Asks Nigerian Government to support and protect local retail investors; laments security implications posed by infiltrators; gears interventions towards recovery of Igbo economy
The Senator representing Anambra South and National Leader of the Young Progressives Party (YPP), Dr. Patrick Ifeanyi Ubah on Wednesday, raised concerns over the dominance of the Nigerian retail sector by foreigners.
The Senator raised the alarm through a Motion on urgent need for the Senate to investigate economic and security implications of dominance in the Nigerian retail sector by foreigners and to also consider appropriate legislative measures to incentivize and protect indigenous retail leaders.
According to him, since Nigeria’s independence, particularly between 1960s and 1970s, organized retail outlets in Nigeria’s first-tier cities like Lagos, Kaduna, Kano and Port Harcourt were operated exclusively by large multi-national retail outlets chains like Leventis, UTC, Lennards, Bata, Chellarams, Kingsway among others.
The Senator further observed that while foreign dominance of organized retail business in Nigeria reduced in the late 1980s and 1990s due to the negative impact of the Structural Adjustment Programme, collapse of the local manufacturing sector, loss of jobs by citizens and consequent disappearance of the middle class, recent surveys showed that foreign investors are currently dominant in retail investment in Nigeria.
The South African Shoprite and SPAR Nigeria the Dutch chain, run by Artee Group and others like Mr. Price, The Game, Woolsworth, Hawes and Curtis, Panda, owned mainly by Indians, Lebanese, Chinese and other foreigners lead the pack.
According to him, apart from offering employment opportunities to Nigerian citizens and providing revenue to government in terms of taxes, the Nigerian retail business landscape has other immense economic and security implication.
This, he said, calls for ideal policy and regulatory measures that would attract the needed foreign investment to our economy and at the same time incentivize and protect indigenous retail business investors.
Speaking further, the YPP national leader maintained that while many African countries, including ECOWAS member states such as Ghana, have policy and legislative measures in place.
Such measures, he noted, offer minimum protection to indigenous retail traders, in the case of Nigeria, however, extant policy and legal framework at both national and sub-regional levels do not offer any minimum protection to indigenous retail business operators.
Senator Ubah further alerted the federal government that while section 27 of the Ghanaian Investment Promotion Centre Act (GIPC) ACT, 2013 does not prohibit foreigners from investing in any aspect of the Ghanaian economy.
However, the GIPC goes further to specify economic activities that are “wholly reserved” for Ghanaian citizens namely “sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall at any place”
The Anambra South Senator lamented the inability of the Nigerian Laws to protect local retail investors.
He informed the lawmakers that section 27 of the GIPC Act exempts foreigners from certain retail activities and further provides minimum protection to indigenous Ghanaian retail traders against foreigners.
On the other hand, sections 17 and 18 of the Nigerian Investment Promotion Commission Act prohibits both foreigners and Nigerian citizens from engaging in certain economic activities including retail of products from such business activities without any special incentive or protection to Nigerian citizens.
Senator Ubah went further to alert the lawmakers and Nigerian government of the provisions of the NIPC Act which fails to offer any special protection to indigenous retail traders.
The ECOWAS Protocol on Free Movement of Persons, Right of Residence and Establishment further complicates the fate of the indigenous retail traders by guaranteeing citizens of ECOWAS Member States free entry of their citizens and residence without Visa for 90 days.
This Protocol, he noted, “was ratified by all ECOWAS member States including Nigeria, in 1980”.
According to the Senator, the implication is that the organized retail business in Nigeria has been flooded by multiple branch supermarkets/franchises, mega supermarkets/shopping malls, etc.
These are dominated by foreigners such as Lebanese, Chinese, Indians through their popular retail outlets such as Shoprite, Panda, SPAR, The Game, among others.
The traditional or open market retail trade which includes roadside retailers, those who operate in stalls, open markets, streets, congested streets and traffic jams are also opened to itinerant migrants retail traders from ECOWAS member States.
These include Niger Republic, Benin Republic, Ghana, Cameroon, Mali, etc., who are often seen selling wares along streets, road pavements, uncompleted buildings and such is a huge security risk to Nigeria.
Ubah stressed that recent survey of the Nigerian retail sector shows that the sector has witnessed sophistication with rapid expansion of organized retail business and increased contribution of the wholesale and retail sectors to Nigeria’s GDP from 15.58 per cent, 17.05 per cent and 18.44 percent in the first- halves of 2011, 2012 and 2013 respectively.
Meanwhile, informal or traditional retail system where Nigerians are mainly engaged is on the decline and where it exists, is fully infiltrated by foreign retail traders from Niger, Benin Republic, Ghana, Cameroun, Mali, etc. who are arguably protected under the ECOWAS Protocol on Free Movement of Persons, Right of Residence and Establishment.
Speaking on the implications of these on the present computer age, Senator Ubah said that with recent technological innovations, increased internet penetration, and use of smart phones, online retail trade has also been localized in Nigeria.
The bulk of purchases comprises of light electronics, GSM Phones, groceries, clothing, books, food items and other commodities produced locally or imported into the country, sold through popular online retail platforms such as Jumia, Konga, DealDay, and Taafoo, etc.
These online retail platforms have huge potentials for local Nigerian investors, he said.
Consequently, he urged the federal government to put in place appropriate policy and regulatory environment that would incentivize such local retail investors without compromising its international obligation under ECOWAS.
The Senator further raised concern that if no measures are taken by government to foster the growth and expansion of the indigenous retail traders, extant policy and legal framework at national and sub-regional levels may not offer clarity in terms of the incentives and protections available to them.
Hence, foreigners will continue to dominate the Nigerian retail trade landscape.
In order to avoid a situation whereby local retail investors are permanently humiliated by foreigners, he urged the Senate to intervene by investigating the propriety or otherwise of extant policy and legal framework on retail trade in Nigeria.
The country should bear in mind that if no investment is made by indigenous retail business investors in organized retail infrastructure, Nigerians may wake up one day to face the withdrawal of these dominant foreign retail outlets.
“This will create a devastating impact on our economy in terms of loss of jobs, loss of revenue and taxes and without formidable indigenous retail outlets to step into the void created by exiting foreign retail outlets,” Ubah maintained.
Responding to Senator Ubah’s Motion, the Senate mandated its Committee on Trade and Investment to organize a public hearing on the State of the Nigerian retail sector.
For this purpose, it will invite the Honourable Minister of Industry, Trade and Investment and the Nigerian Investment Promotion Commission (NIPC).
The move is with a view to receiving briefing on the extant policy and legal framework on retail trade in Nigeria and the protection offered to indigenous retail investors.
The Committee was asked to report back within two weeks.
The Upper Chamber also urged the Federal Government to review extant policy and legal framework at national and sub-regional levels that have not offered any incentives or protection to indigenous retail business investors.
In this regard, the Federal Government should adopt appropriate incentives that will attract investments in the Nigerian organized retail infrastructure such as shopping malls, mega super markets and online retail platforms.
The Senate said it held so because of the capacity of the organized retail sector to offer employment opportunities to our teeming youths and generate revenue for government.
The lawmakers also called on governments at all levels to put in place acceptable measures to protect traditional or open market retailers.
This, it noted, will help to:
avoid contravention of environmental and health safety standards,
promote revenue collection, and,
prevent harassment and constant disruption of retail trade activities by government revenue collectors or environmental and health enforcement officers.
They also urged the Nigerian Immigration Service to closely monitor the activities of citizens of ECOWAS member states who are engaged in informal retail trades in our open markets, kiosks, uncompleted buildings and other informal retail market platforms.
The move will prevent a situation where some of them will become a major threat to our national security, said the lawmakers.