CHIEF Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has raised concerns over the growing participation of foreign nationals, particularly Chinese traders, in Nigeria’s retail and distributive trade sector, warning that this trend threatens domestic enterprises and employment.

He said the development raises important questions around employment protection, fair competition, investment policy and the integrity of Nigeria’s immigration and business-permit regime.

Nigeria’s distributive trade sector is a major source of employment and livelihoods, particularly for micro, small and medium enterprises (MSMEs). According to him, the sector employs an estimated 27.5 per cent of Nigeria’s workforce, with millions of Nigerians depending on wholesale and retail trade covering textiles and fabrics, information and communications technology (ICT) products and accessories, automobile spare parts and tyres, electrical products, plumbing materials, household goods and numerous other consumer and industrial products.

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

In a statement made available to The Guardian yesterday, the economist stressed that his concern is not about Chinese investment or Nigeria’s broader economic relationship with China.

He noted that China remains one of Nigeria’s most important trading partners and leading source of the country’s imports, while Nigerian businesses have longstanding commercial relationships with Chinese manufacturers, exporters and major distributors.

The relationships, he said, has supported the supply of machinery, industrial inputs, consumer goods, technology products and numerous other products to the Nigerian economy.

He further noted that foreign investments is important to Nigeria’s development, particularly where it brings capital, technology, industrial capacity, employment, exports and new capabilities into the economy.

The issue however, he said, is the increasing movement of some foreign suppliers and traders downstream into segments of retail trade where 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,” he said.

Noting that retail trade has relatively low entry barriers and provides livelihoods for a large number of Nigerians, particularly SMEs, family businesses and self-employed citizens; he said the situation is particularly concerning at a time when the economy is grappling with unemployment, poverty, weak consumer purchasing power, high financing costs and considerable pressure on small businesses.

He argued that government policy must therefore be sensitive to developments capable of displacing domestic enterprises from sectors in which Nigerians have demonstrated adequate capacity.

According to him, reports from operators indicate that concerns over 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,” he said.

Calling for a comprehensive review of the regulatory framework governing foreign participation in Nigeria’s retail economy, he 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.

He said expatriate quotas should principally facilitate the entry of skills, expertise and capabilities that are scarce or unavailable locally, rather than become instruments for displacing Nigerians from economic activities where substantial domestic competence already existed.

“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,” he said.

He however stressed that he is not calling for arbitrary restrictions or hostility towards foreign investors, but for consistent and credible enforcement of existing laws, transparent rules and a clearly defined investment policy.

Adding that while Nigeria should remain open to foreign investment, he however stressed that openness should not mean an absence of strategic boundaries.

According to him, investment policy must distinguish between activities where foreign participation brings additional capital, technology, skills, productive capacity and exports, and activities where unrestricted foreign participation could unnecessarily displace domestic enterprises and employment.

He said foreign investment should be encouraged in manufacturing, infrastructure, technology, agro-processing, mining, energy and other sectors where Nigeria requires substantial capital and technical capabilities.

“The retail segment, however, requires a different policy approach because of its strategic importance to employment, entrepreneurship and SME development,” he argued.

He noted that many countries maintain regulatory boundaries around particular economic activities to protect domestic enterprise, preserve jobs or promote indigenous participation, saying Nigeria should similarly ensure that its investment regime reflects the country’s developmental priorities.

Advocating a balanced approach that would allow Nigeria continue deepening its economic and investment relationship with China and other countries, he said Chinese investors have significant opportunities to contribute to Nigeria’s industrialisation through manufacturing, infrastructure, technology transfer, local sourcing and export-oriented production.

“However, there should be clearer boundaries between productive foreign investment and participation in basic retail activities where domestic capacity is already abundant,” he added.

He urged the government to review foreign business permits and expatriate quotas associated with retail and distributive trade and strengthen enforcement of immigration and investment regulations governing foreign participation in reserved or restricted activities.

He also called for investigations into complaints from Nigerian traders regarding direct foreign competition at the retail level and urged authorities to ensure that expatriate quotas are tied only to demonstrable skills gaps and specialised competencies. He further called for stronger coordination among immigration, investment, trade and labour authorities, as well as clearer guidelines defining permissible foreign participation across the distributive trade value chain.

He also urged government to encourage foreign businesses to invest upstream in manufacturing, processing, technology, logistics and other productive activities rather than displacing indigenous businesses at the retail end.

“Nigeria needs foreign investment, but must also protect the entrepreneurial space sustaining millions of domestic businesses and livelihoods. The objective should not be protectionism for its own sake. It should be fair competition, regulatory integrity, employment protection and strategic investment policy,” he said.

He warned that Nigeria cannot afford a situation in which foreign manufacturers and major suppliers progressively integrate downstream and compete directly with the small businesses that originally constituted their customer base and called on the government to urgently review the regulatory framework governing foreign participation in retail trade; ensuring that business permits, immigration approvals and expatriate quotas are being used strictly for their intended purposes.

“While our investment policy must remain open, it should also be calibrated to the country’s employment, enterprise-development and industrialisation priorities,” he said.