CPPE Raises Concerns Over Foreign Competition in Nigeria’s Retail Market

By Adedapo Adesanya

The Centre for the Promotion of Private Enterprise (CPPE) has raised concerns over the growing participation of foreign nationals, particularly Chinese traders, in Nigeria’s retail and distributive trade.

The concerns were contained in a policy brief issued on Sunday by the chief executive of CPPE, Mr Muda Yusuf, who warned that increased foreign participation could intensify competition for Nigerian-owned businesses across sectors including textiles, phone and computer accessories, automobile spare parts, tyres, plumbing materials and household goods.

The development comes amid weak consumer demand, high financing costs and rising operating expenses that are already putting pressure on Nigerian businesses.

According to the CPPE, distributive trade remains a major source of employment and livelihoods, particularly for micro, small and medium-sized enterprises, with the sector accounting for an estimated 27.5 per cent of Nigeria’s workforce.

The organisation noted that complaints from traders have emerged across several product categories, while protests in some major commercial markets over foreign participation warrant government attention.

Recall that last week, some traders at the Lagos International Trade Fair Complex along the Lagos-Badagry Expressway protested against the alleged expansion of Chinese merchants into retail trading in the market.

The traders expressed concern that the growing involvement of Chinese merchants in retail business could threaten the survival of local businesses and displace Nigerian traders from the market.

However, the CPPE stressed that its concerns were not directed at Chinese investment or Nigeria’s broader trade relationship with China.

China remains one of Nigeria’s major trading partners and a significant source of machinery, industrial inputs, consumer goods, technology products and other merchandise used by Nigerian businesses.

Rather, the CPPE said the concern was about foreign manufacturers and suppliers moving further down the distribution chain to compete directly with Nigerian businesses.

It explained that a foreign supplier that initially sells goods to Nigerian importers and distributors could later establish retail outlets and sell directly to consumers, potentially competing with the local businesses that previously formed part of its customer base.

The think tank called for a comprehensive review of the regulatory framework governing foreign participation in Nigeria’s retail economy.

It urged relevant government agencies to examine business permits, expatriate quotas, immigration approvals and other authorisations granted to foreign nationals operating in the country.

The CPPE argued that expatriate quotas should primarily facilitate the entry of skills and expertise that are scarce or unavailable locally, noting that retail trading generally does not require scarce foreign expertise.

“For clarity, the CPPE is not calling for arbitrary restrictions or hostility towards foreign investors but a consistent and credible enforcement of existing laws, transparent rules and a clearly defined investment policy,” the organisation said.

It maintained that Nigeria should remain open to foreign investment, but that liberalisation should be aligned with the country’s economic priorities.

The group recommended stronger incentives for foreign investment in manufacturing, infrastructure, technology, agro-processing, mining, energy and other sectors where Nigeria requires capital and technical expertise.