
^^Ghana is Born, p. 23. 83
Eventa of 1960. Three main events in 1960 stimu lated Ghana's foreign policy. They were Ghana's transition to a Republic, the Congo Crisis (which will be discussed in
Chapter Four), and independence for numerous African territories.
Republican constitution. Under a constitutional monarchy, Ghanaian leaders felt too restrained to assert 11 an independent foreign policy. Thus, the leaders decided to take this issue to the people. As a result of a ]^hebi- scite, permission from the Queen was granted to set up a
Constituent Assembly under which Ghana would become a
Republic. Further, this plebiscite served to elect a new
President. The victor, once again, was Kwame Nkrumah.
The new Constitution provided for a President, a uni-cameral Assembly, and an independent Judiciary. How ever, the Constitution had one weakness. It allowed itself 12 to be amended by referendum. Such référendums were later used to amend the Constitution ^ infinitum, and to est-
^^Ghana Republic Souvenir, op. cit., p. 8. 12 Ghana Republic Souvenir, op. cit., pp. 10-13. 84
abiish the absolute authority of the Convention People's
Party.
In line with Nkrumah*s goal of a United Africa, the
Constitution contained a unique feature. Article Two would
allow Ghana to surrender its sovereignty, in whole or in part, "in the interests of a union of African states and territories, as soon as ever such a union becomes practi cable."^^
Independence of numerous African states. By 1960, when many other black African states received their in dependence, Nkrumah had developed a coherent and consist ent ideology, which was later referred to by C.P.P. officials as Nkrumaism. Nkrumaism was a policy of pan-
Africanism, but even more so, it was an ideology of a developing nation. According to Professor Paul Sigmund,
Jr., such an ideology is a "group of beliefs that give expression to common feeling about the past, present.
13 Ibid., p. 14; See also, "Ghana Would Yield Sovereignty to Union," Washington Post, January 8, 1960. 85
and future.Clearly, Nkrumaism was such an ideology even
if Nkrumaism in practice (as we shall see in Chapter Four)
varied from Nkrumaism in theory.
Ghana's foreign policv as an effort to implement
Nkrumah's ideology. The content of Nkrumah's ideology was
A FORmula for the political, social, and economic advance ment of Africa, as well as a guide for Africa's conduct in world affairs. The negative elements of his ideology were
clearly rooted in the colonial experience, while the
positive d.ements represented a synthesis of the best
features of the political-economic systems of the East and
West as adapted to the needs and experiences of Africans.
The three foreign policy goals of Nkrumaism.
Nkrumaism was designed to be a guide for domestic Ghanaian
politics. Nkrumaism also served aptly as a guide for Ghana's
foreign policy. The three elements which formed Ghana's
foreign policy were: antipathy to colonialism and support
for the total independence of all African territories; the
14 Paul E. Sigmund, Jr., ed.. The Ideologies of the Developing Nations. (New York: Praeger, 1963), p. 4. 86 maintenance of world peace through a policy of positive
neutrality and non-alignment y and, finally, the promotion
of 'African unity.These three aims were interrelated
and interacting.
Antipathy to colonialism and African independence.
The first task of Ghana's foreign policy was to see that
all of Africa was freed from the colonial yoke. According
to Nkrumah, the Gold Coast suffered under a colonial ad ministration that represented the injustice and irration
ality of imperialism. Colonialism, to him, seemed to be
totally incompatible with a higher moral law.
Dr. Nkrumah viewed independent Ghana as the Redeemer
of Africa. "We in Ghana regard our independence as mean
ingless unless it is closely linked with the total
liberation of Africa. As a corollary, "the ideology of my Party may be formulated as follows: no race, no people.
15 Kwame Nkrumah, Africa Must Unite! (London: Heinemann, 1963), p. 199. 16 Kwame Nkrumah, Africa Must Be Free!, A message delivered on African Freedom Day,APril 15, 1961. (Accra: Government Printer, 1961), p. 1. 87
no nation can exist freely and be respected at home and 17 abroad without political freedom." Thus,NKrumaism re
jected racism, while it promoted African nationialism.
IKrumah's regime was totally dedicated and committed to
freedom throughout the continent of Africa. Nkrumah
stated:
We have dedicated ourselves to the attainment of total African freedom. Here is one bond of unity that allies free Africa with unfree Africa, as well as those independent states dedicated to this cause. My party, the Convention People's Party, fervently upholds, as an unquestionable right, the burning aspirations of the still sub jected peoples of our continent for freedom. Since our inception, we have raised as a cardinal policy, the total emancipation of Africa from colonialism in all its forms. To this we have added the objective of the political union of African states as the securest safeguard of our hard-won freedom and the soundest foundation for our individual, no less than our common economic, social and cultural advancement.^®
Further, Nkrumah warned that without the total liberation of
Africa's dependent peoples: the continent would be a
^^Nkrumah, Ghana, The autobioqraphv of Kwame Nkrumah. OP. cit.. pp. xv-xvi. 18 Nkrumah, Africa Must Unite!, o£. cit.. p. xi. 88 continual threat to world peace:
World peace is not possible without the complete liquidation of colonialism and the total liber ation of peoples everywhere. The indivisibility of peace is staked upon the indivisibility of freedom. And this indivisibility extends to minorities within independent states who are segregated from the t»ody politic. Wherever there is the possibility of conflict arising out of discriminations and the refusal of human rights, the peace of the world is threat ened.^^
The evils of colonialism, past and present, gave rise to Ghana's hostility toward the Western nations.
The Party believed that "the original object of imperi alism and colonialism was to secure cheap sources of raw materials and to create markets for the manufactured pro- 20 ducts of the imperialist power." The present weakness of
African states is a direct result of nineteenth century colonialism. When the colonial powers divided up Africa, the boundaries cut across ethnic and tribal lines. This
^^Ibid.. pp. 203-204. 20 Ghana, Ministry of Information and Broadcasting, Draft: Programme of the Convention People * s Party for Work and Hapiness. (Accra: Government Printer, 1962), p. 9. 89 was an unnatural situation which Nkrumah referred to as the
"balkanization" of Africa for the maintenance of disunity by "divide and rule" tactics.
Thus, Thana has had a phobia against the ex-colonial powers, including the U.S., which is believed to be the
arch-enemy of anti-imperialism since it is the greatest capitalist power and supports the colonial and ex-colonial powers through NATO. Nkrumah reminded the National Assembly that "in the global chess game of international politics... we must never forget that one of the objectives is the perpetuation of colonialism or imperialism, either in its 21 old guise or in a new form."
In 1965, Nkrumah published a book warning Africa against the new form of colonialism: neo-colonialism.
Here, he expanded Lenin's theory that imperialism was the last stage of capitalism. To Nkrumah, neo-colonialism is the last stage of imperialism.
The neo-colonialism of today represents imperialism in its final and perhaps its most dangerous stage. In the past it was possible to convert a country upon with a neo-colonial regime had been imposed, - Egypt in the 19th century is an example - into a colonial territory. Today this process is no longer feasible. Old-fash-
21 Kwame Nkrumah, The Road Ahead. (Accra: Government Rrinter-Binistry of Information-, 1961), p.l. 90
ioned colonialism is by no means entirely abolished. It still constitues an African problem, but it is everywhere on the retreat. Once a territory has become nominally indep endent it is no longer possible, as it was in the last century, to reverse the process. Existing colonies may linger on, but no new colonies will be created. In place of colonialism as the main instrument of im perialism, we have today neo-colonialism.
The essence of neo-colonialism is that the State which is subject to it is, in theory, independent and has all the outward trappings, of international sovereignty. In reality its economic system and thus its political policy is directed from the outside.
Nkrumah warned the newly independent states that there are many means to achieve neo-colonialism. Upon independence, the mother country supports a multi-party system which breeds disunity among the leaders. Then, it entrusts a sympathetic majority with the government.
Thirdly, it gives power to the tribal chiefs who tend to decentralize the government. Fourthly, it fails to est ablish communication lines among the colonies and leaves
22 Kwame Nkrumah, Neo-Colonialism; The Last Stage of Imperialism. (New York: International Publishers, 1965), p. ix. 91 the new nation without an adequate civil service. Fifthly, it tempts the infant nation with economic unions such as the
European Common Market. Finally, it supports "selfish politicians who have a vested interest in maintaining the individuality of their countries as against the political unity of Africa." This is a modern form of indirect rule which Nkrumah called "teleguide diplomacy," Neo-colonial- 23 ism thrives on such control.
Non-alignment and positive neutrality in world affairs.
The second major element of Nkrumaist ideology was a policy of non-alignment in world affairs. Nkrumah believed that if weak Africal nations allowed themselves to be closely aligned - politically, economically, and militarily - 24 they might ultimately be dragged into a nuclear war.
Non-alignment in world affairs does not mean mere passive neutrality. Rather, Nkrumaism called for a posi tive policy. Positive neutrality could be beneficial to
African nations for several reasons. First, it would help to consciously alter the relation-patterns inherited from
23 Nkrumah, The Road Ahead.. op. cit.. p. r. 24 Draft: Programme of the C.P.P.. op. ext., pp. 41-42. 92 from colonialism by diversifying a nation's outside con tacts. Second, those countries not aligned with either position of the East-West conflict could then combine to more effectively put forward their own solutions to 25 international problems.
Under the doctrine of positive neutrality, a less developed nation could pursue a very active role in world politics. Ghana tried to set an example in this regard by sending delegations to the United Nations, the Common wealth, various regional African organizations, and numerous 26 conferences of non-aligned nations.
But the ultimate goal of positive neutrality was broader in scope than mere concern with African problems.
Ultimately, positive neutrality stood for disarmament and world peace. Nkrumah felt that if nations could disarm and convert defense spending into foreign aid, the gap
25 Ibid. 26 Nkrumah, Africa Must Unite! op. cit., pp. 185, 194; for more details about Ghana's participation in the Un., see "Ghana and the United Nations," New Ghana (Accra), Vol. VII, No. 1, October 10, 1962, p. 10. 93 between the rich and the poor nations would decrease, the
have-not nations would become more prosperous, and the
living standards of mankind would be raised.
A union African jaiâJütt* ^he critical factor in
pursuing this goal is the need for several non-aligned
nations to combine in order that they be a powerful force
to be reckoned with. Nkrumah recognized that positive
neutrality would have only limited effectiveness if pur
sued individually by many small and fragmented states.
He believed that the most realistic basis for such a
combined effort was a geographic one. Realizing the
power held by large continental nations with enormous
populations, and vast natural resources organized in
federal unions, it was Nkrumah*s dream to build a pan-
African political and economic union. Geography would not be the sole basis for such a union. Africa also shared a
legacy of colonialism. Nkrumah believed that a pan-
African union could serve as a non-nuclear third force as well as a positive force for world peace.
Nkrumah then proposed three objectives which a
united Africa should pursue in order to fulfill its
promise: 94
In my view, an united Africa — that is, the political and economic unification of the African continent should seek three objectives:
Firstly, we should have overall economic plan ning on a united continental basis which would increase the industrial and economic power of Africa. So long as we remain disunited, so long as we remain balkanized, regionally or territorially, we shall be at the mercy of colonialism and imperialism.
Secondly, we should aim at the creation of a Joint Military Command. I do not see any wisdom in our present separate efforts to build up or maintain vast military forces for self-defense which, in any case, would be ineffective in any major conflict...If we do not unite and combine our military forces for common defense, the individual states, out of a sense of insecurity, may be drawn into making defense pacts which will endanger the security of us all. There is also the ex penditure aspect of this problem. The maintenance of military forces imposes a heavy burden on even the most wmlthy States, who need every penny they can get for develop ment, it is ridiculous — indeed, suicidal, — for each State, individually, to assume such a heavy burden when the wieght of this burden could be easily lightened by sharing it among themselves.
The third objective which we should have in Africa comes from the first two which I have just described. If we in Africa set up a common economic planning organization and a joint military command, it follows that we shall have to adopt a common foreign policy to give political direction to our national continental economic and industrial develop ment planning.
In the higher reaches of our endeavor, it should be possible to devise some constitut- 95
ional structure which secures these object ives and yet preserves the sovereignty of each country joining the Union.
It is most important that African leaders must now begin to find the best and quickest means by which we can pool our economic resources together for our mutual benefit. If we can achieve this, we shall raise in Africa a great industrial, economic, and financial power com parable to anything the world has seen in our time.
It must be said, however, that we cannot est ablish, such sound economic links in Africa without giving them sound political direction, force, and purpose. We must, therefore, come to grips with the major and basic issue of African unity which alone will make the art- ifical boundaries and regional demarcations inherited from colonialism obsolete and super- flous.
In my own view, local associations, regional commonwealths and territorial groupings will be just another form of Balkanization unless they sure conceived within the framework of a large union based on the model of the United States of America or the Union of Soviet Socialist Republics.
Once this (Union) is achieved...the picture of the restoration of Africa's dignity and greatness would be complete. This should be our aim and goal, this must be our task... the political union of Africa would not only be a strong guarantee for peace, but also a great instrument for world economic prosperity. '
27 Kwame Nkrumah, "Towards a United Africa, " Voice of Africa (Accra) Vol. 2, No. 3, March, 1962, pp. 20-21. 96
Following this theme, a high party official added:
In preaching and practising the unity of African states, Ghana is motivated not by any eunbition for political hegemony in Africa but by a genuine, burning desire to bring to the realization of Africans the intrinsic worth and appeal of a union which can successfully resist the onslaught of foxy imperialistic domination, direct or indirect, in any field of national activity, and to bring about the voluntary formation of a United States of Africa. As evidence of the self less role Ghana is playing, there is a provision in our Constitution which enables her, if necessary, to surrender in whole or in part her sovereignty to facilitate the achievement of a Union of African States.^®
Ghana's foreign economic policy. Ghana's attitudes toward foreign aid, foreign trade, and private foreign investment were derived from its overall foreign policy, as well as its domestic economic policy.
Policv towards foreign aid. Foreign aid was welcome as long as there were no strings attached; that is, as long as this aid was not designed to establish neo-colonialism.
Nevertheless, Nkrumah realized that bilateral aid would always have some motive behind it. What limited the effectiveness of neo-colonialist-motivated bilateral aid
2B H.E.Nana Kena II, "United States of Africa," Voice of Africa (Accra), Vol. 2, No. 3, March, 1962, p.8. 97 was the rivalry between the two power blocs. Multilateral
aid was recognized as being the most desirable, but it would not be available in great quantities due to
opposition to it from vested interests in the neo-colon-
ialist-minded states. What less developed nations could 29 expect in great quantity was military aid.
Policv toward foreign trade. As for foreign trade,
Ghana's policy called for freedom to trade with nations
of any political or economic persuasion:
For Ghana to be prosperous she must be able to trade with any country in the world capable of supplying her needs. She cannot do this if she aligns herself with non-African trade blocs such as the European Common Msurket designed to further the interests of the advanced capitalist countries at the expense of the newly developed countries.®®
29 Nkrumah, Neo-Colonialism, op. cit.. pp. xiv-xvi.
^^Draft: Programme of the C.P.P., op. cit., pp. 41- 42. 98
Policv towards private foreign investment. Ghana's policy towards private foreign investment is rooted in its foreign policy against colonialism, as well as its domestic policy of rapid industrial achievement. Susceptability of the various African states to neo-colonial ism is due to economic weakness. Many African elites believe that their countries must industrialize rapidly in order to survive as political entities. According to Nkrumah, industrial ization can only take place through state-direction. "What other countries have taken three hundred years to achieve, a once dependent territory must try to accomplish in a 31 generation if it is to survive."
African socialism. After witnessing the rise of the
USSR to a great industrial power in forty years, Nkrumah decided to apply Marxian socialism to the African context in his own brand of "African Socialism." He summed up
Ghana's economic policy in 1960:
I have stated on many occasions that the Government's policy is aimed at evolving a socialist pattern of society; no secret has been made of that fact. I have also stated that there are different paths to socialism.
31 Nkrumah, Ghana, op. cit., p. xvi. 99
that each country must find its own way, and that socialism could differ in form from one country to another. Ghana intends to evolve its own socialist pattern of society adapted to its own particular needs.
The role of the private sector in Ghana * s economy.
African socialism does not preclude, however, a private sector of the economy. Foreign private investment was encouraged as long as it worked as a positive force for the advancement of the developing nation. Kofi, Baako, one-time Minister of State for Parliamentary Affairs, ex* plained how private investment could serve the state:
In most cases, a large proportion of the turnover of an industrial company remains in Ghana in fhe form of wages and salaries to employees. These wages and salaries in turn attract taxation and also purchas ing power, which encourage further enter prises. In good ccxnpanies, of which there are many, a share of the profits is plowed back into the company for development of its enterprises. This is, in fact, further in vestment. If there are fears of permanent foreign domination in the commercial and in dustrial field of our economy, these fears should be immediately and permanently abandoned. The government has already taken adewuate measures by limiting the tenure of leases and concessions and by clearing fore ign elements from the ownership of the land. It must be borne in mind, however, that the duration of leases and concessions must be
32 Kwame Nkrumah, statement on Ghana * s Economic Policy. (Accra: Ministry of Information, 1960), p. 2. 100 balanced against the encouragement of over seas capital in such a way as to guarantee a reasonable return for the investment. In spite of this, however, we are called upon by the same Nkrumaist philosophy to be watch ful and vigilant so that private investors who primarily think of their profits may not adopt subtle tricks to further their capital ist aims of exploitation.
Indeed, it must be stated that the Nkrumaist prefers loan capital to investment capital. The difference... is clear. Loan capital allows the receiver of the loan — say, the government — to use its loan to set up any state enterprises within the framework of its socioeconomic plan. In the case of in vestment capital, the investor sets up his business in the country and tries, by any means that may suit his profit-making mission, to achieve his aims. For instance, in the absence of effective import-control and price-control systems, the private in vestor may be able to further his capitalist aims by fixing prices of commodities far above the average means of the consumer.
This state of affairs may lead to wage and salary increases that may affect, in the long-run, the smooth implementation of the over-all development plan of the country. In the view of the Nkrumaist, therefore, some effective measures are necessary to arrest any tendency toward exploitation and inflationary consequences, and all the while the ideal of total ownership of the means of production and distribution should be pursued by continually and energetically strengthening the public sector of the economy. Also, we must continue to encourage 101
33 responsible co-operatives in the country.
Thus, "African socialism" meant a "mixed economy."
In Ghana, there were to be five sectors in the economy:
(a) State enterprises; (b) enterprises owned by foreign private interests; (c) enterprises jointly owned by
State and foreign private interests; (d) co-operatles; 34 and (e) small-scale Ghanaian private enterprises.
The need for a. pan-African union in which Africa can realize its full potential. In the end Nkrumah re cognized that, economically, the small and weak African states could not stand alone. At present they were totally susceptible to the whims of the world's commodity markets. "Unless small states can combine they must be compelled to sell their primary products at prices dic tated by the developed nations and buy their manufactured 35 goods at the price fixed by them." Therefore, Africa could only realize its economic potential by combining
33 Kofi Baako, "Nkrumaism - Its Theory and Practice," in Paul E. Sigmund, Jr., ed., The Ideologies of the Develop ing Nations,(New York: Praeger, 1963) pp. 192-193. 34 Nkrumah, Africa Must Unite!. Op . cit.. p. 121. 35 Nkrumah, Neo-Colonialism, op. cit.. pp. xiii-xiv. 102 in a great political and economic union:
The larger potentials of greater land area and numbers would offer greater attraction to out side investment capital because of their anticipated higher profitability ratio. Another advantage for outside investment capital would be the soundness,the guarantees that unified continental development could offer. No single individual could undertake such investment, so that it would have to be done by corporate or public investment. In fact, the trend today is towards public investment, because public guaurantees are demanded. Foreign countries will not loan to a private individual in another country but will lend only to a private instit ution or a public institution with a guarantee from the government. As a rule, it will not come without this guarantee, and often enough the investment will not be allowed to ccxne to the borrowing county without the approval of the government of the lender. That kind of investment is the more solid kind of investment that Africa needs from abroad, and both inter national and public capital would find it much less complex to deal with and secure guarantees from an all-African administration than from the several governments they now have to deal with. It would.make for easier co-operation all around.
36 Nkrumah, Africa Must Unite!. o p . cit.. p. 169. CHAPTER IV
U.S.-GHANAIAN RELATIONS: 1957-1967
The purpose of this Chapter is to analyze U.S.-
Chanaian relations for the period 1957-1967. Basically, it is the complement to Chapters Two and Three. Whereas those chapters are designed to present the public policy and the theoretical underpinnings of that policy, this chapter is designed to show how that policy appears in practice.
In analysing U.S.-Ghanaian relations over this period of time, the author has looked for points of common concern to both countries. The most salient features, in the author's view, has been the mutual in terests in the giving and receiving of foreign aid generally, and in the financing of the Volta River Pro ject specifically.
As we have seen in the previous chapters, both countries espoused the desire that foreign aid be given
'I with "no strings attached." Idealistic Americans prefer to think that their foreign aid is given without "strings."
However, this author is more of a realist. He believes there is always some motive or motives involved in foreign aid 104 and private foreign investment, because such efforts are basically a transfer of wealth. For business there is always the profit motive; for government, there are always mumanitarian, economic, political, military, or prestige reasons for the transfer of wealth from one country to another.
In the case of U.S. aid to Ghana, the motivations seemed to be heavily based towards the political. In some cases aid was given to Ghana to keep Nkrumah from
"going Communist." In other cases aid was withheld be cause of Nkrumah*s stand on various issues in world affairs. In the end political considerations seemed to be the dominant (although not the only) motivation in giving Ghana foreign assistance. An appropriate title for this chapter then, is the "politics of foreign assistance.”
The first part of this chapter covers the period from 1957 to 1962 during which time the United States government made a commitment to the Volta River Project and followed through on it. An analysis is made of the motivations behind the commitment and a description is given of the strong negotiations behind the scenes. 105
The second section of the chapter covers the period
1962-1966 when U. S.-Ghanaian relations deteriorated to the breaking point. Here, it must be kept in mind that the
U.S. did not necessarily wish to cause Ghana to default on the loans and/or nationalize the Tema Smelter. Finally, the last part of the chapter coverss the period after Nkrumah *s overthrow where U.S.-Ghanian relations improved, and the new regime was rewarded by the West with favorable economic policies.
Early U.S. aid commitments. Shortly after the United
States established diplomatic relations with the newly in dependent nation of Ghana in 1957, a Technical Cooperation agreement was signed by them (June, 1957). The following year a United States Operations Mission was established.
The first activity was a land planning and soil conservation project in the Northern Region. Subsequent projects were of a technical assistance nature and con centrated on the agricultural sector. These projects included the development of a country-wide agricultural extension service, crop diversification, cooperatives, rural community development, livestock improvement, the establishment of lArmers' Institutes to train young farmers, and the survey of the agricultural potential of various 106 areas of Ghana.^ Yearly appropriations from the U.S.
Congress for technical assistance to Ghana have consis tently averaged about $1.5 million; not an exhorbitant sum.
In the industrial sector, the U.S. government gave
Ghana no technical assistance, but relied on the ability of private enterprise to transfer capital and technology.
The sole exception, of course, was the Volta River Project.
For this scheme, it was necessary for a large industrial power to provide the requisite capital assistance to
Ghana's public sector for the development of the necessary infrastructure: namely, a hydro-electric dam and power plant.
U.S. interest in Volta project as ^ result of
Gbedemah's embarrassment. The Volta River Project was brought to the attention of high U.S. officials in a very fateful manner. While Ghana's Finance Minister, Komia
Gbdemah, was in the United States seeking financing
1 U.S., Department of State, International Cooper ation Administration, Ghana. Press Release, April, 1961. 107
support for the Project, he was asked to make several
speaking engagements. On October 7, 1957, on his way
from New York to Maryland State College, Gbedemah was refused service at a Howard Johnson restaurant outside of Dover, Delaware on U.S. Route 40 because he was a
Negro. The press picked this item up and an international
incident was created. President Eisenhower was particu
larly concerned about the embarassment of a high official
from a newly independent hbck African state only one month
after the Little Rock school desegration crisis. The re
sult was that Gbedemah received an invitation to the
White House for breakfast with Eisenhower and Vice-President
Richard Nixon. Here, Eisenhower heard of the Volta Project
for the first time and promised that the possibilities of 2 U.S. participation would be investigated.
