Nigeria

In September 1980,  I joined the CMA Consulting Group, a consulting firm dealing in construction surety problems and special projects and investigations.  Shortly after joining CMA, I was added to a team organized by the company to help Nigeria solve a number of problems. 

Nigeria is a West African nation located on the coast off the Gulf of Guinea, surrounded by the neighboring countries of Benin, Niger, Chad and Cameroon.  Many years prior to my association with CMA, Nigeria had a very prosperous agrarian economy that enabled them to export large quantities of surplus food and use the income for internal civic improvements.  The economy was totally dependent upon local tribes providing workers to plant and harvest a variety of foodstuffs, including yams, grain and nuts plus non-edibles, such as cotton, rubber and minerals.  When oil was discovered, the natives deserted the farms and mines to work in the new oil fields at a substantial increase in personal income.  The abandoned farms went fallow and the food surplus that Nigeria had enjoyed and that had provided the nation with an export income, vanished.  In no time at all, Nigeria went from a food-exporting nation to a food-importer.  The increased income that had attracted the natives to the oil field jobs vanished as well since they were forced to spend more for the increased cost of imported food.  It wasn’t long before Nigeria was faced with a serious problem: the nation was receiving large sums for the newly discovered oil, but because of the changes to their economy, they were spending more on imports.  In addition, corruption was draining much of the oil income. 

Fortunately, there were knowledgeable people in and out of the Nigerian government who recognized that relief was needed to avoid the possibility of a future famine.  Concurrently, the political situation existing in Nigeria at that time discouraged foreign nations from rushing to Nigeria’s aid.  To ease the international problem, Nigeria decided to seek options for the short term that would provide immediate assistance and alleviate the long-term problems.  Before my joining CMA, a negotiation had been conducted with Nigeria and  CMA had entered into a contract to prepare a feasible study on developing these options.  CMA sent a team to Lagos to conduct a field investigation while fleshing out the home team with new hires.  I was part of the latter.

Prior to my joining CMA, our field team reported that piracy was rampant in the Gulf of Guinea.  While the nation had ports at Port Harcourt and Lagos, they were inadequate to handle the increased volume of shipping needed by the oil companies to support the oil fields and by the government and private firms to receive normal imports.  Ships would arrive and be forced to anchor in the Gulf of Guinea for weeks while waiting their turn to dock.  In the meantime, the radically changed economy was forcing an increasingly frustrated native labor force to supplement their income to survive.  The large number of unprotected, anchored vessels provided a possible answer.  Many natives decided to band together in illegal clandestine activities in the gulf.  Operating at night, using speedboats to reach and board the anchored vessels, the part-time pirates would remove selected items from the vessels for later sale on the lucrative black market that had sprung up along the coast.  There were even reports of pirated oil equipment being sold directly to original owner oil companies. 

Enraged at the substantial losses to pirates, the initial reaction of the government was to provide a defense force to counter the pirates and defend the cargo vessels against these raids.  When it was realized that there was a strong possibility that corrupt government officials, police and members of the Nigerian armed forces were actively participating in the piracy, a decision was made not to resist and to permit the pirates to take whatever they wanted.  The supporters of this decision noted that casualties were only experienced when the ship’s crew resisted.  While undoubtedly saving lives, the decision to permit the continued theft raised maritime insurance rates, which increased the costs of imported goods and further aggravated the failing economy.  The government piracy decision, however, permitted CMA to divert our field team to solving their original task, that of solving the new options problem.  Our efforts were now concentrated on the preparation of the feasibility study. 

It was the goal of the Nigerian government to eliminate, or substantially reduce, imported food from the diet of their citizens.  To accomplish this goal, the offered food had to be normal to the average Nigerian’s simple diet, be plentiful and readily available, and it had to be priced at acceptable cost.  In turn, increased domestic food production required more workers than were currently available because of the higher pay of the oil fields.  That meant finding a means of luring workers from their lucrative oil field jobs.   It became a problem of how to increase the worker’s pay or reduce his cost of living – or a combination of both.  While increasing the workers pay could solve the problem, if the workers were attracted to the offer at all, it was an exercise in futility because the oil companies had unlimited funds and could counter the government’s offer and easily recover the additional costs in subsequent sales in a seller’s market.  What to do?    

