ENGINEERING IS DEVELOPMENT (Serialised) No 6

The Booming Seventies

Could you believe that we are already in the sixth week of our journey into the book, Engineering Is Development? The intention remains to fester germane discussions that will accelerate the development of our nation. Some of the feedbacks we have received indicate that many believe Nigeria has not fully leverage on the potential of engineering to transform this country. The goal is to find a solution together.

Remember, you can download the whole book here or buy a copy. Contact the managing director of ACEN for enquiries (abolajiogunsanya@acen.org.ng).

Political and Economic Environment

Two major factors influenced the 1970s for Nigeria. The first was the end of the civil war, which brought peace and re-unification. The second was the increase in both the quantity and price of crude oil produced by Nigeria, and the consequent considerable increase in revenue to the country. Suddenly, there were peace and plenty, two of the cardinal features of our old National Anthem.

The end of the civil war in January 1970 represented a welcome relief from the preceding thirty months of intense fighting. The return of peace presented the opportunity for reuniting the hitherto scattered population, including professional colleagues. Within the NSE, there was genuine happiness and anxiety to welcome back professional colleagues, and to be in the vanguard of the national movement for reconciliation. The society immediately wrote off all the war-times arrears of annual dues and subscriptions for members in the war-affected areas as a way of attracting them back to the fold.

Oil was discovered in Oloibiri in Eastern Nigeria in 1951, and exploitation of oil led by the Shell Petroleum Development Company was well advanced by the 1960s. But oil was yet to dominate the Nigerian economy at the start of this decade, and agriculture, mainly cocoa, palm products, groundnut and cotton, was still the mainstay of the economy. Three main groups of countries produce oil. The first consists of industrialised nations which produce oil mainly for local consumption, typified by the United States of America. The second consists of countries which produce oil mainly for export, to which Nigeria belongs. The third group have a mix of local consumption and export, the USSR and the UK being examples.

The Organisation of Petroleum Exporting Countries, OPEC, was formed in 1960 with the five largest exporting countries, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela as the founding members. By the end of 1971 six other nations, Qatar, Indonesia, Libya, United Arab Emirates, Algeria and Nigeria had joined the group: The founding members of the organisation had studied how the Texas Railroad Commission influenced the price of oil through the control of production. OPEC as a body could now, in a similar manner, control the production of oil in the international market and thus significantly influence its price. Following the Israeli-Arab War that started on October 5, 1973, the price of oil went up four-fold, from $3 to $12 per barrel in a period of just six months.

This increase in oil price substantially increased revenue to Nigeria, and suddenly there was sufficient funding available to implement major projects.

National Planning

With the considerable increase in revenue, the federal government embarked on a massive development programme in virtually all sectors of the economy. Two five-year development plans 1970-75 and 1975-80 were conceived and implemented in this decade. The first plan was a rehabilitation and reconstruction plan, to restore the infrastructures that had been damaged during the war. The second plan was an ambitious plan to reposition Nigeria and Nigerians economically and socially. Most of the projects in the second plan were grand and hugely ambitious.

Two major projects in the steel and telecommunication sectors illustrate the scale of projects conceived and embarked upon in the period. The country embarked on the simultaneous development of two major steel manufacturing plants, the Ajaokuta Steel Plant with the Soviet Union, and the Aladja Steel Plant with German and Austrian contractors.

Thus, in the 1970/1980 periods Nigeria embarked on two integrated steel development programmes. Unfortunately the Federal Government dissolved the NSDA; the only viable agency that could have scientifically managed the situation. Their functions were returned to the non-technical bureaucrats of a new Ministry of Steel. A lot of activities were then haphazardly embarked upon; lots of inflated subsidiary projects were being simultaneously chased. In 1981, the Delta Steel Plant was completed and commissioned on schedule. On the contrary, the Ajaokuta Plant became more complicated and remains uncompleted till today.