Nkrumah 1958 visit to U. S.A. In July, 1958,
Nkrumah made a state visit to the U.S. During Nkrumah's meeting with Edgar Kaiser and Chad Calhoun in New York,
^Vernon McKay, Africa in World Affairs. (New York: Harper and Row, 1963), p. 405. 108 it was noted that President Eisenhower and one of his assistants, Christian A. Herter, were also in the Waldorf
Astoria Hotel. Arrangements were made for all these leaders to meet. Nkrumah later described the encounters
It so happened that PresidentEisenhower was staying at the Waldorf at the saune time, so Edgar, in the way he has of getting down to things, suggested that we see the President straightaway. When Eisenhower heard what I had to say, he turned to one of his officials and said that he understood that the matter had already been taken care of. When he was informed to the contrary, he ordered: "Then why don't you get on with the damned thing."
"Yes, sir," 1 cried enthusiastically.^
Nkrumah also discussed the Five Year Plan and Eisenhower committed the U.S. to consideration of technical and development assistance towards it.
During the next year, the Department of State and the International Cooperation Administration investigated the Project, details of the investigation have been pre sented in Chapter One.
3 Kwame Nkrumah, I Speak of Freedom (New York: Praeger, 1961), p. 46. 109
Bases for Eisenhower * s decision to investigate the
Project. Thus, Nkrumah*s conversations with Eisenhower were fruitful. He had stressed the importance of the Dam to Ghana and had formally requested U.S. help. However, this placed Eisenhower, not intentionally on Nkrumah's paurt, in a very difficult position. At that time the aluminum companies in the U.S. had asked the administ ration to relieve their surplus through a stockpiling program. But on the other side of the ledger. President
Eisenhower realized the political significance of Nkrumah*s request. First, the U.S. would have to play a vital role
in newly emerging Africa. A rebuff to the first of the new black African states would have detrimental long-range consequences for U.S. policies in Africa. Second, there were the considerations that surrounded United States' 4 withdrawal from the Aswan Dam project.
Aswan dam. As the Volta Project was to Nkrumah, so was the Aswan Dam project to Nasser of Egypt. For both men they were essential prestige and development projects.
By 1955 the Soviet Union had come more and more to
4 Ibid. 110 support the Arab cause in the Arab-Israeli dispute. Late that year, an agreement was concluded whereby the Soviets traded arms for Egyptian cotton. Increasingly, Nasser showed a propensity for a neutralism that would play the
Americans off against the Soviets and vice-versa. Then came rumors that the Soviets were showing an interest in the Aswan High Dam. This dam, on the Nile River, was to cost $1.3 billion and take 13 years to complete. In
December, 1955, a tentative agreement was reached among
Egypt, the International Bank for Reconstruction and
Development and Britain, as the Western response to in creasing Soviet influence with Nasser. Egypt would put up $900 million, the I.B.R.D. would lend $200 million, and Britain and the U.S. would supply the rest.
Howerver, in 1956, the necessary authorization for U.S. participation in the Aswan Dam ran into trouble in the U.S. Congress and then in the Administration. In censed at Nasser's attempts to play off the Soviets against the West by spreading rumors that the USSR would perhaps give Egypt better terms on a loan. Secretary of State
Dulles decided to rebuff Nasser by withdrawing U. S. parti cipation. A note to this effect was delivered on July 19, 111
6 1936, listing several economic reasons for U.S. withdrawal.
Unfortunately, the rebuff backfired. First of all, it gave Nasser added cause to expropriate the Suez Canal.
Second, it did not serve to topple the Nasser regime.
Finally, Soviet aid and technicians rushed in to replace the Americans, thereby, strengthening the Soviet position in the Middle East.^ Thus, Eisenhower did not wish,to see a repeat performance only two years later. Further on in this Chapter, we shall see that Eisenhower's fears of the
Soviets filling in the vacuum were not unjustified. The spectre of the Aswan Dam fiasco would also haunt President
Kennedy.
From 1938 to 1960 no further commitments were made to Ghana's Volta Project. Kaiser engineers reassessed the
Project and Edgar Kaiser sought to form a consortium with other aluminum companies. In the meantime, in the spirit of African Unity, Nkrumah had signed an agreement with.
6 Charles L. Robertson, International Politics Since World War II. (New York: Wiley, 1966), pp. 210-213, 226-227 7 McKay, op. cit.. p. 371. 112
Marxist-oriented, Sekou Toure* sealing the Ghana-Guinea 8 Union.
Nkrumah * s radical policies worry U. S. leaders.
During these two years, American foreign policy makers were following closely the situation within Ghana as well
as its foreign policy. Many observers were disturbed by
Ghana's Preventative Detention Act of 1958, which Nkrumah
subsequently used to systematically jail his opposition.
Another policy which bothered Americans was Nkrumah ' s
espousal of a socialist economy. At one point the Ameri
can press reported that Nkrumah was about to expropriate 9 all private enterprise, foreign and domestic. In the
foreign policy realm, it was noticed that Nkrumah became
increasingly identified with North African radicals such as Nasser of the U.A.R. and Algeria's FLN leaders.
Then came the event which caused the first major breach in U.S.-Ghanaian relations: the breakdown of the
8 Colin Legum, Pan-Africanism: A Short Political Guide. Rev. ed. (New York: Praeger, 1965), p. 45. 9 "Nationalization in Ghana?" African Report, November, 1960, p. 7. 113
Central Government of the Congo. While Nkrumah and African radicals supported Patrice Lumumba, African moderates and the West threw their support behind President Kasavubu.^^
In response to the Congo Crisis, Nkrumah journeyed to New York, where on September 30, 1960, he addressed the
U.N. General AssenA>ly. In the true spirit of anti-colonial ism, Nkrumah denounced Western policy in the Congo as an
"imperialist intrigue stark and naked," and a clear attempt to set up a "clientele-sovereignty, or false independence" 11 xn the Congo.
Eisenhower administration fails to carry out Volta project. As far as the Eisenhower administration was con cerned, Nkrumah had gone too far. It was clear that we had lost patience with neutralists whom we judged anti-Western in orientation. To us, it appeared that Nkrumah's "positive neutrality" meant neutrality in favor of the Communist bloc.
After hearing Nkrumah's speech. Secretary of State Christian
^^Legum, op. cit.. p. 49.
^^Vernon McKay, Africa in World Politics. (N. Y.: Harper and Row, 1963), p. 345; for text of speech, see K. Nkrumah, I Speak of Freedom. (N.Y.: Praeger, 1961), pp. 262-280. 114
A. Her ter held a press conference in which re remarked that
Nkrumah had "marked himself as very definitely leaning to ward the Soviet bloc." Nkrumah was taken by surprise, claiming that "Mr. Herter was, in fact, the last person from 12 whom X would expect such a remark."
Clearly, the General Assembly speech was a poor political move on Nkrumah*s part when one considers that the vast Volta Dam Project loan was undergoing consideration within the State Department's machinery at that time. Ob viously, Nkrumah spoke with emotion and from his convictions.
It was later revealed that Patrice Lumumba had agreed to bring the Congo into the Ghana-Guinea Union. Thus, when the "imperialists" bakced Lumumba's opponents, Nkrumah saw one of his ambitions blocked by the West. Further, neither
Eisenhower nor Herter received Nkrumah while he was in the
United States. This snub seemed deliberate to Nkrumah in light of his earlier meetings with Eisenhower and Herter.
As a result, the Volta Daun loan received no further action under the Eisenhower Administration which was quickly draw ing to a close.
12 McKay, o p . cit., p. 345. 13 Arthur M. Schlesinger, Jr., A Thousand Davs. (Boston: Hougton-Miff1in, 1965), p. 570. 115
Nkrumah * b policies worry new Kennedy administration.
During late 1960 and 1961, the first year of the Kennedy
Administration, Nkrumah was to irritate the United States repeatedly by a number of policy actions which were juxta posed against Ghana's relations with the United States.
These actions fell into two categories. First, Nkrumah joined with the radical leaders of Africa in the formation of the Casablanca bloc. This group continually took an anti-Western position in world affairs. Second, Nkrumah signed numerous trade and aid agreements with Ccnmnunist bloc nations. These events sparked an open debate among U.S. policy makers over the advisability of granting Ghana the requisite development loans for the Volta River Project.
Increasingly, the U.S. press interpreted Nkrumah'a moves as
"going Communist•“ These actions would tax America's credi bility of Nkrumah's "non-alignment."
First, in early September, 1960, Ghana signed a $45 million contract for the development of the nation's mineral 14 and industrial resources. Then, after his trip to the U.N., he met with another African radical. President Keita, in order
^^Time. Vol. 76, Part 1, Sept. 12, 1960, p. 29. 116
15 to negotiate Mali's entrance into the Ghana-Guinea Union.
In response to a meeting of moderate African states at Brazzaville in December, 1960, the radicals called a conference at Casablanca in January, 1961. This group of states had supported the Lumumba faction in the Congo and consisted of Ghana, Guinea, Mali, Morocco, UAR, Libya, and the Algerian Provisional Government. The Casablanca powers 16 continuelly took an anti-Western stance.
The following month President Tito of Yugoslavia made a state visit to Ghana where he was received with adulation.
The result was a cultural agreement between the two "neutral ists,"^^
One week later Nkrumah took off once again for New
York to speak on the Congo Crisis. At this point the new administration was willing to give Nkrumah a second chance.
The Kennedy Administration, underway for less than
^^Ruth Lawson, International Regional Organizations. (N.Y.; Praeger, 1962), pp. 306-308. 16 Legum, 0 £. cit.. pp. 50-52. 17 Ghana, Ministry of Information, Tito Comes to Ghana. (Accra: Government Printing Department, 1961). 117 two months, had taken a firm interest in APrican affairs. As
Senator, Mr. Kennedy had chaired the Subcommittee on Africa and now had appointed an Assistant Secretary of State for
Africa before appointing Mr. Rusk. Yet, President Kennedy was wary of Nkrumah.
First of all, Ghana's cabinet had embarrassed
President Kennedy's Ambassador to Ghana by convening specifically to decide whether to accept his credentials at the end of January. Then, with the murder of Patrice
Lumumba, well organized anti-american rioting broke out throughbut Ghana. Finally, these events were followed by a fete in Accra for Leonid Brezhnev, the President of the 13 Soviet Union.
Nevertheless, President Kennedy agreed to meet with
Nkrumah at the White House while the Ghanaian President was in the United States. The visit was a success. Both leaders were impressed with each other. Of course, the Volta River project was discussed and Kennedy gave assurances that he would give it due consideration. On the plane back to
18 Schlesinger, o p . cit.. p. 570. 118
New York, Nkrumah composed a warm personal note expressing
his pleasure at the meeting and his hoped for continued
friendship in the future. But once again, Nkrumah showed his lack of political astuteness. Shortly thereafter, he 19 established diplomatic relations with Communist China.
In April and May, Nkrumah formalized even closer
ties with the Communist bloc. First, he signed scientific,
technical, cultural and trade agreements with several
Eastern European nations. Then, in early May, he signed
a new technical aid agreement with the Soviet Union and re- * ceived a shipment of Soviet arms.
Irritating the West even further, Nkrumah decided
to take a two month tour of the Communist world. Leaving
on July 10, he spent two weeks in the Soviet Union, and
then several days apiece in Warsaw, Budapest, East Berlin,
Prague, Belgrade, Bucharest, Sophia, Tirana, Peking, and
Shanghai. In each city joint communiques were issued
identifying Nkrumah with various Communist positions on
19 Ibid., p. 571. * Time. Vol. 77, part 2, May 12, 1961, p. 21. 119 foreign affairs. In fact, his ccxnmunique' with Mao Tse-Tung contained several of the very phrases viich Nkrumah hhd used to thank Kennedy for the White House visit. In Shanghai,
Nkrumah and his aides concluded a Treaty of Friendship, an agreement on economic and technical cooperation, a trade and 20 payments agreement, and a cultural cooperation agreement.
If this trip did not please American policy makers, neither did Nkrumah*s methods of suppressing the strike at
Sekondi-Takoradi which he faced when he returned home in
September. This strike protested the new austerity budget which included compulsory purchase of savings bonds by all 21 wage-earners. (See Chapter 5) .
In thé meantime, Kennedy had written Nkrumah in July that the United States would go ahead with the Volta River
Project. Thus, the tour of the Communist nations was poorly timed because while he was away, Abram Chayes, State
20 Ghana, Ministry of Information and Broadcasting, Osaqyefo in the East. (Accra: Government Printing Depart ment, 1962); see also, the November, 1961, issue of The Partv. C.P.P. Journal No. 11. 21 Blaine Littel, "Big Brother in Ghana," Reporter, November 9, 1961, pp. 37-39. 120
Department Legal Advisor, had brought the Volta Project
agreement to the point of signature. But Nkrumah*s open
amity with so many Communists brought the project into
serious question. Consequently, Kennedy balked and on
September 21 the State Department announced that it would
hold up final signature of the Volta agreements which were 22 scheduled to be signed October 13.
Nkrumah, however, not being edale to see the hand writing on the wall, had made one more politically unwise move. He had attended the Conference of Heads of State or
Government of Non-Aligned Countries in Belgrade from Sept ember 1-6, before returning home from the East, where the 23 delegates clearly assumed an antx-NATO posture.
Analysis of Kennedy * s decision for U.S. participation
in the project. Nevertheless, the loan for the Volta River
Project did go through shortly after. We must therefore, at
IhLs point, examine the various personal and political in-
22 Schlesinger, op. cit., p. 572. 23 Ghana, Ministry of Information and Broadcasting, Appeal for World Peace. (Accra: Government Printing De partment, 1962). 121 fluences working in favor of the Volta River Project.
Barbara Ward and Sir Robert Jackson. One of the major factors involved in the completion of the Volta
River scheme was the influence of the famous husband and wife team of Barbara Ward and Robert Jackson. Both are known experts on economic development: Barbara Ward on the academic side. Sir Robert on the Administrative side.
Barbara Ward had been friendly with the Kennedy clan for many years and had won the respect of the young Pres ident at an early date. Her husband was dedicated to the successful completion of the Volta River Project, as he had been active in its formulation for over 10 years. Both of them wished to see the project underway as early as possible.
Thus, Ghana had a built-in line to the President's
"ear" as far as the Volta Dam was concerned. In the begin ning of 1961 Chad Calhoun of Kaiser Industries asked Lady
Jackson to raise the matter of the Volta Dam with Kennedy.
Being devoted to the economic and political development of
Ghana, she responded at once. President Kennedy's own con victions favored going ahead with the Project, and Lady
Jackson's counsel strengthened them. She urged the Pres- 122 ident to meet with Nkrumah during his trip to the U. N., describing him as tempermental, mercurial, and caught in the shifting sands of the cold war. But, she argued, if he could be kept neutral, the venture would be worth the risk, and it could conceivably end in triumph. In the ensuing months she intervened several times on behalf of 24 Ghana.
Edgar Kaiser and Chad Calhoun. As we have seen, these two men had, by 1961, gained the trust and respect of Kwame Nkrumah. Likewise, they had faith in the Volta
River Project both from a business standpoint and as a positive contribution towards Ghana's economic develop ment.
President Kennedy respected Edgar Kaiser as an aggressive and intelligent businessman. To help make his decision, the President sent Kaiser and Calhoun to Ghana in October for a firm talk with Nkrumah. Upon their re turn they announced that they had received assurances from
Ghana's President that he would stay true to a policy of 25 neutrality.
24 Schlesinger, o p . cit.. pp. 571, 573. 25 bid., p. 572. 123
In the meantime, Chad Calhoun also had testified on May 11 before the Submommittee on Africa of the House of Representatives' Committee on Foreign Affairs. There, he made the following statement:
I am convinced that Ghana wants and needs strong economic, political, and social ties with the West, ties that will free Ghana from the need to depend on the Soviet bloc, and enable it to achive a truly neutral and independent status. The Volta project ^^11 be an important step in this direction.
He warned that:
If we do nothing in Ghana and the rest of Africa because of concern about the business and political risks of doing something con structive, we may be risking the greater calamity of watching the African nations drift one by one into the Soviet camp. The American Government and American Industry, working as partners, can do much to prevent this catastrophe. In our opinion, the Volta project is a good place to begin.'
There have been seme critical reports in the American press regarding the Government of Ghana. Without attempting to defend every act or action of that Government, or any other African government, I maintain we must be tolerant and we must not measure all they do or don't do in terms of our own experience.
26 U.S. Congress, House of Representatives, Committee on Foreign Affairs, Subcommittee on Africa. Activities of Private United States Organizations in Africa. Hearings... May 8-June 1, 1961. 87th Cong., 1st. sess., (Washington: Governm ant Printing Office, 1961), p. 63. 27 Ibid.. p. 64. 124
The legacy of the Aswan dam. In 1961, the legacy of the Aswan Dam fiasco was of concern again to an American
President. It appeared that the Soviets were seriously interested in participating in the Volta River Project. In late 1959, the Soviets bid on the construction of the Bui
Gorge Dam (proposed by the Kaiser Reassessment Report) . It was not taken up, however, for fear of the loss of U.S., 20 Kaiser, and World Bank participation in the main Project.
Later, in September, 1961, Nkrumah signed a contract with the
U.S.S.R. under which the latter would engineer and contruct a dam and power station at Bui utilizing part of a LI4 million long-term Soviet loan. However, Bui's power was not needed for another decade, work was done on the site, and 29 its present status is unknown.
To Kennedy, it appeared that the Soviets would move into the Volta Project, like they did in the case of the
Aswan Dam Project, if and when the U.S. withdrew its support. A note written to Kennedy by Prime Minister
Macmillan of Britain strengthened this belief..Macmillan, writing in November, 1961, said that he did not believe
28 Ibid., p. 72. 29 Philip Siedman, "Edgar Kaiser's Gamble in Africa," Fortune. November, 1961, p. 206. 125 that Nkrumah had gone over to the Soviet camp. However, if the U.S. was to withdraw the loan offer, the African states would regard the move as an attempt to use financial power to dictate national policy. The Russians would then repeat the success they had in Egypt in 1956. But, if the U.S. and
Britain backed the Volta bam project, then African states would clearly see that industrial development could be com- binded with freedom and that the Western system could be a viable alternative to Soviet methods of rapid industriali- 30 zation.
President Kennedy's own convictions. According to the official historian of the Kennedy Administration, Arthur
Schlesinger, the late President had continually favored the 31 Volta River Project. Yet, by the time of the Belgrade Con ference, he was deeply disturbed by Nkruman's actions. On
September 5 he stated that in the administration of aid funds, "we should give great attention and consideration to 32 those nations who have our view of the world crisis."
30 Schlesinger, op, cit., pp. 572-573.
^^Ibid., p. 573. 32 McKay, o p . cit.. p. 335. 126
The President began to wonder whether, in view of
our limited aid to Africa, we should commit such a large
portion of it to a single project in a single country which
was oppressive domestically and less "non-aligned" than we
had desired in foreign affairs. Criticism against the pro
ject came from Senator Albert Gore, the Senate Subcommittee
on Africa, Attorney-General Robert Kennedy, and even Adi ai
Stevenson. Public opinion also seemed opposed. Those in
favor of our participation were limited to Abreum Chayes,
Chester Bowles, 6. Kennen Williams, and J. Wayne Fredericks.
However, a check on our embassies in Africa showed all
African governments, even Nkrumah*s enemies, in favor of 33 the project.
As a result, Kennedy gave the project one more
chance. This came in the form of a special mission to Ghana by Clarence Randall and Abram Chayes. Randall, formerly of
Inland Steel, was a well-known steel magnate whose opinion
the President would respect. The mission was designed to
serve two purposes. First, these men would seek assurances
about Ghana's ability to meet the costs of the project and
33 Schlesinger, o p . cit.. p. 572 127
34 about the political orientation of Ghana's government.
Second, the mission would provide cover for Kennedy's decision to go ahead with the project. Schlesinger re ports that if Kennedy had wanted the mission to veto the 35 project, he would have sent Chester Bowles.
The President's motivations to go ahead with the
Volta Project were several. First, it would show African states that we truly did support their aspirations for non- alignment. Second, he hoped that the Volta Project would maintain a U.S. presence in Ghana and that Nkrumah would remain an independent nationalist rather than slip into the Communist bloc. Finally, the President did not wish to appear to be punishing Nkrumah's brand of neutrlism. The final decision to go ahead with the project camein November.
Agreements were signed in Accra in January about which 6.
Mennen Williams stated:
We have calculated our risks with great care
in deciding to assist the Volta River Project in Ghana, and are confident that our national interest, as well as African advancement is served by this decision.
35 Schlesinger, op. cit.. p. 572. 36 McKay, O P . ext.. p. 371. 37 G. Mennen Williams, "Rule and Exception in Africa, Department of State Press Release #16, Jan. 8, 1962, p. 5. 128
Perhaps Kennedy's greatest consideration in approving the project was the possible long run effect upon Ghana.
After all, the final beneficiaries would be the future generation of Ghana, not necessarily the Government of Kwame
Nkrumah. After the 1966 coup overthrowing the Ghanaian dictator, columnist Carl T. Rowan, in retrospect, praised
Kennedy's actions:
The coup reminds me of the wisdom of President Kennedy when his aides were bitterly divided over whether the United States should provide $147 million in loans for Ghana's Volta Dam project. Neither Nkrumah nor any other leader lasts forever, Kennedy concluded, insisting that the United States had to place s«ne faith in the decency and the future of the ordinary people of Ghana.
The Final agreements. The final agreements were signed in Washington on February 8, 1962_. -But before the ceremonies
Senator Albert Gore of Tennessee made an eleventh hour attempt in the Senate to block finalization. He argued that in view of the recent events in Ghana, suggesting dictatorial rule by Nkrumah, the President should reconsider and resubmit the whole subject to Senate investigation. Gore claimed that the Volta project would only benefit the Nkrumah regime and
38 Carl T. Rowan, "A Lesson in the Politics of Hunger." (Washington) Evening Star. March 2, 1966. 129 private business interests in the United States. Since the smelter would employ only a limited amount of the Ghanaian labor force, it would not be serving either the Ghanaian people or U.S. foreign policy goals. However, his protest 39 was too late.
The final assistance from the U.S. came in the form of $147 million in loans to Ghana. A breakdown of the loans was as follows: Of the total cost of the dam and power grid,
$196 million, the Ghanaian government put up $98 million.
The remainder came from outside sources: The I.B.R.D. -
$47 million, the Export Credits Guarantee Department of the
British Board of Trade - $14 million, the U.S. Export-Import
Bank - $10 million, and $27 million from A.X.D. Of the A.I.D. loan - $20 million, appropriated in fiscal year 1961, went to the dam; and $7 million, appropriated in fiscal year 1962, went towards the power grid.
The total estimated cost of the aluminum smelter at
Tema was $164 million. Of this figure $110 million came from the U.S. government: half from the Development Loan Fund of
39 Senator Albert Gord, "The Volta River Project in Ghana," Congressional Record. February 7, 1962, pp. 1803-1806 130
A.I.D., and half from the Export-Import Bank. The remainder,
$54 million, came from Kaiser and Reynolds and was insured by an Investment Guaranty agreement. Thus, the total esti mated cost of the Volta River Project, excluding Tema Harbor, 40 was $360 million. —
U.S.-Ghanaian Relations: 1962-1966. With the imple mentation of the Volta River project, however, U.S.-
Ghanaian relations did not improve. Instead, Nkrumah*s policies were to seriously affect our foreign aid to Ghana.
Deterioration of relations. In April, 1962, the
Ghanaian government sent the U.S. an aide mémoire protesting our resumption of nuclear testing although not ever con- 41 demning the Soviet test series. Then, in May, Nkrumah was
40 U.S. = Congress, Senate Committee on Foreign Relations. Foreign Assistance Act of 1962. Hearings ... on S.2996...April, 1962. 87th Cong., 2nd sess. (Wash ington: Government Printing Office, 1962), pp. 136-138; and U.S. Agency for International Development, Report on Foreign Assistance Prograuns FY 1962. (Washington: Govern ment Printing Office, 1962), pp. 65, 72. 41 U.S. Department of State Press Release, No. 284, May 3, 1962. 131
42 awarded the Lenin Peace Prize of 1961.
Mkrumah took an even more vocal anti-colonial, anti
imperial stance at two conferences which he sponsored at
Accra in June: The Conference of African Freedom Fighters, 43 44 June 4, and the World Peace Assembly, June 21-28.
