Chief Executive Officer of the 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 raised 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 remained one of Nigeria’s most important trading partners and leading source of the country’s imports, while Nigerian businesses had longstanding commercial relationships with Chinese manufacturers, exporters and major distributors.

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

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

He, however, said: “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 argued that government policy must therefore be sensitive to developments capable of displacing domestic enterprises from sectors in which Nigerians had demonstrated adequate capacity.

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

He noted that many countries maintained regulatory boundaries around particular economic activities to protect domestic enterprise, preserve jobs or promote indigenous participation.