CPPE Raises Alarm Over Foreign Traders’ Growing Presence in Nigeria’s Retail Sector

The Centre for the Promotion of Private Enterprise has called for an urgent review of foreign participation in Nigeria’s retail and distributive trade sector, warning that the growing presence of non-Nigerian traders could threaten local businesses, employment and fair competition.

In a statement issued on Sunday, CPPE Chief Executive Officer Muda Yusuf said the organisation was particularly concerned about the increasing involvement of Chinese nationals in retail activities traditionally dominated by Nigerian micro, small and medium-sized enterprises.

According to the CPPE, Nigeria’s wholesale and retail sector supports millions of livelihoods and accounts for an estimated 27.5 per cent of the country’s workforce. It covers businesses dealing in textiles, fabrics, information and communications technology products, telephone accessories, automobile spare parts, tyres, electrical goods, plumbing materials and household products.

The organisation stressed that its position was not opposed to Chinese investment or Nigeria’s economic relationship with China, which it described as an important source of machinery, industrial inputs, technology and consumer goods.

Rather, it said its concern centred on foreign manufacturers and major suppliers moving downstream to compete directly with Nigerian importers, distributors and retailers who had previously constituted their customer base.

“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,” Yusuf said.

The CPPE argued that such competition could further weaken small businesses already struggling with high financing costs, poor consumer purchasing power, unemployment and widespread poverty.

It said complaints about direct foreign competition had emerged from traders operating in textiles, ICT products, automobile spare parts, tyres and plumbing materials. Protests and complaints reported in some major commercial markets should not be ignored, it added.

Group seeks review of permits and expatriate quotas

The private-sector advocacy group urged the Federal Government to review business permits, expatriate quotas, immigration approvals and other authorisations granted to foreigners operating in the retail sector.

It said expatriate quotas should be restricted to positions requiring specialised expertise or skills that are scarce in Nigeria, rather than being used to bring foreign nationals into activities for which local competence is readily available.

“Retail trading is generally not a specialised activity requiring scarce foreign expertise,” Yusuf said, adding that the expanding presence of foreigners in the segment raised questions about the effectiveness of Nigeria’s immigration and regulatory systems.

The organisation clarified that it was not seeking arbitrary restrictions or hostility toward foreign investors. Instead, it called for transparent rules, credible enforcement of existing laws and an investment policy aligned with Nigeria’s employment and development priorities.

‘Investment liberalisation must be calibrated’

The CPPE said Nigeria should remain open to international investment but must establish strategic boundaries that distinguish productive investment from activities likely to displace domestic enterprises.

It urged the government to prioritise foreign capital in manufacturing, infrastructure, mining, energy, technology and agro-processing—sectors where Nigeria requires substantial funding, technical expertise and industrial capacity.

Retail trade, it argued, requires a different policy approach because of its importance to employment, entrepreneurship and SME development.

The organisation recommended that the government investigate Nigerian traders’ complaints, strengthen enforcement of immigration and investment regulations, and ensure expatriate quotas are linked to demonstrable skills gaps.

It also called for improved coordination among immigration, labour, trade and investment authorities, as well as clearer guidelines on the activities foreign businesses may undertake across the distributive trade value chain.

Foreign businesses should be encouraged to invest upstream in manufacturing, processing, logistics and technology rather than displacing indigenous operators at the retail end, the CPPE added.

The organisation maintained that Nigeria could protect local jobs and businesses without undermining its relationship with China or discouraging legitimate foreign investment.

“Nigeria needs foreign investment, but it also needs to protect the entrepreneurial space that sustains millions of domestic businesses and livelihoods,” Yusuf said.

The CPPE urged the government to act quickly, warning that Nigeria could not afford a system in which foreign manufacturers and suppliers increasingly bypass or compete directly with the local businesses that helped build their market presence.