Then on August 1 came the incident which would be
the final straw for the United States. Upon return from
talks with President Yameogo of Upper Volta, a hand grenade was tossed at Mkrumah's car in the town of Kulungugu, north
ern Ghana. For the next two months bondes were set off all
over Ghana and further assassinations of Ghanaian officials were attempted. In Accra the Ghanaian press attempted to
implicate the West in a general conspiracy against Ghana.
These allegations were portested by Williaua P. Mahoney, Jr.,
the U. S. Ambassador. According to Colin Legum the sources
42 "Nkrumah Awarded Lenin Peace Prize." Africa Report. Vol. 7, No. 5, May, 1962, p. 18. 43 K. Nkrumah, "African Freedom and Unity, " Ghana Today. (Supplement), June 20, 1962. 44 "Ghana to be Host to Peace Assembly," Africa Report. May, 1962, p. 13; and "Dr. Nkrumah States the Neutralist Case,”, Africa Report. August, 1962, pp. 10-11. 132 of these incidents were clearly opposition groups in 45 Nkrumah*s party as well as refugees and exiles in Togo.
Senator Dodd*s criticisms. Early in December
Senator Thomas J. Dodd took extensive testimony from the leader of one of the exile groups, Mr. K. A. Busia, on be half of the Senate Subcommittee on Internal Security. When the Hearing was subsequently published, it carried the title
"Is U.S. Money Aiding Another Communist State?" Senator
Dodd wrote in the introduction that "the testimony and documentation presented here and the evidence of recent weeks strongly suggest that Kwame Nkrumah's Ghana has be come the first Soviet satellite in Africa, just as Cuba
is the first Soviet satellite in the Americas.One of the less liberal newspapers in the United States reported 47 on the Hearing with the headline "Ghana Called New Cuba."
45 "Emergency in Ghana," Africa Report. October, 1962, pp. 19-20. 46 U.S., Congress, Senate, Committee on the Judiciary, Subcommittee on Internal Security. l£ U.S. Money Aiding Another Communist State? 87th Cong., 2nd sess. (Washington: Government Printing Office, 1963), p. 1. 47 David Senter, "Ghana Called New Cuba," Los Angeles Herald-Examiner. July 15, 1963. 133
However, the New York Times blasted Dodd as "harmful to the 48 American position in Africa."
A combination of increasing domestic criticism and
increasing disgust with Nkrumah led President Kennedy to
instruct A.X.D. not to extend any more long term credits to 49 Ghana.
Overall U.S. assistance to Ghana. Although the United
States cut off large scale loans to Ghana, we continued to
extend technical assistance, PL 480 assistance, and develop
ment grants to Ghana. This data is shown in Table II and
Table III. Aid indicated in the Tables includes, of course.
Peace Corps Volunteers. At one point 115 PCV's comprised about 50%
of the secondary school teachers with University degrees.
Twenty three other Peace Corps members worked in the agricu
ltural sector and on geological surveys.
48 For the text of the editorial and Dodd's reply, see his remarks on the Senate floor. Congressional Record. Vol. 109, July 24, 1963, pp. 12490-12492. 49 Schlesinger, o p . cit., p. 574.
"Technical Advice Centres Help Local Development Projects," New Ghana, Vol. VII, No. 27, October 9, 1963, pp. 6,7. 134
TABLE II 51 U.S. FOREIGN ASSISTANCE TO GHANA: FISCAL YEARS 1961-1967 (Millions of U.S. Dollaurs)
FY1961 1962 1963 1964 1965 1966 1967
Loans 20.0 62.0 none none none none none Grants N.A. 1.9 1.6 0.5 1,0 N.A. N.A. Total N.A. 63.8 1.6 0.5 1.0 N.A. N.A.
Technical Cooperation N.A. N.A. 1.7 1.2 1.2 1.9 1.2
Cumulative (1948-196„) Loans 20.0 82.0 82.0 82.0 82.0 82.0 82.0 Grants 4.1 5.9 7.5 7.9 9.0 N.A, N.A, Total 24.1 87.9 89.5 89.9 91.0 N.A. N.A.
Militaury Assistance none $5,000 less than none none none Cumulative $50,000 (1948-196) none $5,000 H
51 Table Compiled from the following Sources: (a) U.S. Agency for International Development, The AID Program. (Washington: Government Printing Office, June, 1964), p. 40. (b)U.S. Agency for International Development and Department of Defense. Proposed Mutual Defense Programs FY 1966: Summary Presentation to the Congress. (Washington: Government Print ing Office, 1964), pp. 201, 203; (c) Same title for FY 1966 (Washington: Government Printing Office, 1965) pp.230, 232.; (d) U.S., Agency for International Development. Proposed 135
TABLE II (continued)
FY1961 1962 1963 1964 1965 1966 1967
PL 480 N.A. N.A. 0.6 2.2 0.8 8.7 N.A. Export- Import Bank none 65.0 none none none none none Other* N.A. N.A. 0.7 0.8 0.9 N.A. N.A.
Cumulative (1948-196_) PL 480 N.A. 2.9 3.5 5.7 6.5 N.A. N.A. Export- Import Bank none 65.0 65.0 65.0 65.0 65.0 65.0 Other N.A. 0.5 1.2 2.0 3.0 N.A. N.A,
*"Other Non-Economic Aid, " including Peace Corps.
N.A. - Not Available
Economie Assistance Programs FY 1967. (Washington: Government Printing Office, 1966),pp. 224, 227, 230; (e) U.S., Agency for International Development and Department of Defense. Report tothe Congress on the Foreign Assistance Program for Fiscal Year 1962. (Washington; Government Print ing Office, 1963) pp. 31, 39, 65, 72; (f) U.S., Agency for International Development and Department of Defense, the Foreign Assistance Program: Annual Report to the Congress. Fiscal Year 1.964. (Washington: Government Printing Office, 1965), pp. 104, 106, 107. 136
TABLE III
CUMULATIVE U.S. ASSISTANCE TO GHANA52
Total assistance from June 30, 1946 to June 30, 1965 includ ing agricultural commodity exports under barter contracts - $170.4 million
Loans Total Principal Interest Principal 1949-1965 Repayments Collected Outstanding
AID 82.0 0.1 0.7 81.9
Export- Import Bank 65.0 1.1 65,0 Total 147.0 0.1 1.8 146.9
Grants: AID 9.0
Food for Peace: Emergency relief and economic dev elopment 1.6
Voluntary agencies 4.9
Other U.S. Programs 3.0 Total 18.5
Agricultural commodity exports under barter contracts from July 1, 1954, through December 31, 1965, at export market prices — -— $5 million.
Sino-Soviet bloc assistance cumulative through 1965---- $231.0 million.
52 "Foreign Economic Assistance 1966," Congressional. 137
Ghana's evolution towards ^ socialist dictatorship.
As a result of several assassination attempts, Nkrumah
jailed even his closest advisors. Increasingly, he became more isolated and surrounded himself with uneducated and 53 unexperienced party hacks. When the Supreme Court re
fused to convict several party lieutenants of treason, 54 Nkrumah fired the judges. In the meantime he graciously entertained Premier Chou-en-lai of China who was on a seven- 55 week tour of Africa.
Then, in late January, 1964, he rigged a nationwide referendum which gave the National Assembly the authority to make Ghana a one-party. Socialist state. The result was
99.9 per cent of the ballots in favor of a clause estab
lishing the Convention People's Party as the "leading core of all organizations and the vanguard of the people in their
struggle to build a Socialist society." This phrase was
Record. July 20, 1966, pp. 15716, 15732, Vol.112, No. 116. 53 See Lloyd Garrison, "Portrait of Nkrumah as Dictator." New Ymrk Times Magazine. May 3, 1964; and, J. Kirk Sales, "The Loneliness of Kwame Nkrumah," New York Times Magazine. June 27, 1965. 54 Lloyd Garrison, "Ghana Facing Tighter Rule," New York Times (Section 4) February 9, 1964. 55 Seymour Topping, "Chou Trip Called a Gain for Peking," New York Times. February 9, 1964. 138
eg similar to Article 126 of the 1936 Soviet constitution.
Also included were powers to dismiss the judiciary. Purges followed in the police, the civil service, and the faculty and students at the University of Ghana.
Increasingly, Nkrumah developed a paranoic fear that the
"imperialists" were out to "get" him. Especially conscious of the clandestine activities of the U.S. Central Intelli gence Agency, he purchased 500 copies of Andrew Tully's book, CIA - The Inside Storv and distributed them to friends 57 and party members.
Next, the Ghanaian press began to attack the Peace
Corps and link it and the CIA to assassination attempts on
Nkrumah. On February 4 several hundred young CPP militants stormed the U.S. Embassy in Accra protesting U.S. "rumor mongering . " Ambassador Mahoney was unable to see Nkrumah and was called back to Washington for discussions. Then, on
56 Lloyd Garrison, "Ghana Balloting Marked by Fraud, " New York Times. February 4, 1964.
^^"In Ghana, CIA is Murder, Inc." N. Y . Herald Tri- bune, February 6, 1964. 139
February 8, four U.S. teachers were deported for "subver- 58 sive activities."
The final blow to U.S.-Ghanaian relations in 1964
came when the Ghanaian Government decided not to renew the contracts of Peace Corps teachers which were to expire in 59 July, 1964, and July, 1965.
These events were followed up by another hearing by
Senator Dodd entitled "Ghana Students in United States
Oppose U.S. Aid to Nkrumah." Reflecting on the recent
events, he took a "didn't I tell you so" attitude. This
time Dodd stated that it was "difficult to doubt," that
"there are some people in the State Department who have
sympathy for Nkrumah. They deliberately influenced the 60 the President of the United States." Dodd concluded:
58 Lloyd Garrison, "Four U.S. Educators Deported by Ghana on Spying Charges," New York Times. February 9, 1964. 59 "Peace Corps Ouster Seen," New York Times. Feb ruary 16, 1964. 60 U.S., Congress, Senate, Committee on the Judiciary, Subcommittee on Internal Security. Ghana Students in the United States Oppose U.S. Aid to Nkrumah. (Washington: Gov ernment Printing Office, 1964), p. iv. 140
The U.S. Department of State has defended aid to Nkrumah *8 government on the ground that it is an act of friendship toward the Ghanaian people. On the contrary, the students believe that to give money to Nkrumah is an act of unfriendliness toward the people who are trying to liberate themselves from Nkrumah, since it helps to solidify his tyranny over them.^^
U.S.-Ghanaian relations continue at a^ low ebb. For the next two years U.S.-Ghanaian relations remained at a low ebb but were never severed. During this time Nkrumah concentrated his energies on the Organization of African
Unity and the subversion of African states with révolu- 62 tionaries trained by his Bureau of African Affairs. The
U.S. took a dim view of these activities. Perhaps Walt
Rostow described best our policy toward such intrigues:
Some of our greatest difficulties flow from leaders in the developing nations, who have built on such sentiments (as anti-colonialism) ambitious policies of regional expansion or hegemony— policies disruptive in themselves and sedulously exploited by the Communists both to heighten conflict within the Free World and
^^Ibid.. p. vi. 62 Lloyd Garrison, "Exiles in Ghana Being Deported, " New York Times. October 21, 1965. 141
to acquire presence, influence, and leverage.''^63
The Agency for International Development explained
in its program proposal to the Congress for Fiscal Year 1966 why Ghana was receiving such a small A.I.D. program:
In Ghana, the economic situation is charac terized by serious fiscal difficulties, heavy concentration on government ownership of in dustry, increasing authoritarianism, and discouragement of domestic private investment. However, the rich natural endowment of the country gives some grounds for hope of future constructive economic and political develop ment.®^
Nkrumah criticizes U.S.in book on Neo-colonialism.
The next episode occurred in late October, 1965. At the
summit conference of the Organization of African Unity in
Accra, Nkrumah distributed copies of his latest book which 65 condemned Washington as "the citadel of neo-colonialism."
In the final chapter of Neo-Colonialism - The Last Stage of
Imperialism, he stated.
In order to halt foreign interference in the affairs of developing countries it is necessary to study, understand, expose, and actively com-
63 Walt Rostow, "The Role of the Emerging Nations in World Politics," Department of State Press Release # 44, March 15, 1965, p. 2.
^^U.S., Agency for international Development, Proposed Mutual Defense Programs JgX 1966. (Washington: Government Printing Office, 1965), p. 145. ®®Lloyd Garrison, "Book by Nkrumah Attacks the 142
bat neo-colonialism in whatever guise it may appeau:. For the methods of neo-colonialists are subtle and varied. They operate not only in the economic field, but also in the political, religious, ideological and cultural st>heres.
As "mechanisms of neo-colonialism", he listed the
International Monetary Fund, the IB.R.D., the international
Development Association, and the International Finance
Corporation which have major support frcxn U.S. capital.
Turning to labor he cited CIA operatives in the International
Confederations of Free Trade Unions. Then he attacked
Hollywood motion pictures, evangelism by religious sects
such as the Jehovah's Witnesses, the Peace Corps, A.I.D., the USIA, and Moral Re-Armament. Sargent Shriver, he claimed, had close contacts with Allen Dulles and the CIA. 67
In essence Nkrumah perceived all U.S. efforts overseas as one vast neo-colonial intelligence network designed to sub vert Africa. Thus, the U.S. was the archenemy of Africa.
The appearance of the book, however, came at an unpro-
U.6." New York Times. October 31, 1965. 66 Kwame Nkrumah. Neo-Colonialism - The Last Stage of Imperialism. (New York: International Publishers, 1966), p. 239.
®^Ibid., pp. 242-251. 143 pitioua moment. At the time, Ghana was negotiating for
IMP assistance to help her out of her staggering debt pay ments. Further, she had requested $100 million in surplus food shipments from the U.S. government. On November 20th,
U.S. flatly rejected the PL 480 request. Although the U.S. did not give Nkrumah's book as a reason, the rejection came only two days after Ambassador Williams lodged a formal pro- 68 test to the Ghanaian Ambassador in Washington over the book.
Nkrumah*s reaction was apologetic. One week later
Ghana delivered a "conciliatory" note in reply to the pro test in which it was "explained” that the book attacked the system of neo-colonialism, not the U.S. Government. However, 69 the U.S. did not reverse its decision on the PL 480 aid.
Nkrumah further "ate crow" when, in a New Year's broadcast to Ghana, he said that cordial relations between Ghana and the U.S. would continue despite the surplus food incident.
He cited past examples of U.S. aid which provided "evidence of the friendly and mutually useful cooperation which exists"
68 "Ghana Bites U.S. Hand So Feeding is Halted," N.Y. Herald Tribune. November 24, 1965.
^^"Note to U.S. Explains Nkrumah's Book," Wash ington Post. November 30, 1965. 144
70 between the two countries.
Mkrumah takes a. more conciliatory attitude towards
U.S. at Volta Dam inauguration. By this time the Volta Dam had been completed. Formal inauguration ceremonies were scheduled for January 22, 1966. Unfortunately that day's events were not reported widely in the United States. How ever, it was clear that Nkrumah was elated at the successful completion of the dam and the prospects of the aluminum smelter. Clearly, on that day, Nkrumah showed his apprec iation for the United States efforts. Charles W. Bass,
Second Secretary (f the U.S. Embassy to Ghana reported that:
The President (Nkrumah) declared that Ghana "needs great friends", indicating by the context that it needs the United States as one of them.
One theme sounded by the President was the "common advantage" to developed and developing countries of projects such as the Volta Dam and the VALCO smelter. Nkrumah said that in its relations with the developing countries, the United States can "rightly" increase its own prosperity and at the same time assist in increasing the prosperity of the developing countries. Referring to the "mutual respect" between the United States and Ghana, he declared that the Volta Project is "living prodf that nations and people can
'Nkrumah Optimistic on Ties with U.S., "Miami Herald. January 2, 1966. 145
cooperate and co-exist peacefully with neutral advantage to themselves, despite differences of economic and political opinions."
Although Nkrumah made oii^ one reference to neo-colon- ialism, he failed to mention specifically the contributions of the United Kingdom or the World Bank. In Ghana's press, the "U.S. contribution was usually mentioned with approval."
Bass concluded that:
The thousands of Ghanaians present at the in auguration could hardly have failed to note the part played in the completion of the Volta River Project by Americans and the American Government. The ceremony was maurked by Nkrumah ' s obvious cordiality toward Ambassador (Franklin) Williams and the warmth of his frequent references to other American officials and businessmen and to our Government. From the point of view of Kaiser Industries and VALCO, the ceremony was an almost unqualified success. The completed floodlit dam demonstrated American know-how and technological efficiency at its very best. The personal re lations between President Nkrumah on the one hand and Mr. Kaiser and his American associates on the other were marked by the care character istic of the association of old friends and by a tone of apparently mutual admiration.7^
Thus, in January, 1966, it appeared that U.S.-Ghana ian relations were definitely on the upswing. But, then.
71 Charles W. Bass, Second Secretary of the U.S. Embassy in Accra, in his report to the Department of State (unclassified), Department of State Airaram £ A-341. February 1, 1966, pp. 2-4. 146
Kwame Nkrumah made preparations to visit Peking and Hanoi on a peace-making mission concerning the Vietnam war.
U.S.-Ghanaian Relations: 1966-1967 - The military C o u p of 1966. If President Kennedy believed that no dictator would last forever when he made the final decision to go ahead with the Volta River Project, he was right. On February 24, 1966, while Nkrumah was in Peking, Ghana's Army made him a man without a country.
The national liberation council assumes power. The coup surprised many in the West, although it followed five other military coups in West Africa. The new military re gime, calling itself the National Liberation Council, had received opposition only from the loyal Russian-trained and
Russian-armed Presidential Security Guard. After taking the
President's residence. Flagstaff House, by force it was 72 found that eleven Russians had been killed in the battle.
The coup was a popular one. Thousands of Ghanaians danced and paraded in the streets for days after the historic event. Crowds tore down statues which Nkrumah had erected
72 Donald Loucheim, "Eleven Soviets Lost Lives in Ghana's Army Coup," Washington Post. March 1, 1966. 147
to himself, and displayed numerous anti-Nkrumah placards.
The seven-man N.L.C. named Major-General Joseph
Arthur Ankrah as its head, and promoted him to Lieutenant-
General. Immediately, about 60 political prisoners were
released, the Convention People's Party was disbanded,
Nkrumah was dismissed. Parliament was dissdved, and many 73 of Nkrumah's associates were arrested.
Shortly thereafter, the new government declared that
Ghana would honor all its international commitments and would follow a course of true "non-alignment, " a policy
to which only "lip-service" had been paid in recent years.
Officially, the N.L.C declared that they had staged the
coup in revolt over Nkrumah's devastating economic policies.
In the months before the coup there had been serious
food shortages in all shops and markets in that nation.
The United States' refusal to grant surplus food c(xnmod- 74 ities to Nkrumah made the situation even worse.
Policies favorable to the west. The appearance of
73 Kenneth L. Whiting, "Ghana Coup Apparently Success ful," Washington Post. February 25, 1966. 74 Donald Louche im, "Nkrumah Leaves Ghana in Economic Ruins," Washington Post, February 25, 1966. 148
the Ankrah government was a victory for the West. Immed
iately, the N.L.C. established a pattern of events which we^e extremely favorable to Western diplomats.
It was established that at the time of the coup,
about 1,000 Soviet, 150 Chinese, and 45 East German tech
nicians and teachers were operating in Ghana. On March 1, 75 Ankrah expelled 130 Soviet technicians. The next day all 76 Chinese and East Germans were ordered to leave. By March
17, the Soviet contingent was reduced to 197.
Diplomatic recognition for the new regime came
quickly. On March 2, Liberia recognized it, followed by 77 Nigeria and the Malagasy Republic. Several days later
the U.S. and U.K. granted recognition. Diplomatic ties
75 "Soviet Experts Leave at Request of Ghana," Washington Post. March 2, 1966.
^^"New Ghana Government Ousts Red Chinese, German Experts," Washington Post. March 3, 1966. 77 "New Ghana Government Recognized by Liberia," Washington Post. March 3, 1966. 149 with Britain had been suspended since November, 1965, when 78 the Nkrumah regime broke them over the Rhodesia issue.
By March 14, Hungaria and Czechoslovakia had extended 79 recognition bringing the total up to thirty-two.
Final success for the Ankrah regime came when the
Soviet Union extended recognition on March 17; along with
Red China which agreed to limit its diplomatic staff to 18; 80 and agreed to withdraw all its technicians and teachers.
Ankrah had proclaimed a policy of "balanced neutrality" and 8X intended to maintain relations with Moscow and Peking.
However, in a move to cut back expenditures on diplomatic 82 missions abroad, Ghana withdrew its ambassador to Hanoi.
78 "New Regime in Ghana Resumes British Ties," Washington Post. March 6, 1966. 79 "Hungarians, Czechs Recognize Ghana Rulers," Washington Post. March 15, 1966. 80 "Ghana Ousts More Reds as Soviet Recognizes it," Washington Post. March 18, 1966. 81 "Ghana's Chief Pledges 'Balanced Neutrality!" Washington Post. March 13, 1966. 82 "Ghana Changes," Washington Post. March 26, 1966. 150
Increase of western aid. The United States reaction to such favorable events was to reconsider the surplus food request which it had rejected under Nkrumah. Thus, in a
sense, rewarding the new regime, the U.S. dispatched 83 $7,460,000 in food aid to Ghana. Further, the U.S. urged
other Western powers to give assistance to Ghana. The result was a 9.8 million dollar development grant from the 84 West German Government.
A.I.O. in its program presentation to Congress for
fiscal year 1967, commented that even though its present program was a small one of technical assistance, "the nature 85 and scope of the program may be affected by recent events."
In the meantime, the N.L.C. set up several invest
igating commissions with which to probe charges of corruption and external subversion against the Nkrumah regime
®^"U.S, Will Ship $7,460,000 in Food to Ghana," Washington Post. April 5, 1966. 84 "Ghana Moves," Washington Post. April 2, 1966. 8 5 U.S., Agency for International Development, Proposed Economic Assistance Programs FY 1967. (Washington; Government Printing Office, 1966), p. 179. 151
The conclusions confirmed these charges. Soviet and
Chinese influence had been widespread, and in general,
Nkrumah had led his country into economic ruins.
Analysis of the c o u p . These reports substantiated a highly accurate analysis of why the coup took place.
Three reasons are generally given:
(1) Growing dissatisfaction with the increas ingly authoritarian rule which Nkrumah exervised; (2) a generally deteriorating economic sit uation, due partially to declining prices for Ghana's primary exports, and partially to what was considered pofligacy and waste in Nkrumah'8 spending programs; and; (3) dissatisfaction with Nkrumah's foreign policy goals and methods, and expecially his increasingly close relations with Communist countries.®®
Ghana * s new political and economic policies. The governement quickly disbanded and seized the assets of various service organizations and corporations which
Nkrumah had set up as "wings" of his party. Included, were the Ghana Farmers Cooperative Council, the Young
86 Manfred W. Wenner, "African Coup O'etats," Library of Congress, Legislative Reference Service, Foreign Affairs Division; LRS Multilithed Reports ^ F-172. May 18, 1966, p. 7. 152
Pioneer Movement, the Kwame Nkrumah Ideological Institute
at Winneba, the African Affairs Center (a refugee camp for
African freedom fighters), the Bureau of African Affairs,
the Ghana Moslem Council, and the National Council of
Ghana Women. 87
The next task for the N.L.C. was to restructure the
economy. Mr. E. N. Oroaboe was appointed chairman of the
Government's National Economic Committee. He first
announced that Ghana needed $42 million to prop up the 88 sagging economy. The next move was to disband many of
the unprofitable state corporations set up by Nkrumah.
Nine of them were offered for sale to Western business;
six others needed private participation. It was gener
ally felt that these enterprises could be more efficient^ 89 run in the private sector.
Improvement of relations with the west. Further
events which improved U.S.-Ghanaian relations came on
87 "Nkrumah Organizations ' Assets Seized by Ghana, " Washington Post. March 28, 1966. SB Donald Loucheim, "$42 Million is Needed Now, Ghanaian Reports." Washington Post. March 4, 1966. 89 "Ghana's Bid to Business, * U.S. News and World Report. June 6, 1966, p. 82. 153
June 8, when the U.S. announced that 85 more Peace Corps
Volunteers would arrive in the fall to teach secondary 90 school and to work on geological surveys. On July 24, came the announcement that the U.S. would participate in
Ghana's International Trade Fair, February 1967. Previous ly, the U.S. had not shown any interest when Nkrumah scheduled 91 it for February, 1966.
