In 1974–75 Nigeria confronted one of the most extraordinary procurement disasters of post-war Africa. As oil revenues surged, federal agencies placed enormous import contracts for cement. Poor coordination, weak procurement controls and perverse contract terms combined to produce a vast maritime backlog, the so-called “Cement Armada”, that paralysed ports, wasted resources and became a symbol of mismanagement in the last years of General Yakubu Gowon’s government.
Oil money and ambitious planning
After the civil war Nigeria’s rulers aimed to rebuild and to industrialise rapidly. The oil boom of the early 1970s furnished unprecedented revenue, prompting expansive public investment plans. Cement was central to those plans: roads, housing, military barracks and new urban projects required vast quantities of the material. Yet institutional capacity, port throughput, storage, logistics and procurement systems, lagged far behind political ambitions.
What went wrong
Several elements converged:
Fragmented contracting. Rather than a single coordinated procurement, multiple ministries and parastatals placed independent orders. The Ministry of Defence reportedly placed an especially large order for military construction that, combined with other agencies’ requests, multiplied total purchases well beyond realistic needs. Accounts from port authorities and contemporaneous reporting indicate the aggregate orders equalled many times Nigeria’s normal annual cement requirement.
Numerous suppliers, overlapping delivery schedules. Contracts were signed with dozens of foreign suppliers; deliveries were scheduled without regard for port capacity. Ship arrivals clustered, and the nation’s principal port at Lagos, designed for far smaller throughput, was overwhelmed. Ships queued offshore for weeks or months.
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Contractual exposure. Many contracts contained demurrage and shipment clauses that penalised delays or required payment irrespective of local discharge capacity. As vessels waited and cargoes were delayed, demurrage charges rose. Attempts by Nigerian authorities to unilaterally repudiate or re-negotiate contracts produced protracted litigation.
Logistics and spoilage. Extended storage and marine exposure damaged some cement consignments. Damp and saltwater exposure can render bulk cement unusable; unloading delays and inadequate storage exacerbated losses.
Scale and consequences
Sources vary on exact figures, but contemporaneous and later accounts indicate orders and deliveries constituted many millions of tonnes of cement and that several hundred vessels, not merely a handful, were involved in the backlog at the height of the crisis. The immediate consequences were severe: normal imports stalled, port operations strained, costs mounted and commercial confidence declined. The scandal featured heavily in press coverage and public debate about the conduct of government procurement.
Fiscal effects included direct payments for spoiled cargo, demurrage and legal settlements; indirect effects included higher risk perceptions among international suppliers, slower future investment and reputational damage for Nigerian institutions. The crisis also exposed corruption opportunities in procurement and port operations, amplifying public anger.
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Political fallout and reform
The Cement Armada was one among several grievances levelled at the Gowon administration. It intensified perceptions of incompetence and corruption that contributed to the environment in which the July 1975 coup removed Gowon. The succeeding regimes initiated emergency port operations, renegotiated contracts where possible and introduced procurement and coordination reforms. Investments in port capacity and tighter procurement rules followed in succeeding years to reduce the risk of recurrence.
Lessons
The episode demonstrates three enduring lessons:
- Resource wealth is not a substitute for institutional capacity. Large revenues without robust procurement, legal and logistical systems invite waste and corruption.
- Central coordination matters. Major imports must be planned against national absorption capacity (ports, storage, labour), not merely project wishlists.
- Contract design is critical. Poorly drafted contracts can convert a supply into a liability when delivery cannot be absorbed; demurrage and penalty clauses must reflect operational realities.
Author’s note
The Cement Armada was a preventable disaster born of poor coordination, weak procurement controls and over-reliance on oil revenue. Massive, overlapping cement orders overwhelmed port capacity, incurred huge demurrage liabilities and damaged Nigeria’s commercial reputation.
Economic ambition must be matched by institutional capacity, otherwise wealth becomes an accelerant for waste rather than a source of development.
References
- Marwah, Hanaan. Untangling government, market and investment failure during the Nigerian oil boom: the Cement Armada scandal, 1974–1980. Business History (2020).
- Nigerian Ports Authority and related historical summaries (entries on the “Cement armada” and port expansion).
- History of Nigeria (overview and synthesis of the Gowon era and the cement affair). See authoritative histories summarising the episode.
