The Centre for the Promotion of Private Enterprise (CPPE) has urged the Federal Government to review the regulatory framework governing foreign participation in Nigeria’s retail and distributive trade, amid growing concerns over the entry of foreign nationals, particularly Chinese traders, into the sector.
Muda Yusuf, chief executive officer of CPPE, said the development could have implications for employment, fair competition, and the survival of indigenous micro, small, and medium-sized enterprises (MSMEs), particularly in areas where local businesses already have substantial capacity.
According to Yusuf, Nigeria’s distributive trade sector employs an estimated 27.5 percent of the country’s workforce and provides livelihoods for millions of Nigerians through businesses dealing in textiles and fabrics, ICT products and accessories, automobile spare parts, tyres, electrical goods, plumbing materials and household products.
He said the growing presence of foreign traders in the retail segment required urgent policy attention, particularly as domestic businesses were already facing weak consumer purchasing power, high financing costs and other operating pressures.
‘Reports from operators suggest that concerns about foreign participation are emerging across several segments, including textiles and fabrics, computers and telephone accessories, automobile spare parts, tyres and plumbing materials,’ Yusuf said.
He added that protests and complaints by traders in some major commercial markets should prompt government attention.
The CPPE, however, stressed that its concerns were not directed at Chinese investment or Nigeria’s broader economic relationship with China.
China remains a major trading partner and source of imports for Nigeria, while local businesses maintain longstanding relationships with Chinese manufacturers, exporters and distributors supplying machinery, industrial inputs, consumer goods and technology products.
Rather, Yusuf said the concern was the movement of some foreign suppliers and manufacturers downstream into retail activities where Nigerian businesses were already established.
He said a situation in which overseas manufacturers or major suppliers sell products to Nigerian importers and distributors before establishing retail operations that compete directly with those businesses could raise concerns about market structure and fair competition.
The business advocacy group called for a comprehensive review of business permits, expatriate quotas, immigration approvals and other authorisations granted to foreign nationals operating in Nigeria’s retail economy.
Yusuf said expatriate quotas should primarily facilitate the entry of skills and expertise that were scarce or unavailable locally and should not be used in ways that displace Nigerians from activities where substantial domestic competence exists.
‘Retail trading is generally not a specialised activity requiring scarce foreign expertise,’ he said.
The CPPE consequently urged relevant government agencies to investigate complaints from Nigerian traders, strengthen enforcement of immigration and investment regulations and improve coordination among immigration, trade, investment and labour authorities.
It also called for clearer guidelines defining permissible foreign participation across the distributive trade value chain.
Yusuf said Nigeria should remain open to foreign investment but argued that investment liberalisation should be aligned with the country’s employment, enterprise-development and industrialization priorities.
He said foreign investment should be particularly encouraged in manufacturing, infrastructure, technology, agro-processing, mining, energy and other sectors where Nigeria needs capital, technical expertise and productive capacity.
The CPPE also urged foreign businesses to focus on upstream activities such as manufacturing, processing, technology and logistics rather than competing directly with indigenous businesses at the retail end.
The organisation said its proposal was not aimed at imposing arbitrary restrictions on foreign investors, but at ensuring consistent enforcement of existing laws and establishing transparent rules for foreign participation.
‘The objective should not be protectionism for its own sake. It should be fair competition, regulatory integrity, employment protection and strategic investment policy,’ Yusuf said.
The CPPE therefore urged the government to urgently review the regulatory framework governing foreign participation in retail trade and ensure that business permits, immigration approvals and expatriate quotas are being used for their intended purposes.