20
Century20
CenturyCreated 1/24/1997
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Let us spend a little time on this phenomenon that earned us such notoriety on the high seas, in shipping journals, in Lloyd's maritime insurance, and of course, throughout the world media... the parade of vessels that stretched out from Lagos harbor into miles and miles of international waters.
[Nigerian President] Shagari's party men were ever full of ingenious ideas for spending Nigeria's money--that is, making a lot of Nigeria's money for themselves--and this was only one scheme out of a hundred or more, but one with truly spectacular results. They came up one brainstorming day with a nationwide federal housing project for low-income earners; it had the additional advantage of being such a populist, caring idea. This was, by the way, irregular, since housing on that scale properly belonged on the state list. To fulfill such an ambitious project, however, you do need a world of cement. The Nigerian cement factories could not, as the [ruling] NPN knew, meet the requirements, so, of course, import! And did they import, utilizing the infamous import licensing scheme, which was the shortest cut ever devised for hemorrhaging a nation's foreign exchange reserves!
The news spread round the world: Shehu Shagari's regime needed cement, was paying for cement, would take in any amount, any grade of cement from anywhere. Letters of credit could be opened anywhere, by anyone, and the open-ended import license scheme was readily available. All you needed was to get some floatable object and a guaranteed line of supply. And thus it came to pass that all traffic on the high seas between 1981 and '83 appeared to be headed in one direction only--coracles, catamarans, freighters, dredgers, lighters, First World War ironclads, rafts from the Kon-Tiki expedition, converted oil barges, sailboats, and Mississippi paddleboats... anything at all that could limp into Lagos. The important thing was to arrive and be logged by the harbormaster, even if it meant anchoring fifty nautical miles away and going ashore in a lifeboat.
Now, please do not treat the following as part of the foregoing modest indulgence in poetic license, this is for real: The practice amng some shipowners was to leave a junk ship laden with cement in Lagos harbor, fly its captain and crew back to Europe, sail another boat into Lagos harbor, and repeat the process. It cost those shipowners virtually nothing in comparison to the demurrage fees that the Nigerian government was obliged to pay for retaining those ships in the harbor.... All they had to do was leave a solitary crew member on board; they knew for a certainty that it would not be the turn of any boat for three, possibly six months. Lagos harbors were such a sight that pilots on commercial airlines would deliberately fly over the flotilla--whose strings of lights transformed Lagos harbor into the most scintillating, extensive, and expensive Christmas tree in or out of season--and invite passengers not to miss the unique festival of light on the left of right side of the plane...
20
CenturyCreated 1/24/1997
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Associate Professor
of Economics Brad DeLong, 601 Evans