In the meantime, Ghana's relations with the Comm unists continued to deteriorate. On June 11, North Vietnam 92 withdrew its ambassador in Accra. September 27 saw Ghana 93 break diplomatic relations with Cuba; and, on October 30,
China started withdrawing its embassy personnel from Accra 94 in a move to suspend, but not break diplomatic relations.
90 "Peace Corps Aids Ghana," Washington Post. June 8, 1966; and, "U.S. Peace Corps Expands in Ghana," New York Times. September 18, 1966. 91 "U.S. Decides to Participate in Ghana's World Trade Fair," New York Times. July 25, 1966. 92 U.S., Foreign Broadcast information Service, Daily Report. June 15, 1966, p. 15. 93 Donald Loucheim, "Ghana Ends Relations with Cuba," Washington Post. September 28, 1966. 94 "Peking Starts Withdrawing Embassy From Ghana," Washington Post. October 30, 1966. 154
Finally, in late August, Ghana sent a goodwill delegation to the United States led by Dr. Kofi Busia with the mission of explaining the goals of the new military regime. This delegation was received favorably and met with Congressman Barrett O'Hara's Subcommittee 95 on Africa. Under the present policies of the National
Liberation Council, then, favorable U.S.-Ghanaian relations can be expected to continue.
95 Barrett O'Hara, "Goodwill Mission from Ghana," Congressional Record. Vol. 112, No. 147, September 1, 1966, p. 20768. CHAPTER V
THE ECONOMIC ASPECTS OF THE VOLTA RIVER PROJECT
This chapter will analyze Ghana's economy, its structure, its problems and its relationships with the international economy, in an effort to give the reader a better understanding of Ghana's need for the Volta River
Project. Familiarity with Ghana's economic setting is essential if the reader is to grasp the magnitude of the tasks which confront this, as well as all, newly indep endent, "developing" African states.
The era of colonialism has left an indelible black mark on African economic development. Basically, the problem stems from the fact that the colonial powers found it convenient to introduce the African farmer to cash crops which were needed by the European peoples.
Production of these crops was encouraged at the expense of industrial development. Only after World War II were industries introduced which were not designed merely to exploit natural resources.
Today, after independence the African economies are still based largely on the export to Europe and
America of these cash crops (also called primary products or commodities) and minerals. Howerver, in recent years 156 the price per unit of these commodities has declined on the world market for a number of reasons (overproduction, sub stitution, synthetic products, etc.). To make matters worse, many of these countries rely on the export of a single commodity for a majority of its foreign exchange.
In the case of Ghana, she has been reliant upon cocoa for about 60% of her foreign exchange since World War II. As the African countries must, of necessity, import increas ingly more expensive capital goods, the result is an annual negative trade balance. One of the ways out of this predicament is the establishment of domestic indust ries whose products will substitute for capital goods imports as well as the necessary infrastructure to support these industries. Nkrumah explained this policy:
Many countries like the Gold Cost have been too dependent on agriculture, and in seme cases, on a single corp. This situation has rendered us extremely vulnerable to fluctations in world prices for our dominant crops. These fluctu ations have had unsettling effects on long term plans and crippled attempts to raise the stand ard of living. In order to keep up with the times, it is necessary to develop heavy indust ries in this country. The Volta River project, for example, is designed for such a purpose..
1 KWame Nkrumah, I Sneak of Freedom (N.Y.: Praeger, 1961), pp. 86-87. 157
The first part of this chapter will be a general description of the features of Ghana's economy which are salient to the Volta Dam Project. The second part will deal with Ghana's relations with the international econo- nomy, particuarly its balance of trade and balance of payments situation. Finally, the latter part of the chapter will discuss the ecomomic rationale for the Volta
River Project, and the three main elements of that Project: the Tema Harbor, the Akosombo Dam, and the Tema aluminum smelter.
I. A BRIEF DESCRIPTION OF GHANA'S ECONOMY
Ghana, located in West Africa, is bordered on three sides by Togo, Upper Volta, and the Ivory Coast.
The fourth boundary is the Gulf of Guinea, from 3 °15'
West to 1°12' East. This southern boundary is about 6° north latitude, while the northern border parallels 10° north. The country is about 425 miles long and 280 miles wide, expept the coastline which is 350 miles long. Ghana's area is almost 92,000 square miles, or roughly the size of
Oregon, and it is divided into eight regions for adminis trative purposes. The regions are; Western, Central, 158
Eastern, Volta, Ashanti, Brone-Ahafo, Northern and Upper
Regions.
The climate of the coastal belt is semiarid, sub tropical in the east and semiaried, wet tropical in the west. The central east-west belt is tropical with alti tudes ranging up to 2,800 feet, while the north is flat, 2 hot, and dry.
Most recent estimates indicate that Ghana's popu
lation is 7.7 million (1965). This marked a population
increase of 2 . 6 % annually. The gross national product per capita was eûaout $251 in 1965, and increase of $41 over
1963. The literacy rate has been about 25% throughout the 1960's. In 1965, 17% of the population attended
educational institutions in Ghana, Finally, Ghana has
shown a rapid increase in available doctors (People per
Doctor : 1963=17,900; 1965=13,200).^
About two-thirds of the population are engaged in
agriculture, fishing, and forestry. Ghanaians farm about
22% of the country's total area. Traditionally, Ghana's
2 Gary L. Lent, "Basic Data on the Economy of Ghana," U.S. Department of Commerce, Bureau of International Commerce, Overseas Business Reports: OBR-62-9, November, 1962, p. 1.
^U.S Agency for International Development and Depart ment of Defense. Proposed Mutual Defense and Development 159 farmland has been in the hands of peasants who hold about two to six acres per family. More recently larger farms have been established by the government, specifically the agricultural Section of the Worker's Brigades (now dis banded) . Also, some experiments have been made with State
Farms patterned on the Communist Model. Most of the pro duction and marketing of eash crops is regulated centrally by Government Marketing Boards. By and large, Ghana pro duces enough food to meet her domestic demand. However, most of Ghana's produce is lacking in portein. As a result of this chronic protein deficiency in the Ghanaian diet, Ghana must import protein-rich foodstuffs. In recent years Ghana's food imports have averaged about 15% of its 4 total imports.
Commoditv exports. Ghana's exports fall into two categories: agricultural produce and minerals. These two types of commodities amount for 98% of Ghana's total exports
The main commodities, in order of value, are: cocoa beans,
Programs FY 1966: Summary Presentation to the Congress, (Washington: U.S. Government Printing Office, 1965), p. 233. 4 Ghana: An Economic Survey. (London: Barclays Bank D.Co., August 1964), pp.3-6. 160 gold, diamonds, timber logs, manganese, sawn lumber, cocoa paste and cocoa butter, kola nuts, and bauxite.^
Three main commodities in the economy. For the pur poses of this paper, it is necessary to describe three commodities which can be or are either major export industries or major import substituting industries. It will be shown how these industries affect Ghana's balance of trade and balance of payments problem. These commod ities are cocoa, fish, and bauxite.
Cocoa. Ghana's the world's largest single producer of cocoa, accounts for about 30% of the world's supply.
The crop is grown almost entirely on small farms of six acres or less and in one relatively small area of the country. Commercial production began in the last decade of the 19th century and rapidly increased during the next thirty to forty years. In 1939 exports reached 311,151 tons but they soon fell off due to the swollen shoot and other diseases which blighted the trees. The Government took serious measures to cut out or destroy diseased
^Lent, OP. cit.. p. 8, 161 trees. After 1936 large scale spraying against capsid flies, plus help and instruction to the faunmers, radically changed production. Millions of Amazon cocoa seedlings were distributed. As a result of these measures, peak crop of over 400,000 ton was produced in the 1960/1961 season. Further, the Cocoa Division of the Mininstry of
Agriculture working closely with the Cocoa Research Instit ute of Ghana has been developing new sprays and cultivation 0 methods for the coooa growing areas throughout West Africa.
All cocoa purchases are made by the Ghana Cocoa Marketing
Board, and sales are handled by the Ghana Cocoa Marketing
Company (Ghana) Ltd., its wholly owned subsidiary. The
Board fixes in advance the price to be paid to the farmers 7 each season. Since 1961, the Board's sole buying agent has been the Ghana Farmers Marketing Cooperative which has 8 branches throughout the cocoa growing region. A cocoa
6 Ghanai An Economic Survey, p. 6. 7 Ibid.. p. 7. 8 Norman Mosher "Ghana Revises Cocoa Rules," Africa Report. November, 1960, p. 7. 162 market was estaüt>lished at Accra in 1961 at which licensed buyers representing the overseas manufacturing companies could make their purchases. Prior to 1961, the buyers' 9 market was in London.
There are several advantages to the marketing board system. For example, it stabilizes the farmer's disposable income and the merchandise market. George H. T. Kimble described its operation*
The prices paid to the producers are fixed by the marketing board. Behind its decisions lies a great deal of calculation and not a little intuition. It must, among other things, deter mine the marketing requirements of the producing areas, the cost of operating the board and keep ing the producers persuaded of the value of its functions, and the tax yield of a crop sold at a given price; in addition it must attempt to predict the flucuation of world demand during the forthcoming harvest season and the reaction of the producer to the fixing of the price at a level that may strike him as being more penal than protective.^®
Fisheries. Ghanaians have been fishing in the Gulf of Guinea for centuries. Although fish is an important source of protein, and although -there is an abundant source of fish in the Gulf, Ghanaians in the interior have not been able to procure enough to solve their protein problem.
9 Lent, O P . ext, p. 4.
^^George H. T. Kimble. Tropical Africa* Volume i* Land and Livlihood. Abridged Ed. (Garden City, N.Y.s Doubleday Anchor Books, 1962) pp. 444, 446. 163
There have been two reasons for this lack of distribution.
First, the fishing industry has been extr«nely inefficient.
Second, there has been a lack of transportation and refrig eration facilities in the interior.
Traditionally, salt-water fish have been caught by
a dugout canoe fleet numbering some 8,000 to 9,000 vessels.
The catch is made by three methods: drift and ring set ,
shore skein net, or by line. Kimble reported that the official harvest prior to the 1960's was over 20,000 tons, or an annual per capita consumption of ten pounds. This was not enough and Ghana had to import about 10,000 tons per year from Europe and her neighbors. By 1960 the import figure rose to 26,000 tons valued at $9.8 million.
Obviously, the canoes, which had to bear the rough breakers on the shore, could not stay out at sea very long, and the catch had to be dragged in by net. Once on the shore, the catch had to be sold immediately for what the market would bear. Then, the fish would pass through the hands of many small traders, wholesalers, and finally
^^Ibid.. pp. 240-241. 164
retailers. Some fish would be dried, some smoked, some
iced and sold fresh. However, a great deal of fish would
just rot away on the beach. The result was a high mark up,
especially on fish that did reach the interior.
Consequently, the Ghanaian Government has made
several efforts to expand the domestic catch and distri bution facilities through the Ghana Boatyard Corporation.
First, it estad>lished a hire-purchase plan whereby small
outboard motors could be bought and installed on canoes.
Secondly, the Government set out to build a fleet of two
hundred motorized vessels about thirty feet in length
and then loaned the money to the prospective buyers.
Thirdly, the Government has been chartering foreign-owned
vessels and distributing the catch throughout the country
through a chain of retail shops served by cold storage
depots. Finally, Star-Kist Foods, Inc. of California has 12 developed a tuna industry for Ghana.
To accommodate big fishing trawlers and state fish
ing enterprises, the fishing port at Tema has been expanded
at a cost of LG2 million.
12 Lent, og. cit., p. 5.
^^Ghana; An Economic Survey, pp.10-11. 165
Thus, Ghana has done a great deal to relieve the balance of payments problem by building an adequate import-
substituting domestic fishing industry. Most important for
the diet of the interior will be the fishing industry est
ablished on Lake Volta once the Lake is fully stocked with
fresh water fish. This project will befurther discussed
later.
Bauxite. The Ghana Geological Society has estimated the bauxite deposits of the country at over 200 million tons
Chief deposits which are presently being worked are at
Kanayerebo, near Awaso in the Western Region. The working
of this deposit began in 1941 by WAFAL, which was later bought out by British Aluminum, Ltd. Exports of bauxite between 1960 and 1963 averaged 228.7 tons per year.
Other deposits are located at Yenahin, 35 miles west
of Kumasi, and at Ejuanema near Mpraeso. Yenahin has, by
far, the largest bauxite deposit in Ghana, but there are
no adequate transportation services with which to facilitate
its mining. Both of these deposits will later be exploited
by VALCO starting about 1977 when they are linked up to 166
14 the Tema smelter by railway.
In 1962 the National Assembly passed legislation which vested ownership of all minerals, mineral oils and gases in, on, or under, or off the shore of Ghana in the President on behalf of the Republic. However, holders of valid concessions 15 were assured that their rights would not be abrogated.
Foreign trade and the balance of payments. Ghana * s reliance on commodity exports has led her into serious economic difficulties. Further, ambitious development plans, have called for the importation of large amounts of capital goods, in the form of consumer items, manufactured goods, and heavy industrial equipment. This, coupled with declining world prices for cocoa and other commodities, caused Ghana, in the mid-1950's, to go from a positive to a negative trade balance.
Negative balance of trade. At the time Ghana held large reserves of foreign exchange from previous years' cocoa sales. (At the time of independence, reserves were
"Ghana to be Sole Owner of all Mineral Resources," Africa Report. August, 1962, p. 24. 167 estimated at $547 million.) The trade balance was negative in 1956 and 1957, but it recovered in 1958 and 1959 when the world price improved and production increased rapidly.
This trend culminated with the record crop of 1960/61. How ever, once again, the world price fell, and a continuing negative trade balance followed. This unfavorable trade balance quickly ate up foreign exchange reserves.
Austeritv measures to improve the trade balance. As a result of a doubling of the trade deficit between 1960 and 1961, the Ghanaian Government was forced to take un popular austerity measures.First, Ghana raised the import duties on various consumer goods such as gasoline, diesel fuel, textiles, perfumes, alchoholic beverages, and selected food items, as well as on items not specified in the import tariff schedule or the free list. These raises were effect ive July 7, 1961.17
Secondly, through the Ghana Compulsory Savings Act, compulsory purchase of ten-year bonds amounting to 5% or 10% of total income was instituted. This savings scheme was de signed to add LGll million to government revenues. All wage
^*"Economic Notes," Africa Report, April, 1962, p. 17. 17 "Ghana Raises Import Duties on some Consumer Pro- 168 and salary earners had to subscribe to bonds at a rate of
5 % of their total income. For cocoa farmers, companies, and traders the figure was 10%. Interest rates were 2% for individuals and 4% for companies. This Act was effect ive July 31, 1961.^® Thirdly, in DecenA>er, 1961, the 19 Government instituted licensing of almost all imports.
In addition, in August 1962, Ghana borrowed $14.25 million from the International Monetary Fund, half in dollars, and half in sterling. This measure was designed to gain the time needed for the austerity measures to 20 take effect.
ducts.” Foreign Commerce Weekly, Vol. 66, No. 13, September 25, 1961, p. 22. 18 "Ghana Institutes Compulsory Purchase of 10-Year Bonds," Foreign Commerce Weekly. Vol. 66, No. 13, September 25, 1961, p. 19. 19 Lent, O P . cit., p. 9. 20 "I.M.F. Credit to Assist Ghana's Worsening Payment Balance," International Commerce, Septend»er 10, 1962, p. 31. and S. Willcox, "Ghana's Reserves Up.” Africa Report. November, 1962, p. 17, 169
TABLE IV 22 GHANA'S VISIBLE BALANCE OF TRADE
Date Total Value Total Value Visible Balance of Imports of Exports of Trade (LG thousands) (LG thousands) (LG thousands)
1951 N.A. 91,990 N. A. 1952 N. A. 86,377 N. A. 1953 N. A. 89,943 N. A. 1954 71,647 114,673 43,026 1955 87,864 96,231 8,367 1956 88,836 86,599 -2,237 1957 96,685 91.602 -5,083 1958 84,602 104,557 19,955 1959 113,024 113,359 355 1960 129,617 115,989 -13,628 1961 142,830 115,135 -27,695 1962 119,101 115,036 -4,065 1963 130,416 108,859 -21,557 1964 121,600 114,600 -7,000 1965 160,000 121,500 -38,500 1966 116,430 97,143 -19,285
22 Table compiled by this author from the following sources: (a) U.S., Department of Commerce, Bureau of Foreign Commerce, World Trade Information Service. Economic Develop ments in Ghana (Gold Coast) 1956. Part 1, No. 57-65 (Wash ington: Government Printing Office, 1957), pp. 9-10. (b) Lent, pp. 7-9. (c) "Ghana," in Annual Economic Review of West Africa. (London: Standard Bank Group, July, 1966), p. 4. (d) "Ghana: An Economic Survey," pp. 24-25. (e) Ghana, Handbook of Commerce and Industry, p. 168. 170
table V 23 GHANA'S COCOA EXPORTS
Date Tons of Price Paid Per Total Value of Cocoa Exported Ton on World Market Cocoa Exported (LG) (LG thousands)
1896 40 N. A. N. A. 1947 N. A. 201 N. A. 1948 218,000 137 N. A. 1950 270,000 178 N. A. 1951 230,000 245 60,310 1952 215,000 231 52,533 1953 235,000 359 56,143 1954 220,000 355 84,599 1955 210,000 222 65,559 1956 230,000 189 51,063 1957 260,000 N. A. 50,873 1958 245,000 352 62,318 1959 250,000 274.9 68,779 291,000 N. A. 1960 303,000 219.4 66,433 420,000 N. A. 1961 180 57,100* 405,350 N. A. 69,100 1962 421,220 N. A. 67,023 1963 68,100 366,794 N. A. 61,000 1964 570,000 N. A. N. A. 1965 400,000* N. A. N. A. 1966 425,000* 200* N. A. 1967 N. A.
