CPPE seeks review of foreign participation in Nigeria’s retail trade

THE Centre for the Promotion of Private Enterprise has called for an urgent review of foreign participation in Nigeria’s retail and distributive trade, citing growing concerns over competition, employment and the survival of indigenous small businesses.

The group, led by its Chief Executive Officer, Dr Muda Yusuf, said the increasing participation of foreign nationals, particularly Chinese traders, in retail activities was creating concerns about the effectiveness of Nigeria’s business-permit, immigration and expatriate-quota regimes.

In a statement issued on Sunday, the CPPE said retail and distributive trade remained a major source of livelihoods for Nigerians, with the sector accounting for an estimated 27.5 percent of the country’s workforce.

Millions of Nigerians operate businesses across segments including textiles and fabrics, ICT products and accessories, automobile spare parts and tyres, electrical goods, plumbing materials and household products.

The CPPE said the growing presence of foreign traders in these segments therefore required urgent policy attention, particularly at a time when Nigerian businesses were contending with weak consumer purchasing power, high financing costs, unemployment and rising operating pressures.

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Foreign suppliers moving downstream

The organisation stressed that its concerns should not be interpreted as opposition to Chinese investment or Nigeria’s broader economic relationship with China.

China remains one of Nigeria’s major trading partners and a significant source of imports, while Nigerian businesses maintain extensive commercial relationships with Chinese manufacturers, exporters and distributors.

According to the CPPE, foreign investment remains important where it brings capital, technology, industrial capacity, employment, exports and new capabilities into the Nigerian economy.

However, it raised concerns over situations where foreign manufacturers or major overseas suppliers move downstream from supplying Nigerian importers and distributors to establishing businesses that compete directly with those same customers at the retail end.

The organisation said such a development could alter the competitive structure of the market and put additional pressure on indigenous businesses.

“Retail trade has relatively low entry barriers and provides livelihoods for a large number of Nigerians, particularly SMEs, family businesses and self-employed citizens,” the group said.

It added that reports from operators indicated growing concerns across textiles, fabrics, computers and telephone accessories, automobile spare parts, tyres and plumbing materials.

The CPPE also cited protests and complaints by traders in some major commercial markets as developments that should receive government attention.

CPPE questions expatriate quotas

The organisation called for a comprehensive review of business permits, expatriate quotas, immigration approvals and other authorisations granted to foreign nationals operating in Nigeria’s retail economy.

It argued that expatriate quotas should primarily facilitate the entry of skills and expertise that are scarce or unavailable locally.

“Retail trading is generally not a specialised activity requiring scarce foreign expertise,” the CPPE said, arguing that the increasing presence of non-Nigerians in such activities raised questions about the effectiveness of the country’s regulatory and immigration framework.

The group, however, said it was not advocating arbitrary restrictions or hostility towards foreign investors.

Instead, it called for consistent enforcement of existing laws, transparent rules and a clearly defined investment policy.

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Group wants calibrated investment policy

The CPPE said Nigeria should remain open to foreign investment but argued that investment liberalisation should reflect the country’s development priorities.

It recommended that foreign investment be particularly encouraged in areas such as manufacturing, infrastructure, technology, agro-processing, mining, energy and other sectors where Nigeria requires substantial capital and technical expertise.

Retail, it said, required a different policy approach because of its importance to employment, entrepreneurship and the development of small and medium-sized enterprises.

The organisation urged the government to review foreign business permits and expatriate quotas linked to retail and distributive trade, investigate complaints from Nigerian traders and strengthen enforcement of immigration and investment regulations.

It also called for stronger coordination among immigration, investment, trade and labour authorities, alongside clearer rules defining permissible foreign participation across the distributive trade value chain.

The CPPE further urged foreign businesses to focus on manufacturing, processing, technology, logistics and other productive activities rather than competing directly with indigenous businesses at the retail end.

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The organisation said Nigeria needed to strike a balance between attracting foreign capital and protecting the entrepreneurial space that supports millions of domestic businesses.

“Foreign investment should be particularly encouraged in manufacturing, infrastructure, technology, agro-processing, mining, energy and other sectors where Nigeria requires substantial capital and technical capabilities,” it said.

It added that the objective should be fair competition, regulatory integrity, employment protection and strategic investment policy rather than protectionism.

The CPPE therefore urged the Nigerian government to urgently examine the regulatory framework governing foreign participation in retail trade and ensure that business permits, immigration approvals and expatriate quotas are being used for their intended purposes.