The national president of the Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, has warned that the growing involvement of Chinese nationals in Nigeria’s retail trade poses a threat to millions of small businesses, urging the Federal Government to establish clear boundaries for foreign participation in the country’s trading sector.
Egbesola spoke against the backdrop of Monday’s protest by traders at the Lagos International Trade Fair Complex along the Lagos-Badagry Expressway over the alleged expansion of Chinese merchants into retail trading.
The protesters accused some Chinese businesses, who they said initially came into Nigeria as wholesalers, of moving into direct retail sales and competing with Nigerian traders for customers. The protest was subsequently suspended following interventions by market leaders, local government officials and the police.
Reacting to the development, Egbesola said the issue had been building gradually but had now reached a level requiring urgent government attention.
According to him, while Nigeria needs foreign investment because of its potential to create jobs, transfer technology and increase competition, such investment should not translate into unrestricted participation in areas where Nigerian small businesses operate.
“It is right for any country, including Nigeria, particularly now that we are part of the World Trade Organization, WTO, to encourage investment in the country,” he said.
“But at the same time, we should not allow these foreign investments to have unrestricted rights to our trade, particularly the last-mile trade, which is retail.”
Egbesola said the issue should not be viewed exclusively through the prism of Chinese nationals, arguing that the Federal Government should develop and enforce a clear national policy governing the participation of all foreign nationals in sectors where Nigerian Micro, Small and Medium enterprises (MSMEs) are active.
“It is not just about the Chinese people alone. It is about all foreign nationals. It is time for government to begin to enforce a firm and nationally mutual stand on this,” he said.
He expressed concern that Nigerian businesses could be displaced if foreign businesses with greater access to capital and cheaper imports compete directly with local retailers.
The ASBON president, however, argued that government must also address the structural factors giving foreign businesses a competitive advantage, rather than simply restricting them.
He cited access to cheaper finance, reliable electricity, infrastructure and simpler regulatory systems as some of the advantages he said foreign businesses may enjoy.
“Why are we not having cheaper products? It is because government has refused over time to fix infrastructure. They have more access to cheaper funds. Their fund comes at a single-digit interest rate with a long tenure period,” he said.
“They have constant electricity. We don’t have it. They have simpler regulatory systems. We don’t have it.”
Egbesola maintained that the solution was therefore not to shut Nigeria’s doors to Chinese manufacturers or investors, but to establish clear rules defining where foreign investors could operate without directly displacing local businesses.
“My position is that Nigeria should not close its door to Chinese manufacturers or investors,” he said.
“But there should be a legitimate policy to be able to make them from coming to operate below the ladder. There should be some boundaries where they can operate and where Nigerians should be able to operate and prosper.”
He said foreign participation became particularly problematic when businesses moved beyond investment and wholesale distribution into direct competition with millions of Nigerians operating at the retail end of the market.
“When foreign nationals move beyond investment and wholesale distribution into competing directly with millions of Nigerians, then it becomes a threat,” Egbesola said.
“For me, our position is that Chinese coming to the trade sector, to the last-mile sector, is a threat to Nigerian small businesses.”
Egbesola also said Nigeria could examine measures adopted by other African countries to protect citizens operating small businesses.
His comments come as Nigerian traders at the Lagos Trade Fair Complex continue to demand government intervention over alleged Chinese involvement in retail trade.
The traders have alleged that some Chinese businesses are selling directly to consumers at prices local retailers find difficult to match. Those allegations have not been independently verified.
The Nigerian Investment Promotion Commission currently states that foreign investors enjoy equal treatment in sectors outside the statutory negative list, underscoring the need for any proposed restrictions on retail participation to be clearly grounded in law and policy.
For ASBON, however, Egbesola said the immediate concern was to ensure that the pursuit of foreign investment did not come at the expense of the survival of Nigerian-owned small businesses.
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