*Estimated
23 Table compiled from following sources: (Letters correspond to citations in Footnote #22.) (a) pp. 2, 9; TABLE VI 24 GHANA'S BALANCE OF PAYMENTS Date Total Total Balance of Pay Payments Receipts ments on Current Account 1954 N. A. N. A. 34,271 1955 105,583 109,382 3,799 —— 1959 N. A. N. A. -11,258 1960 163,629 130,129 -33,500 1961 182,480 129,822 -52,658 1962 152,391 124,124 -28,267 1963 165,248 120,782 -44,466 1964 N. A. N. A. -32,000 1965 N. A. N. A. -79,000 24 Table compiled from following sources t (Letters correspond to citations in Footnote # 22.); (a) p. 9; (b) pp. 7-9; (c) p. 4; (d) pp. 26, 29. 172 Between 1961 and 1962 Ghana's mineral output declined due to fluctuations in the world prices for diamonds, man ganese, and bauxite. However, overall, the visible balance of trade improved in 1962. But 1963 saw a large trade gap once again. In 1964 the situation improved, only to fall off to the largest trade deficit ever in 1965. As can be seen from Table VI, Ghana's balance of pay ments on current account steadily deteriorated between 1959 and 1965 as a result of the large import surplus. By Febru ary, 1966, the external reserves were negligible after standing at L6150 million in 1960.^® Depletion of foreign exchange reserves on prestige projects. The import surpluses incurred from year to yeeuc were attributable not only to declining prices for cocoa exports, but also to increased imports of capital goods. Between 1960 and 1965, the Nkrumah regime sought to build a socialist economy by rapid industrial expansion. The focus was on vast state enterprises and prestige projects many of which were unnecessary. These undertakings in- 25 Annual Economic Review of West Africa, p. 4. 173 eluded an international airlines (Ghana Airways), a drydock and shipbuilding yard. Black Star Square, a nuclear reactor, a $10 million O.A.U. Conference Hall which was used only once, Africa's longest aircraft tunway at Tamale, two sugar factories, a glass factory, a cannery, the Kwame Nkrumah 26 Steelworks, 51 foreign embassies, and many others. At the time of the 1966 coup, Ghana's debt to foreign creditors was estimated at approximately $1.1 billion (L360 million), or L48 per capita. A Breakdown of this debt in cluded L275 million in medium and long-term debts; L35 million for the special Volta Dam loan; and L28 million in overdue 27 short-term suppliers credits. About L200 million would come due before 1971. The 1966 loan servicing arrangements alone would have cost L33 million, or nearly 30% of that years total export earnings. However, in June, payments were temporarily suspended . This measure was taken because the International Monetary Fund feared that meeting these payments would not leave 26 See "Ghana: Proud, Dynamic, but no Rice in the Shops, M New York Times. January 31, 1966; and, "Ayieeh! Ghana Gets the Bill," The Economist. April 30, 1966, pp. 498-499. 27 "Ghana After Nkrumah, " The Economist (London) , August 6, 1966, p. 549. 174 enough foreign exchange for imports at "a reasonable level." These imports, many of which were food staples, were necess- 28 ary for political stability. (It was the lack of food in the markets which caused Nkrumah's unpopularity.) Post-Nkrumah austerity measures. To help Ghana out of its economic difficulties, the National Liberation Council drew up a program» for recovery in three phases. The first, or "emergency" phase involved preliminary cut backs and the deferral of debt payments until a new budget was implemented. The second, or "review" phase started with the new budget and will continue until June 1968, when a new development plan will be ready. Then the third phase will 29 begin. Ghana next undertook domestic and international measures which would promote economic and political stadaility. First, an austerity budget was introduced on July 1,1966, which was designed to cut domestic spending. One measure involved abandoning or putting up for sale many of the state enterprises begun by the Nkrumah regime. Un-economic air routes were eliminated from Ghana Airways* schedules and four Ilyushin jets were returned to the Soviet Union. Diplomatic represent ation abnoad was cut by 4 0 % saving L one million pounds 28lbid., p. 551. 29 Drew Middleton, "Major Reforms Guide Ghana Out of 175 sterling. Nine state corporations were offered for sale to foreign investors, while six others were offered as joint ventures. The remaining state enterprises experienced manage ment cutbacks and improvements. Finally, all government departments were forced to cut back 10% on their budget estimates. Other measures included reduction or elimination of custom duties on essential imports such as petroleum products, and food staples; and a ten percent increase on the basic income tax rate. Finally, the new government disbanded many of the state-supported, ideologically oriented associational groups such as the Young Pioneers, and the Kwame Nkrumah Ideological Institute. Agriculture contributed to Ghana's unfavorable balance of trade. Concentration on growing crops of ex port left Ghana without adequate agricultural productions to meet domestic demand. Therefore, the NIC planned, first, to diversify agriculture, to rely more heavily on peasant holdings, and to improve irrigation and secondary roads. akruma&LBra," New York Times. June 16, 1966. ^^Anthony Astrachan, "Changes in Ghana Hit High, Low," Washington. Post. August 15, 1966. 176 Secondly, International measures were helpful. The Western powers came fo^ard with approximately $30 million in economic aid to help relieve Ghana's balance of payments. The U.S. contributed $7.6 million in food supplies to be sold for local currency which could be plowed back into Ghana's development program. Canada gave $2 million worth of wheat; while West Germany contributed about $5 million in soft-term loans to buy essential commodities, and about $5 million for a plan to improve distribution of electricity from the Volta Dam to Accra. The former measures helped put food staples back in Ghanaian shops. Further, Ghana gained $7.5 million as a reimbursement for early completion of thé Volta Dam, and $3.5 million from Britain that was earmarked for the Volta Project, but was never spent. Another, international measure was a standby credit from the I.M.F. of $36.4 million, $5 million of which would not be available until March 1967. This I.M.F. package was in the form of money, technical advice, and psychological 31 support. 31 "New Budget Helps Ghana Toward Economic Recovery," Washington Post. August 14, 1966. 177 The final measure implemented by international forces was in the form of loan payment rescheduling. In June, 1966, Ghanaian officials met with representatives from the I.M.F., the I.B.R.O., and thirteen countries to discuss payments suspension. Negotiations were held in September. The re sult was a deferral and an eight-year continuation payment beginning in mid-1971 on a large part of the debts to foreign commercial lenders. Most of these obligations had been in the form of one to twelve year credits from suppliers 32 chiefly in West Germany and Britain. (In the waning years of the Nkrumah regime, Ghana was accumulating these short term credits at the rate of two or three per month, mainly because Nkrumah distrusted "neo-colonialist" lending instit utions . ) These measures appear adequate enough to put Ghana back on a sound economic footing in the coming years. Recent increases in cocoa prices on the world market are contrib uting greatly to Ghana's foreign exchange. If these prices remain up in the next five years, they will hasten Ghana's economic recovery. 32 "Ghana: Economy Inherits a Legacy of Debt," New York Times, January 27, 1967 178 II. EFFORTS TO RESTRUCTURE THE ECONOMY Development plans. The first development plans were instituted between 1951 and 1959 « The First Five Year Plan (1951-1957), and the Consolidation Tvio-Year Development Plan (1957-1959) concentrated on infrastructure such as commun ications, public works, education, and general services. The Second Plan which went into effect on July 1, 1959, emphasized agricultural and industrial development, housing, 33 health, sanitation, and water supplies. The Third Plan, the Seven Year Plan, was originally designed to concentrate on import-replacing industries and agricultural expansion and to encompass the fiscal years 1963/1964 through 1969/1970. However, as explained above, the plan included too many ambitious state enterprises and threw the country into serious economic difficulties. As a result, the new military government terminated the 34 plan on July 1, 1966, pending atwo year review period. The Volta River project. Covering the spectrum of all three development plans was the Volta River Project which comprised three related individual schemes which 33 Lent, op. cit., p. 9. 34 Annual Economic Review of West Africa, p. 7. 179 comprised three related individual schemes which comp limented each other. Both geographically and economically, Tema Harbour, the Akosombo Dam, and the VALCO smelter formed a triangular relationship. These projects were truly worth while and were constructional achievements which will be of lasting value to the country. Harbour. To serve the various develo£»nent projects and development plans which Ghana hoped to realize, it was known at an early date that a new, more adequate harbour was necessary. Normally, the West Coast of Africa lacks natural harbors. Therefore, a man-made one was mandatory. One deep water port had been built at Takoradi between 1923 and 1928. However, this port served south-western Ghana and was inadequate to handle the cargo and machinery required for the Volta River scheme. Therefore, In 1951, a new harbor in eastern Ghana, near Accra, was conceived. It was designed not only to serve the Volta Dam construction, but to continue as a permanent port for the development of the eastern regions. This second deep-water port would also ease the burden on the overland transportation 35 Xalth Joppt T#m»i Ghmna'# lew Town mud Harbour• (loora: Hlnletry of Information, 19^1), pp. 5 ^ , ë. 1791 Oonstructlon of the Harbour : 1951 - 1962. Th# n««d for this port was rooognizsd in th# First Development Plan inaugurated in 1951* 1 site was chosen at Tema, and pre liminary works were begun early in 1952. If ter two years, a labor force of 2,500 had constructed forty miles of rail road, twenty miles of road, and forty miles of water pipeline from Accra to Tema, and northward from Tema to the Shai Hills quarries which, provided the stone for the breakwaters. Also constructed were telephone services, electrical supplies, a hospital, and quarters for the labor force. The total cost for these two years was LG3 million. Then, in 1954, work began on the harbor itself which was designed to handle one million tons of cargo annually at ten berths. These berths can handle large ocean-going vessels and plans for expansion call for ten more berths. Some 430 acres of water are enclosed by a main and a lee breakwater spaced abour 800 feet apart at the harbor entrance. These breakwaters were built with quarry-extracted stone, and are protected on both sides by a layer of selected armor stone. The main breakwater, completed in November, 1959, is 7,200 feet long; while the lee breakwater, com pleted several months later, is 4,800 feet long. 36 T*ma Harbour. (Accra : Ministry of Information, February, 1962), p. 8. 179B The berths are located along two quays, one which extends from the main breakwater (finger quay), and one which was built up along the shore. Also located on the shore are two vast sheds which house cocoa. They are connected to the berths by conveyer belts. The total cost of the harbor construction from 1954 to 1962 was some LG27 . 37 million. Tema's new industrial park. Behind the harbor, a town was planned which would serve a vast industrial park. This acquisition area, in all, embraced 64 square miles around the Tema Harbour. Plans called for agricultural development through irrigation and the introduction of new crops, the development of the fishing industry, and other * industries. The new town was planned with modern aunenities such as piped water supplies, underground sewage systems, lighted streets, well-designed houses, shopping centers, schools, oil storage areas, etc. for an eventual population 38 of 200,000. Details will be discussed in Chapter 7. 37 Ibid., pp. 8-9. 38 Jopp, op. cit.. pp. 23-24 * *AAmenitimm" refers to modern facilities to which the Africans have not been accustomed. 180 The first major industry to locate at Tema was a LG8.5 million oil refinery, GHAIP, which was constructed by 39 the Italian state controlled oil corporation, ENI-AGIP. Tema offers several economic advantages. First, it is close enough to accra <17 miles) to relieve Takoradi of a large proportion of the cargo intended for the nation's capital. Second, it is close enough to the Akosombo Dam and major bauxite deposits to house an aluminum smelter. Third, the bay has a steep shelf permitting deep water close to land. Therefore, dredging costs were kept to a minimum, and silting is not a problem. Fourth, there was a plentiful supply of rock nearby which lessened the con struction costs of the breakwaters and other works. Finally, Tema Harbour has the potential to become a ^ 40 passenger port. Administration of the harbour. Harbor construction operations were planned and supervised by Ghana's Railways 39 Tema Harbour. p. 20. 40 Ibid.. p. 8. 181 and Harbours Administration. The construction firm. Park- inson-Howard (U.K.), Ltd., was awarded the contract for harbor construction in September, 1954. Sir William Halcrow And Partners (U.K.) served as the consulting engineers. Since the harbor went into limited commercial operation in September 1960, Railways and Harbours has served as the 41 Port Authority. All cargo handling at Tema has been carried out by an indigenous, private company: W. Biney and Company (Ghana) Ltd. In a joint venture with the Government, the Biney Company set up the Ghana Cargo Handling Company and re tained a position as the minor shareholder. Cargo handling is regulated by Ghana Customs and Excise, and the Port Authority. Development and aministration of the new town at Tema was vested in the Tema Development Corporation (T.D.C.) which was incorporated by government ordinance in July, 1952. From 1953 to August 5, 1960, the T.D.C. served these two functions. However, after that time responsibility for development went to the Development Secretariat, while the 41 Ibid., pp. 10, 22, 24. 42 Ibxd.. p. 14. 182 43 T.D.C. concentrated on day-to-day management. Industries locating at Tema. Besides 6AHIP and VALCO, other private corporations and joint ventures located at Tema are a United Africa Company automobile assembly plant,a chemical manufacturing plant, a suitcase and mattress manufacturing plan (Ghanaian-owned, Gaisie West Africa, Ltd.), a metal products plant, and a fish and 44 cold storage plant. State-owned industries include a textile factory, a drydock the Kwame Nkrumah steelworks, a cocoa comples, an international radio transmitting station (Radio Ghana), a food complex, a vegetable oils plant, a clinker cement factory, several hotels, and a fishing fleet harbor. All the industries are located on a 106 acre site which was financed by the Government's Inudstrial Development Corp- 45 oration and reserved for pioneer industries. 43 Jopp, O P . cit., p. 24 ^^Ibid.. pp. 35, 37, 49. 45 K. Nkrumah, "Work on Aluminum Smelter Begins,” Speech... at Tema, 5 December, 1964, (Accra: Government Printing Department, 1964), p. 6. 183 The Akosombo dam. Financing of the Akosombo Dam and power complex has been discussed in the first chapter. A cost breakdown of this aspect of the Volta River project is to be found in Table VII. Costs for operating the dam during the first ten years are listed in Table VIII. The primary purpose of the dam is, of course, to electrify the country. Need to expand Ghana * s dectical output. From 1914 to 1965, Ghana's electricity was produced by diesel gener ating plants which were an expensive and limited means of power. In 1963 there were 58,000 consumers of eldctricity and the demand was estimated at 35,000 kilowatts. The supply came from 24 diesel generating stations. As industry in creased, the demand for power naturally increased rapidly. For this reason the Akosombo Hydro-Electric Dam became a necessity and its output has now replaced that of the 46 diesel generators. The power grid. The power output of the daun is distributed by a 500-mile, 161,000 volt transmission line operating in a loop through central and southern Ghana. Known as the Volta Grid, it links Akosombo with Tema, 46 William Danquah, "Power-Blectricity", Ghana Re constructs (Accra) Vol. 3, No. 1, 1963, p. 8. 184 Accra, Takoradi, and Kumasi. The future will see an over head line from Kumasi, north to Tamale and Bolatanga. Also, plans have been made to link up neighboring countries with Ghana's power. It is estimated that Togo and Dahomey could take about 50,000 kw., while the Ivory Coast could consume the same amount. Also, power lines may 47 one day extend up to Upper Volta. Commercial operation of the dam. The dam commenced commercial operation on September 1, 1965, using the first of its 128 megawatt (147 megawatts at full load) generators. At three-month intervals, the second, third, and fourth generators were commissioned, bringing the power output up to 512 megawatts (588 megawatts at full load). Plans call for the installation of the fifth and sixth generators in 1970 and 1974 respectively. The Dam will then have an ultimate power capacity of 768 megawatts (882 megawatts at full load). These generators will be added as demand grows 48 generally, and as the Tema smelter increases its capacity. During the next decade, the Tema smelter will be 47 Ibid.. p. 10. 48 "Power Today from the Volta," in New York Times (Supplement) entitled Ghanai Symbol of Progress. September 19, 1965, p. 2. 185 Akosombo ' s largest single consumer and will gradually pur chase up to 370,000 kilowatts (See Table IX). Revenues from the sale of power will cover the cost of the public utility aspects of the project including the increased power develop ment. Thus, the entire Scheme will be self-liquidating over a period of fifty years. Beneficial economic effects of the dam. The power output of the dam is the primary, but not the only purpose of the dam. Many economic advantages are being derived from the completion of the Akosombo Dam. These subsidiary pro jects were first outlined to Ghana's Parliament by President Nkrumah on February 21, 1961. First of all, the power and transmission system pro vides a means for Ghana's rapid industrialization because power is available for sale to industry. Electricity is the basis of industrialization. The aluminum smelter at Tema, providing a new major industry for Ghana, is the second advantage, since this aspect of the Project is being conducted by private in dustry, it will serve to develop the private sector. Ad vantages to Ghana are: (a) the smelter will employ 1500 Ghanaians; (b) it will be paying company taxes to the 186 TABLE VII THE COST ESTIMATES OF PARAGRAPH 17 OF THE WHITE PAPER (1961) LG General features (compensation, and resettle- ...6,241,000 ment, health measures, and the Volta Authority Akosombo dams, power plant, township, access roads, including allowance for engineering, supervision, and contingencies ...... 42,772,000 Transmission system Akosombo-Tema-Semlter Accra...... 5,814,000 Interest payable on loans during construction, and working capital for initial operation .... 6,325,000 Transmission system beyond Accra, including additional interest during constructionand working capital...... 9,490,000 TOTAL...... LG70,642,000 ^^A.B. Futa, "The Volta River Project," The Economic Bulletin, (Accra), Vol. 5, No. 1, May, 1961, p. 4, 187 TABLE VIII THE ESTIMATE OF TOTAL ANNUAL CASH CHARGES 50 DURING THE PERIOD 1965 - 1977: Years Loan Plant Operating Total Annual Servicing Addition Costs Charges LG LG LG (millions) 1965 (3 mos.) 831,000 200,000 1,031,000 1966 3,328,000 800,000 4,128,000 1967 M 600,000 4,128,000 1968 W 800., 00 0 4,128,000 1969 M 800,000 4,128,000 1970 "<5th 1.0 800,000 5,128,000 generator and turbine) 1971 ## 2.0 800,000 6,128,000 1972 N 880,000 4,208,000 1973 M 880,000 4,208,000 1974 " (the 1.5 880,000 5,708,000 generator and turbine) 1975 ## 1.5 880,000 5,708,000 1976 II 960,000 4,288,000 1977 H 960,000 4,288,000 50 Ibid., p. 8. 188 TABLE IX THE SUPPLY OF POWER TO VALCO UNDER 51 THE MASTER AGREEMENT Year Maximum block of Power to be made available to the Smelter 1st Year after Permanent Delivery Date 158,000 kw 2nd Year after Permanent Delivery date 210,000 kw 3rd Year after Permanent Delivery Date 315,000 kw 4th Year after Permanent Delivery Date 370,000 kw max. under certain conditions. 51 Ibid., p. 9. 189 Government of Ghana once its pioneer company relief period is over; and (c) VALCO will be buying about LG2.5 million worth of electricity per year from the Volta River Author ity. Third, Ghana's foreign exchange will increase as a result of the operations of the Smelter. Ghana, in effect, will be exporting electricity and the productivity ofher workers in the form of finished aluminum ingots. Fourth, the creation of Lake Volta provides a new mode of cheap transportation to the Northern Region* a waterwy. The result hoped for is a brisk trade between cattle from the North, and bulk materials in the south. A further aspect is that iron ore deposits in the North east of Ghana can be exploited to provide the raw material for a ferro-manganese plant and iron smelter. The creation of a very large source of fresh fish is a fifth advantage. It is estimated that the Lake eventually can provide up to 10,000 tons of fish annually. Thus, Ghana will build up an internal fishing industry for domestic consumption. A further advantage is that about six hundred square miles of land around the shores of the new lake are being 190 flooded each season at the high water mark. This will prove conducive to the cultivation of crops such as rise and will help increase Ghana's domestic food production. The expected increase of tourism around the Lake region accompanied by the favorable influx of foreign currency is yet another advantage. The Volta Hotel was 52 built in anticipation of this new industry. Sir Robert Jackson pointed out additional features. For example, the power can be used to activate pumps which could irrigate virgin lands. In this area the United Nations Special Fund and the Food and Agricultre Organ ization have been carrying out trial farming in the north and one the Accra plains. Sugar and rice appear to be the best possible crops. Next, there will be ample supplies of fresh water available for domestic consumption in Accra and Tema, and also for industry. In this field, the Un. Special Fund and the World Health Organization have been conducting detailed surveys to determine future needs and to recommend the best ways of meeting them. Health and sanitation conditions will be researched and improved. A hospital has been opened at Akosombo, and 52 Nkrumah, in Ghana, Parliamentary Debates * Official 191 the incidence of river blindness shôuld be reduced. Other advantages accrued from the Project are the large number of skilled workers who have been trained on operations at Tema and Akosombo. Also, the trunk and feeder roads which have been built in the heartland for the projects have stimulated new economic activity there. Finally, the resettlement of 80,000 people will mean, in many cases, a change of livelihood and new possibi- 53 lities for developnent. The Tema smelter..construction of the smelter. In June 1964, Kaiser Engineers International, Inc. the con tractor selected by VALCO, began to move equipment into Ghana with which to construct the smelter. First, 250 acres of rolling plains had to be levelled. This task was accomplished by a sub-contractor, Parkinson-Howard, at a cost of LG240,000. Also, a new channel had to be dredged in Tema Harbour along the lee-breakwater to a width of 250 feet and to a depth of 34 feet. A second sub-contract thus went out to Rèports. Vol. 22, No. 8, 22 February 1961 (Accra: Government Printing Department), pp.129-132. 53 Robert Jackson, "The Volta River Project", pp.158-160. 192 Ackerman and Van Haaren for the aunount of L6380,000. This task was accomplished between June and December, 1964. Proposed commercial operation of the smelter. On December 5, 1964, smelter construction was inaugurated. The smelter complex was scheduled to start producing aluminum on a commercial basis by April, 1967. The total amount of material required to build the complex weighed 156.000 long tons. It came from all over the world in 30 ships. The labor force required for the smelter has been 4.000 Ghanaians and 385 expatriate technicians. Many of the technicians are non-Americans who have worked on Kaiser smelters elsewhere (e.g. India). The complex, when finished, will consist of 45 in dividual buildings, and will employ up to 1,500 Ghanaians. The initial capacity will be 78,000 short tons of aluminum per year. By 1969, when Step I of the VALCO smelter should be complete, production will be about 103,000 short tons per year and the plant will utilize 200 megawatts of electricity from the Akosombo Dam. By 1973, when Step II is scheduled for completion, the aluminum output per annum should be 54 "Smelter Takes Shape," (Accra) Evening News. Mav 19, 1966, 193 115,000 long tons, or 141,600 short (U.S.) tons with a consumption rate of 300 megawatts of electricity. At this level of consumption, VALCO will pay the Volta River 55 Authority LG2.5 million per year for its power. Step I of the smelter is estimated to cost L643.5 million, while step II will probably cost an additional L610.5 million. Thus, in all, implementation of the aluminum smelter will cost VALCO about LG54 million, or $150 million. Explanation of the smelting process. The production of aluminum is a complex three-step process. Briefly, bauxite ore must first be extracted from the ground, and then refined into alumina by a costly and time consuming chemical process. The result is a white powder which is a combination of aluminum and oxygen. Finally, the alumina is smelted by electrolysis in a reduction pot. Here, the oxygen is removed. It is this third stage which the Tema plant will undertake. The result will be aluminum in ingot 55 Jopp, OP. cit., p. 57. 56 Ibid. 194 form. Later, these ingots can be re-shaped into various 57 useful forms such as aluminum sheeting. Initially, Kaiser and Reynolds plan to extract the bauxite from Jamaica, which contains the largest bauxite deposits in the world. (See Table X for Jamaica's bauxite and alumina output.) The bauxite will then be shipped to Louisiana where it will be converted into alumina. The alumina, in turn, will be shipped to Ghana for the final stage. At Tema, the alumina will undergo electrolysis in VALCO's reduction pots of which there will be four initially and six ultimately. These pots, or potlines, require a large amount of cheap electricity (about 15,000 to 20,000 kilowatt hours for one ton of aluminum), which is available, of course, from the Volta Dam. It might be noted here that because of this final stage, the aluminum industry requires 58 more electricity than most industries. Relation gf the smelter ^ the Akosombo dare. High consumption of the dam's electricity will enable the V.R.A. 57 "The Tema Smelter," (Accra) Evening News. May 12,1966, 58 Edward Marcus, "Africa's Aluminum Schemes: An Asses- ment of Prospects," Africa Report. November, 1960, pp. 3-4 195 TABLE X 59 JAMAICAN FOREIGN TRADE STATISTICS: EXPORTS Commodity Unit of Quantity Value Quantity (L - $2.80) 1954 Bauxite ton 1#782,103 L3,086,392 Alumina ton 124,115 2,899,471 1961 Bauxite ton 4,974,802 13,058,856 Alumina ton 703,483 16,885,188 1962 Bauxite ton 5,986,678 15,715,031 Alumina ton 627,645 14,442,654 1963 Bauxite ton 5,161,568 13,550,166 Alumina ton 725,613 15,951,199 59 Jdnaida, Department of Statistics# Extenal Trade of Jamaica# 1963. (Kingston: Government Printer# 1963) # p. 23. 196 to repay the loans committed for the construction of the dam over a long period of time. A further advartage is that the aluminum produced will satisfy domestic demand (which is growing but not great) and will thereby help Ghana relieve imports. Domestic demand in Ghana is already great to such fin ished items as aluminum rrofing and siding. One company has already established itself in Tema for the purpose of pro ducing aluminum sheeting, and household goods using local ingots. This is the Pioneer Aluminum Factory, a joint state- 60 private enterprise. Yet even after domestic demand is satisfied htere will still be a large surplus which can be exported to meurkets in Africa and elsewhere. Kaiser plans to export mainly to Western Europe since its domestic, Caribbean, and Latin American operations are presently adequate for America's demands. One economist estimated that Western European markets for aluminum would more than treble in the decade 61 1960 to 1970. 60 "Geared for Growth," New York Times (Supplement: Ghana: Svmbol of Progress. Section 12), September 19, 1965, p. 5. 