Likewise, two major development plans, 1970-75 and 1975-80 were prepared for the telecommunication sector. The 1970-75 plan concentrated on the reconstruction and rehabilitation of the equipment and infrastructures damaged during the war. In telephony, new automatic exchanges were to be constructed and existing ones expanded. In telegraphic communication, the torn-tape system was to be replaced with the teleprinter automatic switching system. There were plans for the national transmission system and external line plant. The establishment of a Nigerian Satellite Communication earth station at Lanlate was also planned.

Projects of similar scale were conceived in several other sectors, including the following:

·        Several military barracks were designed and built to rehabilitate and settle soldiers returning from the war; the military projects alone needed 16 million tons of cement

·        Port development was embarked upon to cope with the increased demand. Port Harcourt, Bonny, Calabar, Koko and Lagos ports were rehabilitated by1972. On October 14, 1977, the ultra-modern Tin Can Island Port was commissioned. About two years later (16th June 1979) the new Warri Port was commissioned together with the new Calabar Port (19th June 1979). The Apapa Port Complex was greatly expanded to include the addition of Roll-on Roll-off berths, in addition to several other ports along the national coastline.

·        Several other major projects that remain landmarks in the Nigerian space (check them out in the book).

Implementation Challenges

The magnitude of the plans embarked upon presented challenges and opportunities on all fronts – manpower, infrastructures, governance and institutional framework.

The congestion at the Apapa port perhaps best illustrates the inadequacy of the existing infrastructure to cope with development demands. In anticipation of the large quantity of cargo envisaged for the plan, Port Harcourt, Bonny, Calabar, Koko and Lagos ports were rehabilitated by1972. These, however, turned out to be grossly inadequate for the cargo that was eventually coming in. The situation was further compounded by the introduction of containerisation which brought heavier and larger volumes of cargo at a time. Not only were the ports inadequate to handle them, the country’s narrow bridges and poor road network constituted major hindrance to speedy evacuation of the goods. The containers had to be unpacked, thereby defeating the primary benefit of containerization. Rail services expected to handle about 50% of the traffic also responded poorly, handling below 25%. There was also the inefficiency and abuse of the port operations and processes. These all resulted in severe port congestion.

In addition to the volume of cargo generated by the aggressive developmental efforts, economic and social policies of government compounded the issue. Having frozen salaries for the war period, a salary review commission was set up with Chief Jerome Udoji as chairman. The commission recommended significant increases in salaries, with one year of arrears. This increased the purchasing power of the general populace for consumable goods phenomenally. The government also relaxed the foreign exchange control that had prevailed during the war and lifted the ban on imports. All these causes led to a massive demand for imports. At a point, the government ordered 20 million tonnes of cement, 16 million of which was to be used by the military, when the total existing port capacity in the country was 6.5 million tonnes of cargo.

Consequently, the Apapa Port was congested with vessels which arrived simultaneously within the nation’s territorial waters. By the close of 1974/75 fiscal year, 105 ships, most of which were cement vessels were already queuing for berthing facilities. By the middle of 1975, vessels waiting for berthing spaces in the ports had reached a record figure of 455, which included 300 vessels carrying bags of cement. Ships had to wait for an average of 180 days before they could berth. This attracted a freight surcharge of 30 to 100%. A demurrage estimated at US$4,100 per day for each cement vessel for delay more than ten days was paid by the federal government.

The port congestion blocked the inflow of raw materials to industries and production slowed down just at the time when demand was highest. Even at their full production, it would have been difficult to cope with the increased demand. With more money in people’s hands chasing insufficient goods, the situation was simply chaotic.

Get more details in the book. We have a duty to know our history and pass it on to the upcoming generation so they don’t make similar past mistakes. Continue to engage with these articles by sharing your insights and forwarding it to others. Thank you and let’s meet again next Tuesday.

Bayo Adeola +234(0)8022910259; kaa@cpmslimited.com; www.cpmslimited.com