One of the objectives of the Nigerian Investment Promotion Act was to open the Nigerian economy to local and foreign investments and thereby accelerate the pace of economic growth and development of the country.
Investors were therefore free to invest in the economy without restraint. The deregulation of the economy and economic liberalisation that followed encouraged investors from other parts of the world to invest in Nigeria.
Consequently, Nigeria started receiving increased inflows of foreign Direct Investments (FDI) particularly to the oil industry and to other parts of the economy including communications, power, manufacturing, commodity trading and export, seafood and commercial fish farming, among others.
The Indians were the forerunners in the influx of Asians to Nigeria. They were in Nigeria before independence. With Nigeria’s economic liberalisation and the emergence of China as a global manufacturing power house, China established trade missions with African countries, Nigeria in particular.
Within the last one and half decades, both China and India have become major trading partners of Nigeria almost surpassing that of the United Kingdom while their nationals have become very visible as investors and traders in every sector of the Nigerian economy.
Unfortunately, the large presence of Asians in retail trade in Nigeria is forcing Nigerians to vigorously repulse their involvement in that sector of the economy because it is forcing the Nigerian retail traders out of the market to the detriment of the country’s economy. If anything, the Asian traders in the retail end of businesses are competing unfairly with local retailers. For one thing, the Asian traders bring capital from their countries only to go into retail trade in this country thereby squeezing out of the market local retailers who do not have much capital to compete with the Asians. Worse still, the foreign traders contribute to the instability in the country’s foreign exchange market as they often patronize the unofficial foreign exchange sellers in the parallel market.
While liberalisation of the economy is good for the country, there is a limit to it. Liberalisation that stifles local retailers out of the market due to unfair competition among the retailers is certainly detrimental to eradicating poverty among the poor in the society and inimical to the growth of the economy. Many African countries have laws to protect their citizens from unfair competition by foreign investors.
The Nigerian situation cannot be different. Therefore, the government must put in place executive directives that would stop the continued stifling of Nigerian retail traders by Asian traders who are in the retail end of trading in the country. Other African countries are also facing the same problem from the invading Asian traders. Local traders in those countries are responding by accusing the Asians of forceful takeover of their markets and by urging their governments to legislate against such unwarranted infiltration into the retail trade of their economies. In Uganda, concerned about the plight of its citizens who are being squeezed out of the retail market, the Ugandan government was forced to direct that foreign investors in the country should quit the retail market and concentrate on manufacturing,
While the government needs to encourage more foreign investment flows into the economy, it must also continue to protect local traders, particularly those at the retail end, to survive and flourish too. This is because the operators at the retail end are the main contact with the informal sector of the economy and they must be protected from being squeezed out of the market by the foreign traders.
On its part, the National Assembly too must put in place a new legislation that will protect Nigerians who are in the retail end of businesses from being put out of the market by foreign traders and retailers in the garb of foreign investors in the country.