61 Marcus, og. cit., p. 14. CHAPTER VI THE LEGAL ASPECTS OP THE VOLTA RIVER PROJECT The purpose of this chapter is to describe the international legal aspects of the Volta River Project. The Master Agreement and related agreements are prime examples of what some legal writers call international economic development law. The First part of this Chapter deals with the theoretical aspects of such law; the second part is an explanation of the Volta River Project agreements. I. THE NEW CONCEPT OF INTERNATIONAL ECONOMIC DEVELOPMENT LAW As more and more economic development projects, such as the Volta River Project, come into being new rules and precedents are established which effect international law. Several writ ess on the subject have identified these new structures as the international law of economic develop ment. In this case, a private international business firm exports its capital and technology to a developing nation under a business-to-government agreement. Traditionally, the activities of private business firms abroad have been 198 in the realm of private international law, or the conflict of laws. But many writers on the subject now claim that such activities should be placed in the public sector due to their increasing international responsibilities. dpinions of Wolfgang Friedmann. One of the most ardent advocates of this concept is Wolfgang Friedmann. According to Friedmann, private companies are now parti cipants in the evolution of modern international law; that is, they have become subjects of international law: They now participate, to an increasing extent, in mixed international transactions, to which governments or public international organiz ations are also parties. These transactions form part of the rapidly developing inter national economic law which blends elements of public and private law, in the evolution of the principles governing international trans actions, particularly in the field of inter national financing, foreign investment, and generally of economic development. The public law character of these relations, and of the participation of private corporations, is underlined by the increasing resort to arbit ration agreements, in which the private party and the government party are given equal standing before an impartial judicial forum. These developments point towards a further stage in international legal organizations, when private economic activities, now entirely exercised by private corporations, willl call for public executive and judicial control and, as a corollary, grant to private corporations legal standing before the international control 199 authorities, both of an executive and of a judicial character.^ A rough definition of international economic devel opment law, according to Friedmann, would be a body of principles regulating relations of developing countries with foreign investors and with national or international public development aid institutions, along with principles of control over natural resources, the status of foreign investors, the legal character of concession agreements, and the principles of compensation. Again: A more complex problem is the status of inter national transactions between the governments on the one part and private investors onthe other. Here, the motivations and purpose on the part of the private investor, usually a "multi-national" corporation, are essentially commercial, i.e. dominated by the commercial profitability of an operation within the context of the corporation's total business. But, on the government's part, the purpose is essentially that of using the best available means for the development of the national economy. Usually, these agreements form part of a long-term national economic development pbn, and many of them are in part financed by loans from a public, national or international aid agency. It is in the content and purpose of the mutual rights and obligations that the modern economic develop ment agreement differs decisively from the Wolfgang Friedmann, The Changing Structure of Inter- national Law. (New York: Columbia University Press, 1964), pp. 230—231. 200 traditional concession agreement. These agreements are now typically marked by a series of obligations on the part of the investor - and corresponding promises and permissions on the part of the host govern ment - designed to foster the national development agreements are built into five- year or other national development plans which is int turn form the basis for inter national laon requests made the World . Bank, or AID, or other public aid agencies. Opinion of Karl Lachmann. Similar comments on the s subject have been made by Karl E. Lachmann, a United Nations legal advisor: No longer limited to relations between govern ments or even those between governments and foreign citizens, international law is coming to encompass also those private international activities of individuals and companies which are characteristically affected with apublic international interest. These are activities which, individually or in their totality, have an impact on vital interests and policies of the foreign countries to which they extend and thus impinge upon relations between these countries and the home countries of the enter prises involved. The field of private international law...finds its sources less in the limited boÿ of relevant international treaties and of decisions and actions of international organizations than in the practices of international enterprises and the national laws and regulations by which 2 "The Relevance of International Law to the Process of Economic and Social Development," Proceedings of the American Society of International Law; sixtieth Meeting. Washington, D. C., April 28-30, 1966. p. 13. 201 they are governed at home and abroad.^ II. THE VOLTA RIVER PROJECT AS AN EXAMPLE OF INTERNATIONAL ECONOMIC DEVELOPMENT LAW IN PRACTICE The Volta River Project offers a good illustration of the international economic development law principles. The Project was implemented by a series of complex legal agreements. Principles of Agreement Between Ghana and Valeo. 1960. The first major agreement, between the Government of Ghana and the Kaiser Aluminumand Chemical Corporation, set the terms under which the aluminum smelter would be organized. This document, called the Principles of Agree ment, was signed on December 16, 1959, by Kaiser's Pres ident, D. A. Rhoades, and Dr. Nkrumah, and called for the establishment of the Volta Aluminum Company (VALCO). VALCO would be a limited liability company, sponsored and incor porated in Ghana for the purpose of building an aluminum semlter at Tema. It would be eüale to act as an entity 3 Karl E. Lachmann, "The Role of Inatnational Business in the Transfer of Technology to Developing Counties," Proceedings of the A.S.I.L.i Sixtieth Meeting. April 28-30 , 1966, pp. 31-32. 202 representing whatever consortium of aluminum companies might decide to participate. VALCO was designed to accept alumina from various companies and turn into aluminum, for which it would be paid a "tolling charge, " representing 56% of the ruling world price for the metal. The Ghana Government on its part would undertake the initial development of power on the Volta River tbrought the construction of a dam, power house, and transmission system, and would guarantee to make 4 available a pre-determined power supply to the smelter. The Principles of Agreement were the starting point for detailed negotiations between VALCO and the Government of Ghana which were conducted during 1960, and which ended on November 17, 1960 with the informal signing of a com plex of documents known as the Master Agreement and its scheduled documents, by Minister of Finance Gbedemah and 5 Mr. Edgar Kaiser. The Master Agreement set the terms which covered the smelter, its financing, and the Akosombo 4 Robert Jackson, "The Volta River Project," Progress. Vol. 50. No. 282, 4/1964, p. 154. 5 Ghana, Parliamentary Debatesi Official Report.Vol. 22 No. 8, 21 February 1961, p. 135. 203 Dam and its financing. When the Master Agreement was for malized and executed on February 8, 1962, in Washington, it was comprised of some twenty contracts and involved agencies of the Ghanaian Government, two loan agencies of the U.S. Government, the I.B.R.D., the U.K. Governmeht, and VALCO. Ghana government white paper. 1961. Speech by. Nkrumah in defense of white paper. The basic terms of the Master Agreement were set out in the Ghana Government's White Paper of 1961. The White Paper «as submitted to Parliament on F^ruary 20, 1961. Then, on February 21, President Nkrumah appeared before Parliament to make a one-hour speech asking for approval of the Master Agree ment, In introducing the motion, Nkrumah stated that: I am aware that in certain quarters there is doubt regarding the sincereity of the Govern ment's wish to encourage, as part of the over all development of Ghana, the private sector of the economy. The establishment of a smelter will cost its owners in the region of LGIOO million. For so large an investment special arrangements are necessary and this House will be asked specificially to approve the terms of the agreement which is to be entered into between the Government and the Volta Aluminum Company Limited to be commonly known as VALCO. It will, however, be noted that the Govern ment's agreement with Valeo provides for certain simple changes in our legMation, which have already been approved by this House, and that the general provisions of our law are such that a private company is sufficiently en- 204 cour aged to undertake so very great an Investment, When it is remembered that this private company has been formed by some of the world's greatest producers of aluminum, this willingness to in vest in Ghana's future at once gives lie to those who would wish to cast doubts on our in tentions. The smelter will employ about 1,500 persons when in operation; once its pioneer company relief period is over. It will be pay ing company teoces to the Ghana Government; and Company will be paying to the Volta River Authority nearly LG2^ million per year for electricity. The Master Agreement beitween Ghana and VALCO is designed to provide the conditions under which the smelter and, later, the alumina plant and buaxite mines would operate. It includes provisions for VALCO to provide the necessary finance and to construct a smelter; the rate of expansion of the smelter ot its initial planned capacity of about 135,000 long tons of ingot per annum, con suming 300,000 kilowatts of power continuously; and the establishment of special trust arrange ments for these funds to ensure that VALCO's obligations are met. It provides for invest ment in the power project by the Government; for the establishment by the Government of a Volta River Authority; for special arrange ments for charges for processing alumina; for payment for water, port facilities, and communications; for the employment and training of Ghanaians to the greatest feasible extent; for arrangenets for the application of the new pioneer relief legislation to VALCO; for tax satabilisation and for exchange control measures in regard to VALCO's earnings in foreign currency and for the execution of associated contracts. Of these, the most important is the power contract which pro vides for the long-term purchase of, and the charges for a block of the power to be pro duced at Akosombo. This power to be 205 executed by the Volta River Authority when it is established, and it is the intention to introduce, during the current meeting of this Assembly, a Bill to set up the Volta River Authority as a statuatory c corporation. The purchase of power is provided for in Article 13 of the power contract and the effect of this article in terms of revenue to the Project is set our in Chapter 5, Paragraph 9, of the White Paper; this chapter also explains the reasons for the application of VALCO of a special contract price for the sale of power. Other documents which will have to be executed are the Smelter Site lease, the Water Agreement, and the Port Agreement, the terms of which are self-explanatory and are set out in the White Paper. It will be noted thatthe Master Agreement provides for a series of transactions which must be satisfactorily concluded before the agreements can come into effect. These “trigger" arrangements are set out in Article 47 of the Master Agreement, and it will be noted that the first of these is the signification by this Assembly of approval of a formal resolution endorsing the Government's action and the conditions of the agreements. They include also the satisfactory conclusion of arrangements for financing the power project and the finalisation, on terms satisfactory to the Government, of a number of special financial and trust arrangements to be undertaken by VALCO and VALCO's shareholders. They also include the satisfactory conclusion of a tax treaty, providing for double taxation re lief «^between Ghana and the United States Govern ment. ^IBid.. pp. 129-236. 206 parliamentary debates on the White paper, prior to passing the resolution, the parliament fully debated the White paper. Several of the M.P.'s brought up some interesting points concerning the agreements. The first point concerned the Port Agreement. Mr. Braimah (C.P.P.) noted that VALCO was to construct an alumina berth and other facilities at Tema Harbour at its own expense. He felt that the Ghana Government should defray these expenses. The Government's answer was that VALCO's harbor activités should not conflict with other n unjsLated port activities. Braimah then asked whether the aluminum concessions held by West African Aluminium, Ltd. would be transferred to VALCO. The Government answered that negotiations were being conducted to that effect but there was no urgency for such a move until VALCO started exploiting 8 Ghanaian bauxite. 7 Ghana, parliamentary Debates ; Official Report, Vol. 22, No. 9, 22 February 1961, pp. 149, 185. ®Ibid., pp. 152-153, 186-187. 207 Mr. Karbo (United Party) questioned whether or n«bt Ghana would be relinquishing her sovereignty under the thirty year contract. Would not the agreement limit the powers of parliament? Finance Minister Gbedemah, speak ing for the Government, replied that without such an agrément, the foreign company would not invest its money for fear of early expropriation. Karbo followed through by asking why Ghana could not nationalize VALCO for thirty years since the Government preached socialism. Gbedemah said the Government would nationalize industries whenever it was in the national interest to do so. Finally, Karbo brought up the fact that VALCO could sell aluminum to any country, thus contradicting Ghana's policy of boy cotting countries which are either anti-African or anti- African unity. The Government answered that such restric tions on VALCO could make the whole enterprise uneconomic and unproductive. VALCO's produce should be sold wherever 9 there is a demand for it. ^Ibid.. pp. 157, 1958, 1960, 188 208 Finally, Mr. Provencal (C.P.P.), asked the Govern ment to clarify VALCO's policy of hiring expatriates. Gbedemah answered that VALCO will progressively train Ghanaian workmen, thus it would be in itsinterest to 10 repàtriate non-Ghanaians whenever Ghanaians tdc e over. Resolution of Assembly on White Paper. The Master Agreement was unanimously approved by the Assembly on February 22, 1961, by the adoption of the following resolution: Resolved: That this House approves the terms of the Master Agreement for the Volta River Project between the Government and Mr, Edgar Kaiser representing the Volta Aluminium company. Limited, and requests Osagyefo the President to conclude negotiations for the project on the general basis of the arrangements set out in the Master Agreement. Financial Arrangements of Volta Riverproject. On December 16, 1961, the U. S. Department of State formally announced its participation in financing the Volta River Project, even though some loans had been authorized previously, and others wold be released subsequently. In the end the total financial picture from outside sources appeared as follows : ^^Ibid., p. 190. 20 9 TABLE XI 12 LOANS TO GHANA FOR THE VOLTA RIVER PROJECT Lending Amount Duration of Interest Agent of Loan Rate Borrower and Date Loan (Years) I . B . R. D . 9/7/6. $47 million 25 5.75% VRA U.K.ECGD $14 million 25 6.0% VRA N.A. D.L.F. 5/61 $20 million 30 N.A. VRA D.L.F. 9/9/61 $ 7 million 30 3.5% VRA Ex-Im N.A. $10 million 25 N.A. VRA Ex-Im N.A. $55 million 20 5.75% VALCO AID 6/28/62 $55 million 20 5.75% VALCO KEY: I.B.R.D. International Bank for Reconstruction and Development U.K.ECGD United Kingdom, Export Credits Guarantee Department D.L.F. Development Loan Fund, U. S. International Cooperation Administration Ex-Im U. S.Export-Import Bank AID U. S. Agency for International Development VRA Ghana, Volta River Authority VALCO Volta Aluminium company (Ghana) , Ltd. 12 Sources: (a) international Bank for Reconstruction and Development, Press Release No. 62/9, February 8, 1962. (b) U.S. President Report to the congress on Foriegn Assistance 210 Manor Legal provisions of the Master Agreement. The Master Agreement which was signed in Accra on January 22, 1962, by Dr. Nkrumah and Edgar Kaiser set forth the terms of agreement between the Volta River Authority (Ghana) and VALCO. Its major features were the same as were presented in the 1961 White paper. They are as follows ; (1) VLACO will be a privately-owned Ghanaian company established to own and operate the smelter. Kaiser will own 90% of the shards ; Reynolds will own 10%. (2) VALCO's shareholders have agreed to purchase the aluminum produced by the smelter at a price which will cover debt service charges and operating costs including power costs. The power rate, in turn, has been established at a level which will cover debt service on the dam. (3) VALCO will pay the VRA a guaranteed rate of 2.625 (U.S.) mille per kilowatt hour. (4) VALCO will buy a minimum amount of power every year whether it needs it or not. It will take increasing quantities at specific intervals. (contd) programs for Fiscal year 1962 (Washington : Government Printing Office, 1963), pp. 65, 72. (c) U. S., Department of State, Volta River Project, prdss Release #887, Decdmber 16, 1961. 211 (5) Kaiser and Reynolds, in proportion to their ownership, will ship bauxite freon Jamaica to Louisiana where it will be processed into alumina. This alumina will be shipped to Ghana, smelted into aluminum, and marketed in Africa and the European Common Market. (6) Kaiser and Reynolds will use their own ships to transport the alumina and will only "consider the possibility" of using Ghana's Black Star Line. (7) Kaiser will pay VALCO a service charge, or "tolling fee" to compensation it for the smelting process. (8) The First National Bank of New York will act as tuustee to receive payments for the aluminum and will apply the funds directly to pay VALCO's obligations. (9) The business operations of the company and divi dends paid to its shareholders will have a ten year tax "holiday" (exemption). (10) VALCO will receive special exemptions from import and export duties on materials, machinery, and equipment related to the construction and qperation of the smelter. (11) After ten years VALCO will get special tax incentives to process Ghanaian bauxite, but initially VALCO will import alumina. 212 (12) VALCO will be free from exchange controls and similar restrictions, and the Ghana Government will provide sufficient foreign exchange for the company's transactions. (13) Ghana guarantees that the smelter will not be nationalized, expropriated, or intervened in for the duration of the agreement. After that time, thetaking of any property must be accompanied by prompt, fair and adequate compensation. (14)' VALCO will be able to employ as many expatriates as are necessary, but will employ and train Ghanaian personnel in increasing numbers to take their positions. (15) The agreement will extend for a period of thirty years at which time it is renewable for an additional twenty4- 4- years.13 Sources: a) Keith Jopp, Volta, (Accra: Volta River Authority 1965), pp. 16-, 53-54. b) "M.P.'s Unanimous for Vdta," West Africa (London), March 4, 1961, p. 227. 213 (16) The contract is to be governed by the law of Ghana as it exists on the date of execution. There fore, the Government undertook to secure the repeal of any pre-existing legislation which woild prevent or interfere with the effective implementation of the contract. (17) The agrément prohibits the creation of any discriminatory law, statute, legislation, or administra tive measure against VALCO, its shareholders, its creditors, and its employees. Such action "shall be deemed to be an act of expropriation within the law of Ghana and under inter- 14 national law." (18) All disputes over the agreement are to be referred to three arbitrators one of whom shall be appointed by each of the parties and the third by the two arbitrators so chosen. where agreement on the umpire cannot be reached, he shall be appointed, for the time being by the President of the International chamber of commerce at the request of either party. The rules of conciliation and arbitration of I. Nwogugu, The Legal problem of Foreign Investment in Developing Countries. (Dobbs Perry, N.Y.: Oceana Publica- ations, 1965), p. 170. 214 the I.C.C. are to govern the arbitration. The parties are to choose the place of arbitration, but in case of default, it shall be held in Geneva, Switzerland,^^ Financial arrangements for Tema smelter. The financial agreements between all agencies were signed in Washington on February 8, 1962. These arrangements are set forth in 16 a pictorial schematic diagram (see Illustration I) . It will be noted that the figures used here in relation to VALCO represent the expected, or minimum costs. However, it was recognized that by 1967 construction costs should rise. Therefore, a maximum cost was determined. Ghanaian sources most frequently used the minimum figures, while U. S. Government sources quoted the maximum figures. 15 Ibid. , pp. 245-246. ^^Diagram A is from: Jackson, op. cit., p. 151. .'I 4 *4.1 T Politicil Risk Guinniy of X iiier and flaynoMi Innstmant in Valeo 1 I.B.R.D UJC^GOVT U.S. GOVT ^xpoMjCREorr^ A.LO. [icAISER I [REYNOLDS GUARANTEE DEPT. EXIM BANK VOTING CURRENT TRUST. ACCOUNTS T R U S T * * 30 Yaar "Take or Pay" Contiaci to use and pay lo t Valeo's smelting Suhscrmlion Agreemertl services Hotel payments over lot $12,000.000 $1.000.000.000) w ith advance o l Valeo stock payment ol $20.000.000 tc cover part of constiuctioti costs VOLTA RIVER AUTHORITY 30 Voar FirmP o w e r Contrée) VALCO constructs and operates constructs and operates *196.000,000 Dam and Power Plant lierai payments over $200.000.000) *128,000,900 Smelter SPECIAL FUND .Co n tributes shareNames all for educational and .Contributes shareNames social projects 'of Earnirrgs in Ghana GOVERNMENT S98.000.000 Investment to cover} construction OF GHANA Master Agreement covering tax rates, import, costs. I Also guarantees VRA Loans) export, exchange rights and duties, potl. water and land rights. Ireedam from expropriation etc. VOLTA Schematic Diagram RIVER of Principal Agreements PROJECT Executed Feb. 8th 1962 FINANCING * Morgan Guaranty Trust Co., Voting Trustee - if Valeo fails to build smelter, voting trustee replaces management until construction completed. \* * First National City Bank of New York, Trustee Handles all payments by Kaiser and Reynolds to Valeo, payment of Valeo expenses and taxes, and retains balanee in New York. I '. i 'Y/ ?(#' :.a,. 216 TABLE XII COST AND FINANCING OF THE TEMA SMELTER^^ (Millions of U. S. Dollars) Total Minimum Maximum Total 128 164 Export-lmport Bank Loan 48 55 AID Loan 48 55 Kaiser/Reynolds contribution 32 54 Equity Stock 12 12 Prepaid tolling charges 20 42-44 Note; Kaiser/Reynolds finances will buy $12 million worth of VALCO stock as an equity investment. The prepaid tolling charges ajs an advance which will later be "kicked back." Related Legal Provisions, Ghana Rioneer Industries and Companies Act. VALCO received tax relief under the pioneer Industries and Companies Act of 1959. Under this act, VALCO received pioneer Industry status which is defined as follows ; 17 U.S., Congress, Senate, Committee on Foreign Relations, Foreign Assistance Act of 1962. Hearings... (Washington: Government printing office, 1963), pp. 137-138, and Jackson, 0 £. cit., p. 155. 217 Pioneer Industries are those industries which are not being carried on in Ghana on a scale adequate to the economic needs of the country and for which the Government considers there are favourable prospects for further development. Companies which assume this status must be incor porated and resident in Ghana. VALCO received what is known as a "tax holiday" in many of the developing nations. Ghanaian legislation explained this termy Tax holiday starts on the date when the pioneer company commences its trade or on its first production day (i.e., on the day onvhich the company produces marketable quantities of the particular product) whichever is earlier, and continues up to a maximum of five years for ten years under the capital investments Act of 1963, during which time it is entitled to relief from tax equal to the tax chargeable on the income in respect of its pioneer business.1^ U.S. Investment Guarantee. Kaiser and Reynolds' investment was protected by the u. S. Investment Guarantee program. On September 30, 1958, the U.S. and Ghana signed an agreement covering losses due to either inconvertability of currency or expropriation. To date, no agreement has been signed covering losses due to war, revolution, insurrection, or extended risk. 19 Ibid., p. 5 218 Issued on August 31, 1961, the Development Loan Fund guaranteed $54 million plus retained earnings against losses due to inconvertability of currency and expropriation for 32 years. The receipients of this guarantee 20 were, of course, Kaiser and Reynolds. U.S. - Ghanaian Agreement on Taxation. Finally, American expatriates working for VALCO in Ghana were protected from double taxation by both governments through a convention which went into effect with the Master Agreement. zo U.S., Congress, Senate, Committee on Foreign Relations, Foreign Assistance, 1965, Hearings ... March 9- April 7, 1965. (Washington ; Government printing Office, 1965), p. 534. CHAPTER VII SOCIOLOGICAL ASPECTS OF THE VOLTA RIVER PROJECT A projefct as vast as the Volta River Scheme will of necessity, affect millions of people. Indirecdy, Ghanaians will feel the impact of electrification, increased transportation into the hinterland, and the increased demand for skilled labor. Directly, Ghanaians have been affected already by the inundation of Lake volta and the creation of Tema Harbour. The former forced 80,000 people to be relocated in resettlement towns. Having lived in a traditional-tribal state, these large groups could hardly have ignored the advance of modernization and indus- trializ at ion. This chapter will briefly analyze Ghana's efforts at community development associated With the Volta River project. First to be considered is the nawindustrial town built from scratch at Tema. Here, it will be seen how Ghana has tried to substitute income-oriented associational groups for tribal=oriented groups. The second and third studies involve 220 the resettlement schemes for the original inhabitants of Tema and the people displaced by Lake volta. In the latter cases it will be seen how attempted social changes were less radical but still involved efforts at modernization. The affects of the volta project in Ghana. Although Ghana's cities were not as greatly effected by the Akosomob Dam, since electricity was already provided by diesel run generators, their populations still grew as the construction "fever" continued on both econojically sound and unsound projects. In the post-war era Ghanaians have flocked to the cities. Their ability to serve as skilled laborers, efficient farmei:^ successful traders, and artisans has earned for Ghanaians the highest pe r capita income in all of Africa. Characteristics of the West African City* The typical West African city has evolved without specific long-range planning. It is composed of diverse ethnic and tribal sub-groups, as well as Europeans, Lebanese, and educated Africans. The resultirg societal organization is one of fragmentation. In the labor markets, the general 221 tendency is towards ethnic and tribal specialization. The Europeans are found largely in the supervisory and managerial occupations, while the Arabs and Asians engage in commerce. i? The A ricans tend to enter occupatins which are common to their fellow tribesmen. For example, in Accra the majority of farmers and fisherman are GA or Adangme, the semi-skilled and skilled workers for the manufacturing industry are supplied mainly from tribes in southern Ghana and Ashanti while the educated workers in clerical, executive, and admin istrative posts are provided by tribes from southern Ghana, Another characteristic is a higher incidence of woemn engaged in trading than men. Exceptions to these categories 1 are, fo course, not unusual. Professor Kenneth Little, a British sociologist, summarized the social characteristics of a West African town: There has been an adaptation of the tribal sptem to the factors and forces intorduced by European colonialism. This has involved a i^ecializati on of the older traditional system in terms of the embryonic development of social classes, and of the modern functions of voluntary association and of the nuclear family. Kenneth Little, "West African Urbanization as a Social Process," in W. J. Hannah, ed., Independent Black Africa, (Chicago: Rand McNally, 1954 ) , pp. 140-141, 146. 222 The modern West African town is the concrete expression of this adaptation. It is the product of outside forces, but its principal links, socially as well as culturally, are with its own hinterland. From the latter, the town draws its vitality as well as its popula tion and hands over in return the new institu tions which have developed in the urban environment. These exchanges take place through trade and through the movement of migrants in and out of the town, involving town and countryside in a far-stretching network of personal ties and reciprocal obligations. The result is that West Africa urbanism is a part of a much wider social process than te settlement or re-settlement of large groups of individuals under new conditions of life and labor. It is tite nucleus of a whole corpus of customs and practices which is gradually un folding in rural society within the same social system as that of the town.^ _ The Community Development Scheme at Tema. The original plan of a harbor grew from designing a town, to an area development scheme. A variety of industries were encouraged, thereby reducing the dependence of a vast housing estate Solely upon the activities of the harbor. Area planning hoped to reduce the possibilities of squatter settlements between Tema and Accra, and north of Tema. For this reason, the government purchased sixty-four square miles 2 Ibid., p. 148. 