Nigeria’s small-business owners deserve a fair chance to survive, grow and contribute to the nation’s economy. Protecting their livelihoods must, therefore, be central to the country’s investment policy, particularly as concerns mount over allegations that some Chinese businesses are moving beyond wholesale trade into direct retail sales in Nigerian markets.
The viral videos of traders in Kano confronting Chinese merchants, alongside protests at the Lagos International Trade Fair Complex, have brought this concern into sharp focus. Behind the confrontations lies a fundamental economic question: how can Nigeria attract foreign investment without allowing its indigenous traders to be pushed out of the very markets that sustain their livelihoods?
This is not a call to turn against Chinese nationals or other foreign investors. It is a call for fairness, regulatory clarity and a government that places the economic interests of Nigerians at the heart of its decisions.
One trader at the Lagos protest captured the frustration when he said: “We no longer make sales. If you import goods, they slash their prices lower than our own and sell to our customers directly.”
Such complaints deserve more than official assurances. They require a thorough examination of the law, the conditions under which foreign businesses operate and the responsibility of government to protect indigenous enterprise.
Nigeria’s investment laws generally permit foreign participation in business, subject to applicable regulations. Sections 17 and 18 of the Nigerian Investment Promotion Commission (NIPC) Act allow foreign investors to participate in Nigerian enterprises, except in activities restricted by law or included on the statutory negative list.
However, permission to invest does not mean permission to disregard Nigerian laws or operate without the necessary approvals. If a foreigner’s document of entry designates him as an investor or expert, it doesn’t extend his permission and purpose to engage in retail trading. This could amount to invasion. There are certain trades foreigners are allowed to engage in as investors, but this should preclude retail trading.
Foreign companies must comply with applicable incorporation requirements under the Companies and Allied Matters Act, investment registration obligations, tax rules, immigration regulations and relevant product standards. Foreign-owned companies or those foreigners participate in must also satisfy applicable business-permit requirements, including the Federal Ministry of Interior’s minimum paid-up capital requirement of ₦100 million.
These provisions must be enforced without discrimination. The Corporate Affairs Commission, NIPC, Ministry of Interior, Nigeria Immigration Service, Federal Inland Revenue Service, Standards Organisation of Nigeria and other relevant agencies must establish whether businesses are properly registered, appropriately licensed and compliant with their respective obligations.
Yet, beyond checking documents, the government must confront a broader policy question: should foreign investors be permitted to compete directly with local traders in every segment of retail, regardless of the consequences for local enterprise?
Foreign investment is important to Nigeria’s development. It can bring capital, technology, employment, improved production capacity and access to international markets. But its benefits must extend beyond the sale of imported goods.
The Centre for the Promotion of Private Enterprise (CPPE) estimates that distributive trade employs approximately 27.5 per cent of Nigeria’s workforce. This makes the sector particularly important to millions of Nigerians who depend on trading to support their families and build businesses.
For these traders, a shop represents more than a commercial space. It may be the product of years of savings, borrowed capital and family sacrifice. Its income pays school fees, sustains households and creates employment for shop assistants, transporters and other workers.
When an importer or manufacturer also enters direct retailing, it can control several stages of the supply chain, from importation to distribution and final sales. This may give it advantages that independent Nigerian retailers struggle to match.
The concern is not that foreign businesses should be denied competition. It is that competition must not be allowed to develop under conditions that systematically put indigenous traders at a disadvantage or enable powerful suppliers to squeeze smaller businesses out of the market.
Lower prices may benefit consumers in the short term. But the potential loss of Nigerian-owned businesses, jobs and investment capital must also be considered when government evaluates the wider economic consequences.
Nigeria cannot credibly pursue economic growth while ignoring the survival of the small businesses that sustain so many households.
The expatriate-quota system provides another important safeguard. Foreign workers should be employed in accordance with immigration rules, with expatriate positions justified by legitimate skills requirements and applicable Nigerian understudy obligations.
Where foreign nationals occupy routine retail positions that Nigerians can readily perform, the Ministry of Interior, Nigeria Immigration Service, Ministry of Labour and Productivity should investigate whether the relevant employment and immigration requirements are being met.
This is not about nationality. It is about ensuring that opportunities for Nigerian workers are not unnecessarily lost and that foreign investment contributes to skills development rather than undermining it.
Similarly, the Federal Competition and Consumer Protection Commission should investigate credible allegations of predatory pricing, exclusionary conduct or abuse of market power. Lower prices alone do not establish an offence; regulatory action must be based on evidence and the provisions of the Federal Competition and Consumer Protection Act 2018.
The government must distinguish legitimate competition from practices that unlawfully undermine other businesses.
Nigeria should learn from countries protecting their indigenous traders.
Other developing economies have demonstrated that welcoming foreign investment does not require opening every category of commerce to unrestricted foreign participation.
Countries such as Ghana have maintained restrictions on certain petty-trading activities reserved for citizens, alongside investment and employment conditions for foreign trading enterprises. Vietnam applies an Economic Needs Test to certain additional foreign retail outlets, enabling authorities to consider local market conditions before approving expansion. India has also used local-sourcing and infrastructure-investment requirements in its multi-brand retail framework.
Nigeria should study these approaches and develop a model suited to its own economy.
The country could consider reserving clearly defined low-capital activities, such as petty trading and open-market stalls, for Nigerians through an appropriate legal framework. Larger foreign retail businesses could operate under transparent conditions relating to capital, local employment, sourcing, tax compliance and skills transfer.
Such restrictions must be introduced lawfully, consistently and without targeting any nationality.
The Federal Ministry of Industry, Trade and Investment and NIPC should urgently clarify the rules governing foreign participation in wholesale, distribution and retail trade.
Working with the Ministry of Interior, Immigration Service, FCCPC, tax authorities, state governments and market regulators, they should conduct coordinated compliance checks and publish clear guidelines for investors and traders.
The Chinese Embassy should encourage its nationals to comply with Nigerian laws, while market associations should engage regulators through peaceful and lawful channels.
Above all, government must prioritise policies that expand opportunities for Nigerian-owned businesses, strengthen local production and encourage foreign investors to establish industries, warehouses, processing facilities and other enterprises that create jobs and transfer skills.
Nigeria’s doors should remain open to legitimate investment, but its economic policies must never lose sight of the citizens whose livelihoods depend on local enterprise.
The responsibility of government is not merely to attract investors; it is to ensure that investment works for Nigeria.