 The CMA home office had many meetings on this point.  I don’t recall who solved the problem (I think it was the woman whom I was paired with on the team), but the final decision was not in trying to out spend the oil companies.  She proposed that we offer the workers ‘a piece of the action,’ by offering to make them a part of the team and share in the profits for as long as they remained in the program. 

The study that was developed proposed an agricultural plan consisting of 3-5 small farms with one central equipment facility serving the farms, all located adjacent to an existing road.  Each farm would include a one-room dwelling to house the farmer and his family.  The building could be poured concrete cast on site or a prefabricated structure erected on site.  Neither would be less attractive than existing homes used by the native workers.  One big advantage with the offered family home was that workers currently employed at the oil fields rarely, if ever, had their families with them. 

The central equipment center would include all equipment deemed necessary for the operation of the farms.  While each farm would have its own supply of hand tools, the center would have larger items, such as trucks, tractors and any required special farm equipment.  The center would also be used to make repairs, store fuel and supplies and, in general, do all the tasks necessary to support the farmers and their farms.  Because of the added skills required to operate the center, the compensation would be greater.

Simply stated, in operation the farmers would raise crops on their farms supported by the center.  Some harvested crops would be moved to a roadside food stand for sale to the general public.  The government would purchase surplus food at every harvest for distribution to the poor and for export sale.  . 

A European Agronomist would run the first farm complex with a small staff under contract.  His task would be to train the farmers and the equipment staff.  The trainees would run follow on farm complexes. 

The farmers and the natives operating the equipment center would be paid a wage plus a percentage of the profits of the complex and be provided with living quarters for them and their families.  If the farmer remained with the complex for a predetermined number of years, the land, building and tools would become his property.  If the operators of the equipment center remained with the center for a predetermined number of years (not necessarily the same number of years as the farmers, probably more), their quarters plus a percentage of the value of the equipment would be titled to them.  In both instances, no specific time period was noted because the affected factors would not be known until the plan was finalized.  At the time, the thinking was three years for the farmer and five years for the operators.  After three years, the farm complex would become a worker-run co-operative.  Transferring title to a one-room concrete home may not appear to be very attractive, but in a country where most tribal native quarters were a fragile hut made from branches and mud, the offer had merit. 

 The initial program was not expected to show a profit because of the high start up costs and its planned use as a training center, but in the follow on complexes, with the Agronomist no longer needed, with equipment on site and with training completed, the realized income from sales would begin to shift to the bottom line.     

It did no good to raise food for the locals if there were no means of getting the food to the consumers.  The southern half of the country was divided into a number of approximately equal parts, each part having at least one road for access, thus, placing the food stands adjacent to roads permitted the locals easy access to the food.  Food for export would be trucked to an embarkation point.      

With adequate investment seed money and native farmers, a new farm complex could be started every year or so.  Ultimately, the southern half of the country would have many farm complexes, owned and operated by the workers.  Adequate food supplies would be raised for domestic consumption and eventually enough to reinstate the old agrarian export program destroyed by the discovery of oil, but problems remained.  The less hospitable Nigerian Islamic north country wasn’t included because of the nature of the land, which was mainly forested.  The government didn’t have a valid plan for resolving the existing political and ethnic problems that prevented expansion into the north.  Ways to raise the seed money necessary to get any version of the study started continued to evade them. The oil money was mostly gone, having been lost to rampant corruption or having been used to fund commitments more politically correct.  European and American investors, who had shown an early interest in the program through the OKPI Development Company, were now reluctant to take part.   Without investment money, another source of funds was desperately needed.  In my discussions with the U.S. State and Agricultural Departments, the message was clear: Nigeria was a high-risk business environment that required too many safeguards.  They strongly recommended no investment to any who would ask.

