CPPE expresses worry over foreign traders in Nigeria's retail market

The Centre for the Promotion of Private Enterprise (CPPE) has expressed worry about the increasing number of foreign traders, especially Chinese ones, in Nigeria’s retail and distribution sector.

The group said this trend might affect jobs, fair competition, investment rules, and how Nigeria enforces its immigration and business-permit laws.

This information came out in a policy brief released on Sunday. CPPE's CEO, Muda Yusuf, pointed out that Nigeria’s distribution sector is a key source of jobs for millions of Nigerians, especially those in small and medium businesses.

CPPE’s statement followed a protest by auto spare parts traders at the Lagos International Trade Fair Complex. They were against some Chinese traders who they claim are involved in retail trading.

The protesters demanded that Chinese businesses leave the market. They accused these traders of selling directly to customers and competing with local shop owners.

After the protest, traders told PREMIUM TIMES that they did not want the Chinese businesses to leave Nigeria. They just wanted them to stop retail activities around the market, as these actions hurt their sales.

CPPE noted that the distribution sector employs about 27.5 percent of Nigeria’s workforce. This sector includes businesses that deal with textiles, ICT products, auto spare parts, electrical goods, plumbing supplies, and household items.

“The increasing presence of foreign traders in retail deserves urgent policy attention,” the advocacy group stated.

CPPE clarified that its worries are not aimed at Chinese investment or Nigeria’s economic ties with China. They stressed that China is one of Nigeria’s main trading partners and the largest source of its imports.

The think tank mentioned that Nigerian businesses have long-standing ties with Chinese manufacturers, exporters, and major distributors. These relationships have helped supply machinery, industrial inputs, consumer goods, and technology to Nigeria.

“The CPPE wants to stress that our concern is not about Chinese investment or Nigeria’s economic relationship with China.

“Foreign investment is vital to Nigeria’s growth, especially when it brings in capital, technology, jobs, and exports,” they added.

However, CPPE said they are worried about some foreign traders moving into retail sectors where Nigerian businesses already operate effectively.

They explained that when foreign manufacturers or major suppliers sell to Nigerian importers and then set up shops competing with those businesses, it raises issues about fair competition.

CPPE stated that this is particularly concerning now, with Nigerian businesses facing unemployment, poverty, low consumer spending, high costs of borrowing, and other challenges.

Reports from market operators show that worries about foreign traders are growing in areas such as textiles, computer and phone accessories, auto parts, tyres, and plumbing materials.

“There have also been protests and complaints from traders in major commercial markets. These issues cannot be ignored,” they warned.

The group called for a thorough review of the regulations guiding foreign involvement in Nigeria’s retail market. They urged government agencies to look into how business permits, expatriate quotas, immigration approvals, and other permissions for foreign nationals are enforced.

“Expatriate quotas should mainly allow entry of skills and expertise that are not available locally. They should not push Nigerians out of jobs where local talent exists,” CPPE stated.

They argued that retail trading is not a specialized activity needing scarce foreign skills. The growing presence of non-Nigerians in this space raises questions about how effective Nigeria’s regulatory and immigration systems are.

CPPE said Nigeria should welcome foreign investment but with clear limits. They believe investment policies should differentiate between areas where foreign involvement adds value and areas where it might displace local businesses.

Foreign investment should be encouraged in sectors like manufacturing, infrastructure, technology, agro-processing, mining, energy, and others needing significant capital.

“The retail sector requires a different policy approach due to its importance for jobs, entrepreneurship, and the growth of small businesses,” the statement added.

The organization believes Nigeria should strengthen its investment ties with China and other countries. They want to encourage foreign investors to help with industrialization through manufacturing, infrastructure, technology transfer, and local sourcing.

However, they called for clearer limits between productive foreign investment and participation in basic retail activities where local capacity is already strong.

CPPE urged the government to reassess foreign business permits and expatriate quotas in the retail and distribution sector. They want better enforcement of immigration and investment rules and to look into complaints from Nigerian traders about direct foreign competition.

They also want stronger cooperation among immigration, investment, trade, and labor authorities. Clear guidelines should define what foreign participation is allowed in the distribution trade.

The organization further encouraged the government to push foreign businesses to invest in manufacturing, processing, technology, logistics, and other productive areas. This would prevent them from competing with local businesses in retail.

“Nigeria needs foreign investment, but it must also protect the local entrepreneurial space that supports millions of businesses and jobs,” CPPE stated.

Their goal is “fair competition, regulatory fairness, employment protection, and strategic investment policy,” not just protectionism.

“Government should quickly review the rules for foreign participation in retail trading. They must ensure that business permits, immigration approvals, and expatriate quotas are used as intended,” CPPE said.