CPPE warns on growing foreign incursion into retail, distributive trade

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

The Centre, in a statement issued by its Chief Executive Officer, Dr. Muda Yusuf, on Sunday, described  the trend as raising  important issues around employment protection, fair competition, investment policy and the integrity of the country’s immigration and business-permit regime.

It noted that with an estimated 27.5 percent of the nation’s  workforce, the Nigeria’s distributive trade sector remains a major source of employment and livelihoods, particularly for micro, small and medium enterprises.

CPPE therefore argued that the increasing penetration of foreign traders into the retail segment therefore deserves urgent policy attention to avert a negative impact on the nation’s job market.

Speaking on the China–Nigeria Trade relationship, the Centre stated that China remains one of Nigeria’s most important trading partners and the leading source of the country’s imports, with  Nigerian businesses having  longstanding commercial relationships with Chinese manufacturers, exporters and major distributors.

It therefore argued that its concern is not about Chinese investment or Nigeria’s economic relationship with China, but with the increasing movement of some foreign suppliers and traders downstream into segments of retail trade which nigerians already possess substantial capacity.

“A situation where overseas manufacturers or major suppliers sell products to Nigerian importers and distributors, and subsequently establish operations that compete directly with those same businesses at the retail end of the market, creates legitimate concerns about market structure and fair competition,” it stated.

The Centre, therefore called for a policy that is particularly sensitive to developments capable of displacing domestic  enterprises from sectors where nigerians have demonstrated adequate capacity.

This, it noted, had become imperative since the nation’s  economy is presently  grappling with unemployment, poverty, weak consumer purchasing power, high financing costs and considerable pressure on small businesses.

“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.

“There have also been protests and complaints by traders in some major commercial markets. These developments should not be ignored,” it added.

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

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

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“Expatriate quotas should principally facilitate the entry of skills, expertise and capabilities that are scarce or unavailable locally. They should not become instruments for displacing Nigerians from economic activities where substantial domestic competence already exists.

“Retail trading is generally not a specialised activity requiring scarce foreign expertise. The increasing presence of non-nationals in such activities therefore raises legitimate questions about the effectiveness of the regulatory and immigration architecture,” it stated.

It however insisted the Centre was 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.