Foreigners Taking Over Retail Trade Threatens 27.5% Of Nigerian Jobs – Economist

The increasing incursion of foreign nationals, particularly Chinese traders, into Nigeria’s retail and distributive trade is threatening jobs and displacing local businesses, the director/chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has warned.

In a statement on Sunday, Yusuf said the trend raises critical issues around employment protection, fair competition, investment policy and the integrity of the country’s immigration and business-permit regime.

According to him, Nigeria’s distributive trade sector is a major source of employment and livelihoods, particularly for micro, small and medium enterprises.

“Millions of Nigerians depend on wholesale and retail trade across textiles and fabrics, ICT products and accessories, automobile spare parts and tyres, electrical products, plumbing materials, household goods and numerous other consumer and industrial products. The sector employs an estimated 27.5 per cent of Nigeria’s workforce,” Yusuf said.

He noted that the increasing penetration of foreign traders into the retail segment therefore deserves urgent policy attention.

Yusuf explained that China remains one of Nigeria’s most important trading partners and the leading source of imports, adding that Nigerian businesses have longstanding commercial relationships with Chinese manufacturers and major distributors that have supported supply of machinery, industrial inputs and consumer goods.

“The concern is not about Chinese investment or Nigeria’s economic relationship with China. Foreign investment remains important to Nigeria’s development, particularly where it brings capital, technology, industrial capacity, employment, exports and new capabilities into the economy,” he said.

He pointed out that “the issue is the increasing movement of some foreign suppliers and traders downstream into segments of retail trade in which Nigerians already possess substantial capacity.”

He warned that a situation where overseas manufacturers sell to Nigerian importers and subsequently establish operations that compete directly with those same businesses at the retail end creates concerns about market structure and fair competition.

“Retail trade has relatively low entry barriers and provides livelihoods for a large number of Nigerians, particularly SMEs, family businesses and self-employed citizens. At a time when the economy is grappling with unemployment, poverty, weak consumer purchasing power, high financing costs and considerable pressure on small businesses, policy should be particularly sensitive to developments capable of displacing domestic enterprises,” Yusuf stated.

He added that reports from operators indicate concerns are emerging across textiles and fabrics, computers and telephone accessories, automobile spare parts, tyres and plumbing materials, with protests and complaints by traders in some major commercial markets.