Someone in the Nigerian government suggested harvesting their plentiful forests.  This constituted an entirely new project with new objectives and proposals.  Some suggested substituting the proposed forest program for the farms.  Since the purpose of the farms program was employment for former farmers and the restoration of food exports, the proposed substitution was rejected and a preliminary review of the forest program conducted.

The majority of the forests under consideration for harvesting were in the hostile north.  Would the northern locals agree to the cutting of “their” timber?  If so, wouldn’t they expect compensation in jobs, a share of the profits, or both?  It would only seem fair that timber cut in the north would employ locals.  But there was a more pressing problem.  There were few, if any, trucks available to haul timber and few adequate roads in the north for the trucks to haul on.  During the review, it became apparent that the cost of the proposed timber program would easily exceed the cost of the farms program.  The sale of the timber would generate a profit, of course, but funds would first be needed to build roads capable of handling the anticipated very heavy traffic that the timber harvest would create.  Large trucks would have to be purchased and drivers would have to be hired and trained.  No one in the government appeared knowledgeable on the availability of the tools needed to do the work and the assumption had to be made that procurement of tools for cutting timber would add a substantial sum to the costs.  The problems were growing like Topsy.  I couldn’t help but remember the words of a poem on how a battle was lost because a nail was lost.  Truly, this was the case in Nigeria.

Though the farm plan was self-supporting, without seed money and because of unsettled conditions in the country, foreign investors were not interested in what they considered a very risky investment – a position supported by the U.S. State and Agricultural Departments.  The government was financially incapable of initiating the programs without outside assistance and was forced to place both programs on hold while efforts were made to find a solution to what appeared to be unsolvable problems.  The oil money was the logical answer to the problems, but that required an end to existing corruption, something that was not about to happen.

What I have described is one particular business problem that CMA faced and ultimately abandoned.  But there were other difficulties that all businessmen doing business in Nigeria faced on a daily basis.  Transportation using a taxi or rented car was impossible.  The only certain means of getting around a city such as Lagos was to locate a local native who owned a vehicle and hire him for 24-hour transportation service during your entire visit.  In operation, he lived in his car and was always available to move you around the city to wherever you wanted to visit, day or night.  Of course, in a country with the climate of Nigeria, this raised several hygiene problems, which you couldn’t help but notice but had to ignore if you ever wanted to get around the city.  Telephone service was spotty at best.  There were many days when telephone service didn’t exist.  The wise businessman hired a 24-hour messenger to guarantee delivery of his messages.  Most of these messengers lived in the car with the driver.  Normally, the hired driver would recommend one of his friends for the messenger tasks. 

Sanitation in Lagos was not always the best.  There were days when heavy rains created local flooding and caused the sewers to overflow into the streets creating odorous trips – another good reason to have your own driver who was familiar with flooding problems.  On such days, walking in Lagos could be very unhealthy.  I remember a conversation that I had with one of our field managers on his return visit from Africa.  He described a day when one of the main streets in Lagos was flooded from heavy rains and sewage.  His driver was taking him to a meeting at a hotel or office building.  His description of his visit could have been the subject of a comedy written for the movies.  He said the car passed through the streets on his way to his destination creating waves that imperiled pedestrians.  When he arrived, he removed his shoes and socks and placed them in his suit pockets, rolled up his trousers to mid-calf, and stepped into the filth and waded to the building where a doorman was waiting for him.  The doorman had a garden hose which he used to flush his feet with what he hoped was clean water, offered him a towel and a folding chair for him to dry his feet and replace his shoes and socks.  The most humorous part of this entire event was that both the visitors and the doorman went through the entire process without batting an eye.  Everyone accepted what was happening as normal. 

And this was just one assignment during my tour at CMA.  Even business has its funny moments.

Schedule of Photographs

1.             Map of Nigeria.

2.             Broad Street, Lagos.

3.             Typical street.

4.             River boatman

5              Sketch of planned farm complex

6              Nigerian  Architecture

7              Not too friendly native in an outlying village.                                                   

         

8              Local river boatman.

9              River boating delivering food.

10            Women dancers at a wedding.

11            Shops near Efferun.

12            Outdoor beauty parlor

September 2007

LFC