What The “China Must Go” Crowd Need to Understand.
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Tellingly, whenever a topical issue that should be addressed dispassionately adorns an ethnic garb, facts and figures start dancing Azonto, and some people who are knowledgeable in such fields stay away from such topics.
This is to avoid being labeled as ethnic bigots especially from the stable of the large number of our countrymen and women whose scopes of comprehension and understanding are unfairly circumscribed by either nature or choice such that they cannot appraise anything outside the lens of ethnicity.
Traders’ feeling the heat of being asphyxiated and crowded out by foreigners is as old as the incursion of foreign traders into Nigeria which dates back to over 100 years ago.
Maybe most of you are too young to remember when market women in Ibadan led by Humani Alaga organized massive protests and petitions against the Lebanese and Syrian monopoly over textile pricing.
Also, local merchants in the North formed the Northern Traders Amalgamated Union to break the Syrian/Lebanese monopoly over the cattle and groundnut trades.
In both cases, the colonial government acknowledged that the concerns of the local traders were valid, and they worked out solutions to address the issues.
I agree that countries have the right, and should not allow an unbridled and totally unregulated business environment without certain levels of restrictions, regulations and protection for their own citizens within certain sectors, especially for a developing country economy. That is why Nigeria has the local content policy in certain sectors of the economy.
But I do not think that we should copy those countries with total restrictions on foreign participation in the retail sector of their economies.
Second, the Chinese have come to stay and our business people should understand that the world they are so conversant and comfortable with doesn't exist anymore.
However, concerns by people or countries about the rise of China should not be invalidated. It is real.
It takes a certain level of ignorance to discountenance such teutonic shift of a non military, non confrontational emergence of a traversing army of humans, that are financially capable, armed with such advanced level of technology, and sociopsychological intelligence swamping the world at a scale never before experienced in history. The world has never seen anything like it.
My worry is that we should not operate an economy without "no-go" areas for foreigners especially with the rates foreigners are venturing into so many sectors of the economy and traversing our backyards.
That is not economic nationalism, it is national security. If you have the opportunity of moving around Africa, you may understand my point.
But a big market like Nigeria should not shut its doors to foreigners, rather we should open it with one hand while having a periscope in the other hand.
Countries like Ethiopia practiced 100% no foreign participation in the retail sector for decades before recently changing the policies because they found it can also hurt the economy it promises to protect.
Instead of the 100% ban in foreign participation in the retail sector, Ethiopia recently tweaked the law such that foreigners can participate under certain conditions like a unified-ownership floor-area limits, such as multiple smaller supermarkets or larger hypermarkets within a set timeframe and specific minimum paid-up capital requirements of about $2.5 million while small shops, micro-retail, and general small-scale trading remain largely protected or restricted for domestic and local Ethiopian investors.
Nigerians have been at the receiving end of Ghana's near punitive policies which prohibits non-citizens from petty trading unless they invest at least $1 million and hire 20 Ghanaians.
Tanzania bars foreigners from 15 small-scale activities, including most retail, mobile money, salons, and small-scale mining.
Kenya, Botswana, and Zimbabwe limit foreign shareholding to 25% in reserved sectors like wholesale trade saying that the rationale is economic nationalism: protecting livelihoods, ensuring technology transfer, and shielding infant industries. Recent efforts by the president of Kenya to tweak existing laws led to massive protests across the country.
Outside Africa, countries like China allow foreign companies and investors to operate in its retail market, but they must follow strict regulatory frameworks and licensing procedures.
In China, foreign entities typically set up a Wholly Foreign-Owned Enterprise (WFOE) or a Foreign-Invested Commercial Enterprise (FICE) to retain full ownership and control without needing a local Chinese partner.
However, certain sensitive or restricted categories face tighter oversight or foreign ownership limits. Foreign investors must ensure their activities comply with China's Foreign Investment Negative List.
Indonesia restricts foreign investment in mini-markets under 400m² and supermarkets under 1,200m², while India caps single-brand retail at 51% foreign equity.
Outside the retail sector, Nigeria like many countries requires 51% Nigerian ownership in oil and gas contracts and bars foreign equity in private security. Tanzania also prohibits foreigners from tour guiding, real estate brokerage, and radio/TV stations.
Countries like Singapore, Cambodia, Japan, and South Korea impose virtually no retail equity limits. Cambodia has no foreign equity requirements for almost any sector.
The UAE now permits 100% foreign ownership across most sectors. Estonia applies no restrictions on foreign investment.
While there are advantages in open economies in that they attract capital, technology, and jobs, and studies suggest maximum FDI benefits occur where domestic distortions are minimal.
Yet unregulated liberalization carries risks as foreign capital can complicate monetary policy, drive up exchange rates, and increase market volatility.
Unrestricted entry may also crowd out local entrepreneurs in low-capital sectors, potentially worsening inequality. In countries like Nigeria where access to capital is limited and expensive, foreigners with solid financial back home can import capital and crowd out locals.
The campaigns and cries of the traders today may sound like ethnic leaning tears, but its multiplier effects would likely metastasize into national tears. That is why shouting "China Must Go" is a very pedestrian approach at framing a serious concern.
The government should not dismiss the complaints of the traders as that of a small band of disgruntled elements rather they should work towards identifying the optimal path which seeks out the sweet spot between the extremes of selective protection for livelihood-dependent sectors paired with openness to capital-intensive investment. The two are not mutually exclusive.
I have been reading about those who keep shouting that the traders should "move into production, move to production," going into production is great advice, but it is not for everybody.
Manufacturing is not for the fainthearted, moreso, whatever is manufactured would still need sellers. Government policies should be primed to ensure that those already in manufacturing find things easier.
Nigeria is a vast entity, who knows, this might present some of the businesses an opportunity to explore other parts of the country.
I am of the persuasion that what is needed is stronger regulation, not total restriction. That is why I am in this severe contest to see that agencies like NAFDAC, SON, Consumer Protection Council, Nigerian Investment Promotion Council, NDLEA and the Customs live up to their calling.
As Victor Frankl famously captured “Between stimulus and response, there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom".
Kelechi Deca
Wholesalers 