223 of coastal property from the chiefly stools of Tema, Kpone, and Nugua, consisting of a ten mile strip, extending about seven miles inland. The community development scheme will provide for 200,000 people in twenty to thirty years, and it is expected that the suburbs of Tema and Accra will eventually meet (Tema and Accra being 15 miles part) forming a Metropolitan Area. The final goal of this planning is to establish Tema as the commercial and industral center of Ghana, while Accra fulfills its role as the seat of govern ment . The intermediate goal is to house about 100,i000 people with all the amenities of modern life. When the aluminum smelter and other industries atTemafs industrial park become faully operational, the population is expected to increase to 200,000. However, in 1961 the estimate was only 40,000 \ 4 inhabitamts. The first problem was to plan for small well integrated communities in order to take into consideration the basic unit of community life,the family. Howeder, it was recognized ^Keith Jopp,Tema, (Accra: Ministry of Information, Development Secretariat, 1961), p.8, "^Ibid., p. 8. 224 Tema would attract, more often, the nation's youth from rural areas, thereby disrupting the basic family pattern. Therefore, new relationships based on income and 5 occupation would have to be created. The next problem was to reancile the high standards of housing and services with the relatively low income of the migrants. Eighty per cent of the population would require dwellings of less than L 200 per room, but they would also need considerable outdoor space for numerous domestic activities which are performed, by cuxstom, out in the open. Thus, while the relatively high development site costs would require high population densities, the need for low construction costs plus the need for open space would require a high proportion of single story structures. Special problems to be considered included privacy, orientation to the cool southwestern breeze, means of access and the best possible use of sites.^ The esthetics of construction was another factor to be considered. Most of Ghana's tradi,tional building materials, such as thatch and swish, are temporary and ^Ibid., p. 24. ®Ibid., p. 28. 225 impractical for permanent structures. Therefore, a new architecture had to be devised which would conform with the availability and cost of imported materials, take full advantage of local materials, and still relate to the habits, customs and incomes of the people. To meet these problems an overall town plan was proposed and approved as a first step, it provided fbr a neighborhood unit consisting of 3,000 to 3,500 people. This number corresponds to the population of a typical Ghanaian village and justifies the provision of a basic social services such as a primary school, a church, shops, a marketplace and a truck parking lot (for the shopping center), These neighborhood units are grouped in fours to form a community. Each community )f which seven are planned) will have a population of 12,000 to 15,000 which will again justify advanced community services such as shopping centers, barks, service industries, and middle schools. Each will have a community center with sports fields, entertainment facilities, a welfare clinic, a nursery and it will contain a cross section of all income and social groups. Further, the community will have an industrial area,an 7 oil storage depot, and a town center. 7 Ibid., pp. 28, 30. 226 Finally, these seven communities will be joined by others to form three main communities. tWs will be implemented in phases with a target date of 1985. The construction and planning of Tema came under the Tema Development Corporation. Actual construction was started on Community No. 1 in 1955. One of the first diffi culties which the planners faced was the provision of housing for families with a range of incomes from L J.00 to L 3,750 per yeear. This problem was solved by dividing the houses into four main groups. The largest group, the low income group, was the first to be considered. By the end of 1957, over 1,000 of these dwellings were completed along with 111 of the higher income dwellings. After that year construction progressed rapidly. By 1960, about 2,000 dwellings had been completed ranging from three bedroom detached houses, through multiple story blocks of maisonettes to bungalows and single-story terraced blocks. The community had been provided with three primary schools accommodating over 2,000 pupils, a middle school for 366 pupils, a day nursery for 100 children, a maternity unit, sixty-four shops, fifty-six offices, twelve craft shops, two restaurants, a large number of open and lock-up 227 8 market stalls, and a sockal center. In the meantime, community #2 was started, and by July, 1961, over 2,000 of the lower income group (groups three and four) dwellings were ready for occupany. Shortly, thereafter, an outpatients' clinic was completed, and a Æesel-run power generator was installed to give Tema a capacity of 14,270 k w . ^ This, of course, has been replaced by the output of the Akosombo power station. However, e/ery dwelling is wiered for electricity and evay road is lit electrically. Also, a reservoir was biilt Xcapacity: 2 million gallons) and pipe was laid which would carry sewage one mile out to sea. Also carefully planned was storm sewer drainage, underground telephone lines and electrical cables, and road and rail communictions. Finally,the industrial park was located at a site to the east of the residential zone to allow smoke, dust, noise and odors to drift harmlessely 9 away from the town over open land to the north and east. The Tema community development was designed to give the impression of order without regimentation, and of standardization without monotony. The building materials ^Ibid,, pp. 33, 35, 228 finally used for the residential area were color washed sandcrete blocks, local hardwoods, aluminum and asbestos cement roofing, fixed and movable glass and timber louvers, wood strips, and thermo-plastic floor finishes all used in different combinations to avoid sameness. Tema is currently populated by a number of different African peoples including Akans, Gas, Ewes, Northern Ghanaians, Nigerians, Dahomeyans, Togolese, and Ivory Coast peoples in that order. These ethnic groups have settled in Community No. 1 and are represented throughout the town. These people have access to such recreation facilities as YMOV W C A , Tema Boys' Club, tennis, football, golf, cinemas and social centers. Resettlement of Tema ' s indigenous Inhabitants . Tema proper made provision for the thousands of Ghanaians who were expected to flock ihto the town in search of economic opportunity. Thesemigrants would come gradually and voluntarily. However, Tema's construction posed another problem: the indigenous Tema people. The problem stemmed from the fact that the entire coast was occupied and utilized by local fishermen from ^^Ibid., pp. 37-38. 229 Accra 80 miles east to the mouth of the Volta River. If a new harbor was to be built close enough to serve Accra and the Akosombo Dam, someone would have to be displaced. These fishermen lived the traditional way of life using inefficient methods to bring in their catch. Since the waves broke on the shore, they had to use outrigger canoes to get past the surf. This method, aside from being hazardous, also limited their catch. Tema, seventeen miles east of Accra, was chosen as the harbor site because it was a lagoon. Hower^er, it was inhabited by 4,000 Ga-speaking people who had been there since the eighteenth century. As the construction at Tema got underway, it was realized that soon theze people woikd have to be replaced, because the new shore installation and the road and railway would cut their village off from the coast. Then, they would have to be rehoused, and new fishing and farming facilities 11 would have to be provided. Resettlement unsually means a hardship of one sort or another. Old associationsand customs must be broken. At ^^Ibid., p. 39. 230 Tema these ties to the past were particularly strong since they involved many sacred places and beliefs which had been perpetuated for the generations. A previous resettlement of Sakuma voilage had gone smoothly but it had only involved 1,000 people. This mo've was made to make way for the new railway and road links with Accra. But Tema involved a larger number of people. The 1956 census indicated 4,000 people, but by 1960 it had grown to 10,000. The suggestion of resettlement met strong opposition from the villagers who pointed out that by tradition "the Tema people must always dwell within the protective arms of the two lagoons, Chemu on the east and Sakumo on the west." This was unsatisfactory to the Government who wished among other reasons, that the village retain its individual character. Therefore, the decision was made to remove the people to the east of the chemu lagoon near the new fihhing harbor with 12 its sheltered canoe beach. The decision was met with indignation and even outright violence. In an article on traditional authority and social action, American sociologist St. Clair Drake, wrote of the experienced corps of Community Development Officers from ^^Ibid., p. 40. 231 Ghana's Department of Social Welfare and Community 13 Development, These men are trained to carry out programs of the village level. Quite often this means convincing the traditional chief to iedd or play a role in a community developement project. Enlistment of the chief's support means success for the program. Cooperation with the traditional authority is given the highest priority. Although chiefs are relatively poerless in Ghana, participation in the community project enhances his prestige. Also, he has the power to make or break a project since self-help is stressed in every program. The basic philosophy of aself-help community development program is that; the initiative shoùld come from among the people themselves and that there must be a process of stimulation by the community development organization to break down apathy and to show people that what they want can be provided if they are prepare^^to listen to new ideas and to help thamselves. ^^St. Clair Drake, "Traditional Authority and Social Action in Former British West Africa," in W. J. Hannah, ed. Independent Black Africa (Chicago: Rand McNally, 1964). 14 Ibid.,pp. 311, 312. 232 To break the impasse with the Tema villagers, the Government sent in a resettlement team from the Depa rtment of Social Welfare and Community Development that talked to the villagers in their homes and attempted to meet their objections with reasonable alternatives.Special prototype houses were designed and built for the village elders to 15 approve and the terms of compensation were negotiated. The villagers were finally convinced of the material advantages of the program and on April 1, 1959, they began to move into their new homes which had been built for them. A key element in the move was when the Tema Mantse himself moved With his entire family a few weeks before April 1. The Mantse was the traditional head of the village and the enlistment of his support conforms with Drake's description of earlier situations : In construction projects at the village level, the cooperation of the chief is essential in securing a full and regular turnout... The chief’s role in community development will vary, of course, with the personality of the individual. Sometimes he initiates an activity. ^ ^ il l i e M. Haywood, Jr., "The Volta River Project and the Problem of Resettlement," Masters Thesis #M666 (unpublish ed), American University, 1964, pp. 37-38. 16 Jopp, Tema, op. cit., p. 41. 233 more often, perhaps, he simply climbs upon the bandwagon which the more literate or energetic of his subjects have set a-rolling. But there is general agreement that a chief's support, whether in the form of quiet approval or active participation is essential, to the successful outcome of most projects.17 Departure from the old village was conducted with pomp and ceremony. Women sprinkled food on the ground in memory of their ancestors while the High Priest blessed the ancestral precincits. Upon entering the new village, they found that the new houses had the same amount of rooms as the old but in addition a piped water supply, modern drainage and the prospect of electricity. All heads of households who proved previous ownership in the old village reciared equivalent facilities without charge. Habits and customs were retained as much as possible. The men and women continued to live in separate compounds. Also, the old village had been divided into four quarters with a stranger's quarters for North Ghanaians and peoples from neighboring states. The new village contained four quarters with a total of about 400 houees in sixty-four compounds. ^^Drake, op. cit., p. 313. 234 An extension of 100 ten-room houses were also built to provide free accommodation for the population in excess of the 1956 census. Similar occupational facilities wereprovided, except that there was now a new canoe beach with easy access to the fishing harbor. For the farmers of Tema, 2,400 acres of fresh farmland was reserved. The new village, known as Tema Manhean, now has a maternity clinic, nursery school, two new primary schools, a truck depot, a market, and easy access to Tema new 18 town along the main road. The Problem of the Resettlement of people's Affected by the Volta Dam. The secotld major shift in Ghana's population revolved around the Volta Dam Project. As the water backed up from the dam it flooded the Volta River valley permanently and created the new man-made Lake Volta. Unlike the Tema resettlement scheme, the villages affected here were numerous and often scattered far apart. Vastly different ethnic groups dotted the banks of the river, and they could not be agglomerated into one vast housing complex. ^®Jopp, Op. cit., pp. 43-44. 235 Another difference was the necessity for a rigid time schedule. Once the dam blocked the river's flow, ununda- tion was rapid and new housing had to be waiting for those displaced. Finally, the uncertain nature of the Volta 19 project made precise planning and budgeting difficult. The result was that after May, 1962, resettlement was made on a "crash" basis. cooidLnation of the resettlement was carried out by the Resettlement Department of the Volta River Authority. Due to the size of the problem,the V.R.A. had to call on many national and international agencies. Included were the United Nations National Physical Plan Mission; the U.N.F.A.O. World Food Program; the Faculty of Architecture at Kumasi University; the Department of Social Welfare; the Ministry of Agriculture, the Ministry of Works and Housing, the Surveys Division, the Lands Secre tariat, the Town Planning Division, the Workers Brigade, and 20 the United Ghana Farmers Council Co-operatives. The main task was to resettle 80,000 men, women, and children from 700 villages. These people came from seven main ethnic groups with separate cultures and traditions. Even though their ancestral lands would be lost, they would still wish to retain their customs as ^°Ibid.. 236 in the Tema resettlement. A further problem was that some villages were so remote and inaccessible that they were nearly passed over by government officials. The main goal was that resettlement should be used to provide the people with better living conditions and instruction in more efficient farming methods. Here was a unique opportunity, furthermore, to plan and develop the area on a regional basis. Problems of implementation. The first step in resettle ment was to determine which villages and lands would be flooded. This project involved 1,000 field Workers andlOO surveyors who cut a demarcation line through marshland and forests. By September 1963 pver 2,000 miles had been cut. Secondly, buildings, crops and economic trees were evaluated, while social data was collected. One hundred social workers polled the 80,000 inhabitants with questionnaires and obtained valuable data on the social structure of the people to be resettled including the composition of their households, the number and types of their houses, farm and real property, 22 and with whom they liked and disliked to be grouped. 2^Ibid., p. 43. 22 The best study on this aspect of the resettlement project is Haywood's Thesis listed above. 237 Thirdly, outside the villages, soil surveys were taken, water wells were sought out and the people were kept constantly informed in order that the practical considera tions of good land and water would conform with their desires. Fifty two new town sites were chosen. Their construction involved clearing thousands of acres of land, drilling numberous boreholes for water, installing pumps, laying many miles of water pipe, and building 210 miles of new roads as well as rebuilding 130 miles of existing road. Then, 23 sanitation facilities, markets, and schools were provided. Housing Facilities. The next problem was housing. As mentioned earlier, Ghana stressed "self help" in its community deelopment projects. This was the original plan. However, time was of the essence, apd 12,000 new houses could not be built on an aided self-help basis before the lake 24 destroyed the existing villages. Therefore the décision was made by the V.R.A. to construct permanent housing facilities at an additional cost. Although temporary shelters would have been cheaper, it was felt that too often they quickly became permanent as has been experienced in other developing countries. 23 Jopp, 0 £. cit., p. 44. 24 . Ibid., p. 46. 238 The houses built by V.R.A. use the "core" approach. Each house conists of a concrete foundation, an aluminum roof, and four walls made of concrete blocks. This core can later be expanded simply by knocking down the walls of the one room nucleus. The individual family can redesign and repaint the hojse to its own specifications under the concept of self help. Materials and technical assistance are available from the Department of Social Welfare and community Development. The original idea for the core type house comes from a carport structure. Final designs for the standardized houses were developed at the Kwame Mkrumah University of 25 Science and Technology. The government hopes that this self help idea will be able to gradually improve the villagers standard of living, and change some of their traditional ways of life. Throgh standardization and rapid construction, the 12,800 homes were completed by November 1964. This was a phenomenal achievement as the construction began on a full time labor basis in April 1963. Success was due in part to the use of a full time labor force as well as voluntary labor supplied by the Ghanaian Army as part of a civic action program. 25 . 26 Ibid., pp. 46-48. Ibid., p. 48 239 Changes Attempted in the Agricultural Sector. During the initial transition period, the Food and Agricultural Organization provided the villagers with maize, tinned meat, sardines, oi, flour, and dried milk to carry them over until the first harvest. Dependence on F.A.O. foodstuffs usually lasted f®r about six months. However, it was often longer in areas where land had not yet been cleared when the initial move was made. In most cases, this was an opportunity for the Government to introduce 27 new, more nutritional diet to the peasants. The main effort in resettlement has been to make the farmer self-supporting in the agricultural sector. Thousands of acres have been distributed to the new settlers and effortd have been made to help them diversify tbeir crops. In each town there is a Town Manager with capable assistants who are well trained in the provision of advice 28 and technical assistance, seeds, etc. Pig and poltry farming was stressed, and it is now highly developed in many villages. Many demonstration plots and trial shemes have been set up intordueing maize, oil palm, tobacco, and citrus fruits. 27 J. LeHarival, "Chain of Stones, Sheell Magazine (London), Vol. X LV, No. 699, March 196, p. 88. ^®Ibid. 240 Also, the cooperative system has been successfully extended into these areas. It is hoped that eventually the farmers will be producing suprluses for Ghana's urban 29 markets. Mechanization has been taught to the farmer on a limited scale. Communal facilities include the use of tractors and other equipment, and the availability of oombines for maize harvesting. Mills are also being construc ted at central points in order to make feed available for 30 the livestock. In the future there is much left to be done. More schools must be built, farm buildings erected, houses ex panded, and further mechanization implemented. Many thousands of additional acres must still be cleared in order to reach thé goal of six acres for every farmer. Also, acre land must be cleared to make way for vegetable crops, tree crops, 31 pastures, pineapple plantations, and intensive stock farms. 29 Robert Jackson, "The Volta River project," p. 161. ^^Le Harival, op.cit., p. 3. 31 Jopp. O P . c i t .. p. 49. 241 Evaluation of the Resettlement Scheme. Nevertheless, Ghana's efforts at resettlement compare favorably with those of other countries. For example, there have been de cades, without any permanent facilities. Another project in Africa cost LG20 million to resettle 50,000 people. This compares favorably with Ghana's maximum estimated cost of LG8 million. To fully evaluate the long-range effects of the Volta River project on the traditional way of life of the people eresettled, it will be necessary for a team of field workers and sociologists to study the new cillages periodically. Presently, literature on this subject is not available. Nevertheless, with new living structures, new crops, and increased contenets with people from other parts of Ghana changes could hardly go unnoticed. Ghana has set precedents for resettlements elsewhere in Africa and the developing world. Perhaps more than any other aspect of the Volta River Project these resettlements changed the lives and habits of the people and have helped bring them into the modern sector of the economy. 32 Jackson,, op. cit., p. 161. 242 CONCLUSION What, then, is the significance of the case study? From an economic development standpoint, the Volta River Project was a resounding success. The details have been clearly spelled out in this case study. The Project represents a well-planned, well-financed scheme of large proportions with long-range considerations. Engineering, construction, and planning were of the highest quality. The legacy of the Volta Dam is a sterling example of cooperation between the developed and the developing nations, and between private and public assistance. How- its limitations must also be realized. First, the Project could not he expected to have solved all of Ghana's development problems in one neat package. Exports of Ghanaian aluminum will only begin to solve the problems of economic diversification and the balance of pay ments problem. Unemployment can be expected to rise sharply as more and more Ghanaians flock to the cities in search of jobs. And the Tema Smelter will not be able to absorb more than 1,300-2,000 highly skilled Ghanaian workers. Further, a continuing need for large-scale capital flows into Ghana from Western public sources has not been 243 met in recent yeara. Likewise, Western private sources of capital have been slow to answer. Therefore, Ghanaians with technical and managerial skills have had little choice but to go on public payrolls in state enterprises, rather than participating in the dynaming and competitive context of private industry. The United States policy of encouraging private enterprise to invest in Africa as a supplement to U.S. public assistance, therefore, has not yet been effective.. And, as the thesis implies, African politics have not always created a favorable investment either. The development process in Africa is a long, contin uous one that will take many more decades. Ghana has barely started. The Volta Dam Project is a clear example of how much capital can be absorbed, and how long it takes to produce one ton of finished aluminum ingot. Development cannot occur overnight as the result of a single project even one of the magnitude of the Volta River Project. This was recognized in 1963 by Averell Harriaman when he said: We have come a long way since the days when some thought that building a dam or providing come surplus food was goint to make people like us, or that it would automatically move 244 them from one century into another.^ Perhaps the most far reaching consequences of the Volta Project were the resettlement schemes and the comm unity development projects. Here, the effects of the Dam filtered down and touched the daily lives of the Ghanaian people. In the long run, conjecture would have it that this was the most significant aspect of the project since it helped to make the people in the traditional sector aware of the dirve for modernization. But, of course, this would not have been possible without the construction of the dam itself. Although the Volta Dam Project was a complete economic sugcess, Americans, then, cannot sit back smugly and gaze upon it. Africa receives the lowest priority on the U.S. economic aid list. When all was said and done, by the end of fiscal year 1965, Ghana had received more economic assistance from the Sino-Soviet bloc ($241.0 million), than from the United States ($170.4 million). Certainly, the Sino-Soviet economic offeasive was a major factor in the United States determination to give large amounts of aid to Ghana. This factor aslo best illustrates the necessity to distinguish between official ^Averell Harriamn, "Problems of the Developing Nations," U. S. Department of State Press Release #609, December 4, 1963, p.2. 245 foreign policy pronouncements and the practice of diplomacy. Despite frequent statements that our foreign aid would be given with "no strings attached" and that it would not be used to influence the policies of the other nation, it is clear that the U.S. used foreign aid, or at least the lack of it, to show its disapproval of Nkrumah's regime. However, it must be noted that U.S. assistance to Nkrumah was a factor in moderating his foreign policy stand on several occasions. If he had not received American loans for the Volta Project, he most certainly would have turned to the Soviet Union for assistance since all other Western and international acources were unwilling or unable to lend such an enormous sum. On other occasions, it was noted that Nkrumah turned apolo getic when he hwas refused U. S. Assistance, Finally, his pleasure at seeing the Volta Dam completed did tend to cause him to moderate his views in early 1966. In fact, his mission to Peking at that time was not a crusade against the West, but rather a plan for peace by a member of the "third" or neutral bloc. Clearly, several tenets of Nkrumah*s foreign policy were not held only by the radical leaders of Africa. The proof of this was when General Ankrah stated on African 246 Liberation Day, May 25, 1966, that, "The question of total liberation of Africa is not a matter of debate, it is a grim necessity for Africa...We stand dedicated to the 2 total emancipation and redemption of the African continent." Here, it was shown that foreign policy is a continum. Although the National Liberation Council has somewhat restructured the economy, de-emphasizing Marxian socialism as a goal, the bais foreign policy golas remain: neutrality in world affairs, opposition to colonialism in all its manifaestation, and support for the Organization of African Unity and its goals. What was removed the Nkrumah*s policy was the design for an African Union led by Nkrumah which resulted in the attempted subversion of other independent African states, and the search for a"neo-colonialist: under every stone. This Volta River Project case study also points to another consideration that must be included in an analysis of foreign policy formulation: the role of personality and fate. It is difficult to imagine the same successful outcome of Nkrumah*s request for assistance had it not been for the relationship of Lord and Lady Jackson with President Kennedy; and the mutual respect of Nkrumah*s and President Kennedy; the role of Edgar Kaiser and Chad 2 Ghana, Information Section, Embassy of Ghana, Press Release No. 6/66, May 27, 1966, pp. 1, 4. 247 Calhoun; the unscheduled meeting of President Eisenhower and Nkrumah; the timing of the Aswan Dam case or the Howard Johnson incident. Yet, there is one aspect of our foreign policy statements which are borne out in the study of the Project. That is the fact that American policy has long been based on the assumption that if people are left free to determine their policies for themselves, they will choose those in the Western tradition rather than those of a totalitarian nature. Although the February coup should have gone in the "wrong" directions, i.e. further towards the left, it did not do so. Instead, it demonstrated that the Africans them selves could, in their own way, determine their own economic and political destiny. The popular backing which the coup received proved the Ghanaians' thoough disguest with political oppression and economic "belt-tightening" in order to finance heavy state industries and show-piece projects. The popu lace's desire for rational economic policies was a major factor in Nkrumah*s overthrow. Although it must be assumed that the African masses have no formal schooling in econom ics, at least they know when the tightened belt is too uncomfortable. 248 Although the decision to support the Volta River Project must be studied within the context of East-West economic relations, the author believes this study raises questions aibout our policy toward a non-aligned, devel oping nation. Most nationalist leaders, no matter how vehement they are against the West, are true nationalists. From their point of ivew, the machinations of the world commodity markets, the legacy of conolialism, and the intrigues of the Central Intelligence Agency give them cause for paranoia. But recent history has shown that the leaders do not "go Communist." Toure* of Guinea, Nasser of Egypt, and Sukarno of Indonesia are just the amjor exaqpples of nationalist leaders who have given West ern diplomats ulcers by playing the game of "non-alignment. And this study raises an even more fundamental question concerning United States foreign aid policy: Would the U.S. favorably consider other projects such as the Volta Dam if the Cold War politics discussed in this study were not a factor? Ghana's Volta River Project was a prime example of the type of integrated economic development project that Africa needs. But Africa needs more U.S. aid, as opposed 249 to aid and investment from the respective former métropoles. America must make a choice. That choice is whether we will play a major role in Africa, or will simply respond to brushfire crises and Sino-Soviet economic offesives. In recent years, With major concern over Vietnam, the con sequence has been to drastically diminish non-military assistance ot ohher parts of the world. Africa, being on the low end of the priority list, has suffered greatly. And since there have been no major crises, involving the threat of Communism, to respond to in Africa since the Congo crisis of 1964, it might appear that America has largely forgotten about that great continent.^ Yet there are some encouraging signs in the air. The recent trend, as a result of Ambassador Kerry's report , has 4 been for the U.S. to encourage regional economic planning. This is a step in the right direction. But what is needed most is for U.S. policy makers to realize that Africa is an area of deep concern to U.S. National interests. The ^See, Arnold Rivkin, "Lost Goals in Africa," Foreign Affairs. Vol. 44., No. 1, October, 1965, pp. 111-126. 4 This report from a U.S. Ambassador to the President in summer of 1966 recommended that regional development pro 250 need, then, is to convince the national legislature and executive policy makers of Africa's priorities and thus the necessity of massive capital infusion to build industry, and large-scale technical assistance to build the base for that industry. Also, the U.S. must be willing to cooperate with Africans in a drive towards stabilizing world prices of commodities. Further, a large-scale effort must be carried out to make the American public aware of the problems which Africans face and the complexities of these problems. Finally, the reader must be aware of the fact that Africans complexities are so ddep and changes are often so sudden, that generalizations, opinions, and conclusions made by the pen of this author in 1967 will not necessarily apply in detail at any particular future time. jects in Africa in the future would be more fruitful than our present, strictly bilateral approach. See, Dan Kurzman, "U.S. Aid to Africa Planned on Regional Basis," Washington Post. August 30, 1966; and. Drew Middleton, "Selective Help in Africa Backed," New York Times. Sept ember 4, 1966. BIBLIOGRAPHY BOOKS Emerson, Rupert. From Empire to Nation. Boston; Beacon press, 1960. Friedmann, Wolfgang. The Changing Structure of International Law. New York: Columbia University Press, 1964. Hanna, William J. (ed.) Independent Black Africa. Chicago; Rand McNally and Co., 1964. Harvey, William B. Law and Social change in Ghana. Princeton, N.J.: Princeton University Press, 1966. Hinderaker, Ivan (ed.), American Government Annual. 1963rl962. New York: Holt, Rinehart and Winston, 1961. Kimble, George H. T. Tropical Africa. 2 vols. Garden City, N.Y.: Doubleday Anchor Books, 1962. Lawson, Ruth (Ed.) International Regional Organizations. New York: Praeger, 1962. Legum, Colin, pan-Africanism: A Short Political Guide. Rev. ed. New York: Preager, 1965. Lerche, Charles O., Jr. Foreign Policy of the American people. 2nd ed. Englewood Cliffs, N. J.: Prentice- Hall, 1961. McKay, Vernon. Africa in World Politics. New York: Harper and Row, 1963. Martyn, Howe. International Business. New York: Free Press of Glencoe, 1964. Nkrumah, Kwame. Africa Must Unite ! London; Heinemann, 1963. ______. Consciencism. New York; Monthly Review press, 1965. Ghana : The Autobiography of Kwame Nkrumah. New York: Thcmas Nelson & sons, 1957. _. _I Speak of Freedom: A Statement of African Ideology. New York: Praeger, 1961. ______. Neo-colonialism: The Last stade of imperialism. New York: International Publishers, 1966. Nwogugu, E. I. The Legal problems of Foreign Investment in Developing Countries. Dobbs Ferry, N.Y.: Oceana Publications, 1965. Robertson, Charles L. International politics since World War II, New York: Wiley, 1966. Robinson, Richard D. International Business Policy. New York: Holt, Rinehart and Winston, 1964. Schlesinger, Arthur, Jr. A Thousand Days. Boston: Hogghton Mifflin, 1965. Sigmund, Paul E., Jr. (ed.), The Ideologies of the Developing Nations. New York; Preager, 1963. UNITED STATES GOVERNMENT PUBLICATIONS Ball, George. American Business Abroad. United States Department of State, press Release Nq . 308, May 12, 1962. Fenrick, Joseph C, Jr., The Tanganyika Ground nuts Scheme. Foreign Affairs Division, Legislative Rgfseence Service, Library of Congress. Washington, D. C. : 1966. m Foster, William C. Trade, Investment, and U. S. Foreign Policy. United States Depastment of State, press Release, No. 633, October 19, 1962. Fredericks, j, Wayne. Our Policy Towards Africa, united States Department of State, press Release No. 390, July 18, 1963. Harrinan, W. Averell. problems of the Developing Nations. United States Department of State, press Release, No. 609, DecCTjber 4, 1963, Johnson, Lyndon B. Remarks. Office of the White House press Secretary, Press Release, May 26,1966. Lent, Gary L. Basic Data on the Economy of Ghana. Bureau of International Commerce, United States Department of Commerce, Overseas Business Reports No. 62-9. Wshington, D.C.; Government Printing Office, 1962. penfield, James K. The Role of the United States in Africa: Our Interests and Operations. United States Depart ment of State, Publication 6858, Near and Middle Eastern Series 43, Washington, D.C.: Government Printing Office, August, 1959. Rostow, Walt W, The Role of the Emerging Nations in World Politics. United States Department of State, Press Release, No. 44, March 15, 1965. Rusk, Dean. Freedom and Development, United states Depart ment of state. Press Release, No. 415, September 25, 1964. United States Agency for International Development. Proposed Economic Assistance Programs FY 1967; Summary Presentation to the Congress. Washington, D.C.: Government Printing Office, 1966, United States Agency for International Development. The AID Program. Washington: Government printing Office, June, 1964. «s» United States Agency for International Development and Department of Defense. Proposed Mutual Defense and Development Programs FY 1965 ; Summary presentation to the congress. Washington, D.C.: Government Printing Office, 1964. United States Agency for International Development and Department of Defense, proposed Mutual Defense and Development programs FY 1966 ; Summary Presentation to the Congress. Washington, D. c . : Government Printing Office, 1965. United states congress. House of Representatives, Committee on Foreign Affairs, Subcommittee on Africa. Activities of Private United States Organizations in Africa. Hearings before Subcommittee, 87th congress, 1st Session, May 8 - June 1, 1961. Washington, D. C. : Government Printing Office, 1961, United States Congress, Senate, committee on Foreign Relations. Foreign Assistance Act of 1962. Hearings before Committee, 87th Congress, 2d Session, on S. 2996, April 5-18, 1962. Washington, D. C. : Government printing Office, 1962. United States Congress, Senate. Committee on Foreign Relations, Foreign Assistance, 1965. Hearings before committee, 89th Congress, 1st Session, on the Foreign Assistance program, March 9 - April 7, 1965, Washingtôny D. C . : Government printing Office, 1965. United States Congress, Senate, committee on Foreign Relations. Foreign Assistance, 1966. Hearings before Committee, 89th Congress, 2d Session, on S. 2859, and S. 2861, April 6 - May 11, 1966. Washington, D. C . : Govern ment Printing Office, 1966. 269 United States Congress, Senate, Committee on thè Judiciary, Subcommittee to investigate the Admin istration of the Internal Security Act and Other Internal Security Laws. Ghana Students in United States Oppose U.S. Aid to Nkrumah. Staff Conferences of the Subcommittee, 88th Congres?, 2d Session, August 29, 1963, and January 11, 1964. Washington, D.C.: Government printing Office, 1964. United States congress. Senate, committee on the Judiciary, Subcommittee to Investigate the Administration of the Internal Security Act and Other Internal Security Laws. Is U. S . Money Aiding Another Communist State? Hearingbefore Subcommittee, 87th congress, 2d Session, Testimony of K. A. Busia, December 3, 1962. Washington, D. C.: Government Printing Office, 1963. United States, congressional Record,86th congress, 2nd Session, Vol. 106, part 5, March 24, 1960. United States, congressicnal Record, 87th Congress, 1st Session, vol. 107, part 3, March 10, 1961. United States. Congressional Record. 87th Congress, 2nd Session, Vol. 108, Part 2, February 7, 1962. United States. Congressional Record, 88th Congress, 1st Session, Voo. 109, Part 10, July 24, 1963, United States. Congressional Record, 89th congress, 2nd Session, Vol. 112, No. 116, July 20, 1966. United States. Congressional Record, 89th Congress, 2nd Session, vol. 112, No. 143, Aggust 26, 1966. United States Department of Commerce, Bureau of Foreign Commerce, World Trade Information Service. Economic Developments in Ghana (Gold coast) 1956. part 1, No. 57-65. Washington, D. C. : Government printing Office, 1957. United States Department of State, press Release, No. 284, May 3, 1962. 26f United States Department of State. Volta River Project. Press Release No, 887, December 16, 1961, United States Department of State, Bureau of Public Affairs, Office of Media Services. The United States and Africa, publication 7710, African Series 40, Washington, D. C . : Government Printing Office, 1964. United States Department of State, Embassy, Ghana, Accra. Economic Development ; Formal inauguration of the Volta River Project. United states Department of State, Airgram, No. A-341, February 1, 1966. United States Department of State, International cooperation Administration. Ghana. Press Release, April, 1961. United States Foreign Broadcast Information Service. IDailv Report : Foreign Radio Broadcasts, No. 115, June 15, 1966. United States President. The Foreign Assistance Program; Annual Report to the congress Fiscal Year 1964. Washington, D. C . : Government Printing Office, 1965. ______. Report to the Congress on the Foreign Assistance program for Fiscal Year 1962. Washington, D. C.: Government printing Office, 1963. Wenner, Manfred W. African Coup D * Etats: A Brief Survey. Foreign Affairs Division, Legislative Reference Service, Library of congress, Multilithed Reports, No. F-172, May 18, 1966. Williams, G. Mennen. Address to the international Affairs Association. United States Department of State. Press Release, No. 61, February 14, 1964. ______. Aids and Obstacles to Political Stability in Mid- Africa . United States Department of State, Press Release No. 253, April 13, 1962. ______. American Foreign Policy and the Emerging Nations of Africa. United States Department of State, Press Release, No. 241, April 11, 1962. 26? change and Challenge in Africa. united States Department of State, press Release, No, 203, March 2 9, 1962. Germany's Role in Modern Africa. United States Department of state. Press Release, No. 270, May 17, 1963. New patterns of African Trade. United States Department of State, press Release, No. 138, March 31, 1964. Rule and Exception in Africa. United States Department of State, press Release, No. 16, January 8, 1962. The challenge of Africa to the Youth of America. United States Department of State, Press Release, No. 158, March 9, 1962. The Emerging Nations of Africa. United States Department of State, press Release, No. 113, March 1, 1963. The New Frontier of Africa. United States Department of state, press Release, No. 3 91, June 15, 1962. The United States and the New Africa. United States Department of State, Press Release, No. 618, October 12, 1962. U. S. Policy in Africa. united States Department of State, Press Release, No. 48, March 18, 1965. GHANA GOVERNMENT PUBLICATIONS Ankrah, J. A. Broadcast on Africa Liberation Day, Embassy of Ghana (Washington, D. C.), Information Section, press Release, No. 6/66, May 27, 1966. 269 Ghana, industrial Promotion in Ghana. Accra: Government Printer, 1959. Ghana, information Services. Ghana is Born, 6th March 1957. Accra: Government Printer, 1958. Ghana, Ministry of Construction and Communications, Ghana Railway and Harbours Administration. Port of Tema: Official Handbook. Accra: Ministry of Information, 1962. Ghana, Ministry of information. Draft: programme of the Convention people's party for Work and Happiness. Accra: Government printer, 1962. ______. Ghana, Republic Souvenir. Accra: Government Printer, 1962. Ghana, Ministry of Information and Broadcasting. Ghana, An Official Handbook. Accra: Government printer, 1962. ______. Osagyefo in the East. Accra : Government Printer,1961. Ghana, Ministry of Trade. Handbook of Commerceaand Industry. Accra: Government printer, 1960. Ghana, parliamentary Debates : Official Report. Vol. 22, No. 8,d 21 February, 1961. Accra: Government Printer, 1961, Ghana, parliamentary Debates : Official Report. Vol. 22, No. 9, 22 February, 1961. Accra: Government printer, 1961. Jopp, Keith. Tema; Ghana * s New Town and Harbour. Development Secretariat and Ghana information Services, Ministry of Information, Accra; 1961. ______. Volta: The Story of Ghan a*s Volta River Project. Accra: Volta River Authority, 1965. May, Alan. Tito Comes to Ghana. Ghana, Ministry of information and Broadcasting. Accra ; Government Printing Bspaptonent, 1961. 269 Nkrumah, Kwame, Africa Must he Free, 15 April 1961. Accra; Government printer, 1951. ______. Appeal for World peace. Ministry of Information and Broadcasting, Ghana, Accra- Government Printer, 1961. ______. Statement on Ghana's Economic Policy; 2 October 1960. Accra; Government printer, 1960. ______. The Road Ahead. Ghana, Ministry of Information. Accra; Government Printer, 1961. _. Work on Aluminium Smelter Begins, ^ December, 1964, Accra; Government printer, 1964. PERIODICALS "Ayieeh! Ghana Gets the Bill," The Economist, vol. CCXIX, NO. 6401, April 30, 1966. "Canadians at the Volta Dam," Foreign Trade (canada). March 19, 1966. Coleman, James S. "Togoland," International conciliation, No. 509, September, 1956. Danquah, William. "Power - Electricity," Ghana Reconstructs (Accra), Vol. 3, No. 1, 1961. "Dr. Nkrumah States the Neutralist Case," Africa Report, Vol. 7, No. 8, August, 1962. "Emergency in Ghana," Africa Report, Vol. 7, No. 9, October, 1962. Futa, A. B, "The Volta River Project," The Economic Bulletin (Accra, Ghana), Vol. 5, No. 1, May, 1961. 269 "Ghana," Overseas Review (London; Barclays Bank, D. C. 0.), December, 1960. "Ghana After Nkrumah," The Economist (London), Vol. CCXX, No. 6415, August 6, 1966. "Ghana and the commonwealth," West Africa (London), No. 2320, November 18, 1961. "Ghana and the United Nations, " New Ghana (Accra), Vol. VII, No. 1, October 10, 1962. "Ghana Gambles on Aluminum," Business Week, No. 1548, May 2, 1959. "Ghana Hopes Opening of Volta River Project Brings New Economic Era," International commerce. Vol. 72, No. 6, February 7, 1966. "Ghana Institutes compulsory Purchase of 10-Year Bonds," Foreign Commerce Weekly, Vol. 66, No. 13, September 25, 1961. "Ghana Raises Import Duties on Some Consumer Products," Foriegn Commerce Weekly, Vol. 66, No. 13, September 25, 1961. "Ghana's Bid to Business," U. S. News and Wold Report, Vol. LX, No. 23, June 6, 1966. "Ghana's Mineral Output Lower for 1961-62," Africa Report, Vol. 7, No. 10, November, 1962. "Ghana Statistics Reveal Growing Trade Deficit," Africa Report, vol. 7, No. 4, April, 1962. "Ghana to be Host to peace Assembly," Africa Report, Vol. 7, NO. 5, May, 1962. "Ghana to be Sole Owner of all Mineral Resources," Africa Report, Vol. 7, No. 8, August, 1962. 2$H Hatch, John. "Nkrumah's Ghana; A Positive view," Africa Report, vol. 7, No. 8, August, 1962. ?I. M. P. Credit to Assist Ghana's Worsening payment Balance," International Commerce, vol. 68, No. 13, September 10, 1962, "Italy's New Empire," Fortune. Vol. 72, No. 4, October, 1965. Jackson, Robert. "The Volta River Project," Progress; The Unilever Quarterly (London), Vol. 50, No. 282, 4/1964. Kena II, H. E. Nana. "united States of Africa," Voice of Africa (Accra), vol. 2, No. 3, March, 1962. LeHarival, j. "Chain of Stones," Shell Magazine (London), vol. XLV, NO. 699, March, 1965. Littel, Blane. "Big Brother in Ghana," The Reporter, Vol. 25, No. 8, November 9, 1961. Marcus, Edward. "Africa's Aluminum Schemes," Africa Report, Vol. 5, NO. 11, November, 1960. Mosher, Norman. "BhahaeRe«ises Go&ea Rules," Africa Report, Vol. 5, No. 11, November, 1968. ______. "Nationalization in Ghana?" Africa Report, Vol. 5, No. 11, November, I960. "M. P.'s Unanimous for Volta, " West Africa (London), No. 2283, March4, 1961. "Nkrumah at the Volta," West Africa (London) , No. 2538, January 22, 1966, "Nkrumah Awarded ;enin peace Prize," Africa Report, vol. 1, No. 5, May, 1962. 2«2 Nkrumah, Rvame. "African Freedom and unity," Ghana Today (Accra), June 20/ 1962. . "African Prospect," Foreign Affairs, Vol. 37, No. 1, October, 1958. ______. "Towards a United Africa." Voice of Africa (Accra) Vol. 2, No. 3, March, 1962. Rivkin, Arnold. "Lost Goals in Africa," Foreign Affairs, Vol. 44, No. 1, October, 1965. Seikman, Philip. "Edgar Kaiser's Gamble in Africa," Fortune, Vol. 64, No. 5, November, 1961. "Technical Advice Centres Help Local Development projects," New Ghana (Accra), Vol. VII, No. 27, October 9, 1963. "The Duke on the Volta," West Africa (London), No. 2217, November 28, 1959. The Party (Accra), C. P. P. Journal, No. 11, November, 1961. "The Role of America's Business Statesman," Steel; The Metalworking Weekly, Vol. 148, March 6, 1961. "Volta River Projectin Ghana," International Financial News Survey, Vol. XVIII, No. 6, February 11, 1966. Willcox, S. "Ghana's Reserves Up," Africa Revolt, Vol. 7, No. 10, November, 1962. NEWSPAPERS Garrison, Lloyd. "Exit Nkrumah, an Old Dreamer;Enter Ankrah, a New Realist." The New York Times Magazine, April 3, 1966. ______. "Portrait of Nkrumah as Dictator," The New York Times Magazine, May 3, 1964. 293 "Ghana: Symbol of Progress," New York Times, Section 12, September 19, 1965. Sales, J. Kirk. "The Loneliness of Kwame Nkrumah," The New York Times Magazine, June 27, 1965. The 2)\ccra/ Daily Graphic, November 1962-January, 1966. The 2^ccra/ Evening News, January, 1966-May, 1966. The Ghanaian Times ^ccra/, February, 1961-January, 1966, The Los Angeles Herald-Examiner, July, 1963. The Miami Herald, December, 196 5-January, 1966. The New York Herald Tribune, February, 1964-November, 1965, The New York Times, November, 1961-January, 1967. The (Washington) Evening Star, February, 1966-August, 1966, The Washington Post, January 1960-3'aniB ry, 1967. MISCELLANEOUS DOCUMENTS International Bank for Reconstruction and Development. $47 million Loan for Volta project in Ghana. Press Release No, 62/9, February 8, 1962. Jamaica, Department of Statistics, External Trade of Jamaica, 1963. Kingston: Government printer, 1963. 299 OTHER SOURCES Barclays Bank D. C. 0. Ghana; ^ Economic Survey. London; Barclays Bank D. C. 0., 1964. Haywood, Willie M., Jr. "The VoUa River project and the Problem of Resettlement." Unpublished Master's thesis. The American University, Washington, D. c ., 1964. Proceedings of the American Society of International Law; Sixtieth Annual Meeting. Washington, D. C .; Amer ican Society of International Law, 1966. The Standard Bank and Bank of West Africa, Economic Depart ment. Annual Economic Review of West Africa. London; Standard Bank Limited, July, 1966. APPENDIX A BRITISH TOGOLAND*S INTEGRATION INTO GHANA The date March 6, 1957, marked the formal integ ration of Togoland under United Kingdom Administration into the new state of Ghana. On that date, Britains, Trusteeship Agreement over Togoland was terminated. These events were the culmination of a ten year struggle to deter mine British Togoland's future and this struggle was closely linked up with the Volta River Project. Originally, Togoland was a German protectorate. Germany's treaty with the Togolese lasted from 1884 until World War I, when it was abrogated by an Anglo-Froch military occupation government. In 1919, at the Versailles Conference, Togoland, one of the spoils of the war, was divided into two parts: one British, one French. Both territories were later placed under the League of Nations', Permanent Mandates Commission as Class C Mandates. The major problem which resulted from European colonization of this part of West Africa was the split up of the EWe tribe. By the 1920's this homogeneous ethnic group, or tribe, found about one-third of its people in the Gold Coast, one-third in British Togoland, one-third 2 66 in French Togoland, and a small group in Dahomey. The future of the Togolands would inevitably be linked up with the subsequent Ewe unification movement. After World War II both Togolands were submitted to the Trusteeship Council and, in December, 1946, the off icial Trusteeship Agréments were signed by Britain and France. Unlike the League, the Trusteeship Council held hearings and sent visiting missions to the Trust territ ories. Starting in 1947, Ewes petitioned the Council for the reunification of their tribe of, then, about one million inhabitants. As a response. Un. policy promoted pan-Togoland institutions and encouraged Anglo-French coop eration. The first visiting mission arrived in late 1949. It subsequently recommended either an association between British and French Togoland, or an association of British Togoland with the Gold Coast Colony and Dependencies, or an association of all three, as the best alternatives for political and economic advancement. Unification of the Ewes in a separate politicalentity became a dead issue as a policy of unification of the two Togolands took its place. 2«r In the meantime, administrative developments took place in British Togoland which brought it even closer to the future of the Gold Coast. Since the beginning of the Mandate, the five administrative districts of British Togoland had been administered with their corresponding sister districts in the Gold Coast Colony and Dependencies on an East-West axis. This close relationship amounted to de facto integration for a period of forty years. On the grounds of this close relationship, the British argued for integration in the Trusteeship Council. Integration, they claimed, had several advantages. First, it would unite at least two-thirds of the Ewes. Second, British Togoland was a natural market for the Gold Coast. Finally, integration would facilitate the Volta River Pro ject since British Togoland*s western border was the Volta River and included a large section of the territory which would be inundated by thecreation of a lake behind the pro posed dam. By 1952, Nkrumah's Convention People's Party had assumed power. The Party's policy was that since the Gold Coast was clearly nearing independence, and integrated British Togoland would fulfill the Trusteeship Agreement and terminate it. 26S The 1952 Visiting Mission found that opinion was divided, and no one alternative was in the majority. Its recommendation was that a plebiscite should be held to ascertain the wishes of the people. During this time the integrationists were more militant than the unionists or unificationsts. They consisted of two Gold Coast political parties: The Con vention People's Party (C.P.P.) and the Northern People's Party (N.P.P.). The C.P.P. campaigned vigorously in southern British Togoland to win the Ewe unificationists to their side. In 1953, the C.P.P.-dominated the Gold Coast Government granted one million pounds sterling to develop the Trans-Volta Togoland region (i.e. southern British Togoland, later Ghana's Volta Region.) C.P.P. policy on integration was similar to British policy. Integration would offer enconomic advantages as well as rapid independence. Furthermore, the C.P.P.did not want the trust territory to be a delaying factor in its independence drive since its motto was "Self-Government Now." Party officials felt that Ewe unification was hopeless and Togoland unification senseless. Finally, they argued that as a future member of the U.B., Ghana amid prevent 269 French annexation of British Togoland. The N.P.P. appealed to the Muslim peoples of northern British Togoland with similar arguments. In 1951, action in the United Nations shifted from the Trusteeship Council to the Fourth Committee of the General Assembly. More petitions were presented to it. A decisive factor in the Togoland dispute came early in 1954 with the Gold Coast Orders in Council, a new constitution. It set up electoral districts for the legislative assembly which straddled the boundaries with Togoland. After elections were held on June 15th, the British announced that soon they would no longer be ad>le to administer British Togoland in the present manner. They declared that the Trust Territory had progressed to the point where if it chose integration with the Gold Coast, the Trusteeship Agreement would have been fulfilled. Not wanting to prejudge the issue, the U.K. proposed thatthe General Assembly consider the question in the 1954-1955 ses sion. Further, they offered to give the Assembly full assistance in ascertaining the view of the inhabitants. On December 14, 1954, a General Assembly Resolution noted that as the Gold Coast neared independence, the people of British Togoland had reached a stage of development where by the objectives of Trusteeship could be considered 2P6 achieved. It recommended that a special Visiting Mission be sent immediately. This group subsequently reported having found two prominent views in British Togoland. One view supported int^egration; the other view favored postponing British Togoland*s ultimate fate. The Visiting Mission recommended that a special plebiscite be hied in order to determine the wishes of the people. This recosss- endation was supported by the U.N. In December, 1955, by General Assembly Resolution 944(x). It was also supported by the Npp and the C.P.P. in the Gold Coast. In Aprio, 1956, the Gold Coast Government issued a White Paper calling for its' idependence under the name of Ghana, six regional divisions which would include the districts of British Togoland, and increased devolution of powers to these regions. The plebiscite was held on May 9, 1956. The result was a 58 percent overall majority for integration with an independent Gold Coast. The alternate choice on the ballot was separation of Togoland under U.K. administration from the Gold Coast and its continuance under Trusteeship pend ing the ultimate determination of its political future. In the southern district where the Ewe-dominated Togoland 2fÿ Congress Party had been most active, 55 percent voted in favor of this second choice. The British then recommended termination of the Trusteeship Agreement because: an overall majority favored integration, a union with the Gold Coast was in the long term interest of British Togoland, and when the Gold Coast became independent, the Trusteeship Agreement would no longer be operaible. In July, 1956, the Trusteeship Council passed the Indian-sponsored Draft Resolution 1496 (xviii) which noted that the will of the majority was for integration, aid recommended that appropriate steps be taken to terminate the Trusteeship on the same date that the Gold Coast achieved independence. The vote was 13 to 0 with one abstention. The resolution further stated that the eleventh session of the General Assembly must deliberate this recommendation in November, 1956. In the meantime, in a general election from July 12 to 17, the Convention People's Party again captured the reins of the Gold Coast Government with a larger majority than ever. Party condidates won 72 out of 104 seats in the National Assembly and a mandate to construct a unitary state. 2 W On December 13, 1956, the General Assembly approved British Togoland's merger with an independent Ghana. March 6, 1957, marked Ghana's independence date and British Togo land was incorporated into the new state as the first trust territory ever to exercise its right of self-determination. Two days later Ghana became the 81st menber of the United Nations. It is not the author's intention to advocate a conspiracy theory here. However, it is clear that British Togoland's integration was essential to the future of the Volta River Project. An extended Trusteeship Agrément would have brought the United Nations actively into the project. The existence of a unified and independent Togo land would have necessitated a bilateral agreement between Ghana and Togo, with all the problems that have been faced by the BAR and the Sudan with the Nile River, and Jordan and Israel concerning the Jordan River. As later proven, Ghanaian—Togo relations were tenuous. The Ewe unification movement never died. Both Britain and the Gold Coast, therefore, had a big stake in Togoland's integration into the Gold Coast. Britain needed the aluminum, while the Gold Coast needed 2f3 the project for prestige to diversify her economy, and to satisfy Nkrumah's ambition for a united Africa. The im portance of integration to Nkrumah was seen in the way the C.P.P. vigorously campaigned during the elections and before the plebiscite. James S. Coleman, in criticizing the plebiscite, claimed that too many Togolese voted in accord with British desires. In any event, without the integration of British Togoland, from a geographic stand point alone, the Volta River project would have been vastly more difficult to implement. The best sources on this subject are James S. Cole man. "Togoland", International Conciliation, no. 509 (September 1956) ; and Rupert Emerson, From Empire to Nation. (Boston: Beacon Press, 1960), pp. 320-326.