When the Chinese come calling with unorthodox trade practices

By Don Ebubeogu

A few days ago, some traders in Lagos staged a protest against Chinese nationals allegedly involved in retail trading. The traders insist the Chinese incursion into retail trade in Nigeria threatens the survival of local businesses in the country.

The protest was staged at some markets within the Lagos trade fair complex along the Lagos-Badagry expressway.

Local manufacturers and business development analysts say the rage against the Chinese underpins what has been described as their unorthodox merchandising method in Nigeria, which stakeholders insist hurts local businesses.They lament the underhand business practices of the Chinese in Nigeria, saying many of the Chinese hawkers and retailers deceitfully entered Nigeria posing as investors only to end up as hawkers in various markets and towns. Most of the Chinese will masquerade as investors when applying for visa but end up hawking goods in Nigeria. Some of them stay in Lagos and Waybill goods to Okigwe, Awka, Afikpo and and other towns and urban areas around the country.

The influx of Chinese hawkers into Nigeria’s towns and local markets is indeed an imbalance that will create a structural crack in Nigeria’s commercial architecture

Truth is, when the factory comes to the market stall, you allow an imbalance that will create a structural crack in Nigeria’s commercial architecture.

While some observers have hastily labelled these protests as xenophobic or anti-investment, that view misses the core economic issue.

What our markets are witnessing is not healthy Foreign Direct Investment (FDI). It is the unchecked collapse of the distribution value chain.

With statistical evidence, it is obvious that everying developed and emerging economy relies on a clear commercial boundary, hence:

• Upstream Investment (FDI): Foreign capital builds factories, establishes processing lines, imports heavy machinery, and transfers technical skills. This is the investment Africa desperately needs.

• Downstream Commerce (Retail & Petty Trade): The localised network of regional distributors, wholesalers, line boys, logistics handlers, and retail stallholders.

Now let’s face this stark truth: The genius of markets like Alaba, Trade Fair, Main Market Onitsha, Ibadan, Kano, Jos and Ariaria is not just the volume of goods sold; it is the depth of the economic chain. An imported container of hardware or consumer goods typically passes through several hands: the primary merchant, the sub-wholesaler, the semi-retailer, and the street shopkeeper. That multiplier effect feeds hundreds of thousands of families, funds apprenticeships, and builds domestic capital.

When foreign manufacturers or direct importers rent stalls in local open markets to sell single items directly to end-users at ex-factory or landing prices, they create no value. They obliterate the entire intermediate ecosystem in one stroke.

Nigeria is not the first African nation to confront the dilemma of foreigners going into petty trading. Those who hesitated saw market friction boil over into civic unrest.

South Africa is a recent example, but what many may not know is that other African countries confronted this monster a few years ago

Here is the history of Chinese unfair trading practices in some African countries:

ana: Following years of tension between domestic merchants and foreign retailers in hubs like Makola, the government enforced Section 27 of the GIPC Act (Act 865). It explicitly barred non-citizens from petty retail, hawking, and open stall trading, setting strict capital floors (a minimum of $1 million in cash or capital goods) for foreign joint-venture enterprises.

Kenya: The sudden expansion of foreign retail outlets like “China Square” in Nairobi and incursions into Gikomba Market triggered massive protests by small-scale traders in 2023. The Kenyan government stepped in, audited foreign trading permits, and required foreign enterprises to pivot to manufacturing and primary wholesaling rather than street-level retail.

Zambia: When foreign nationals began taking over poultry stands, market stalls, and micro-groceries in Lusaka, widespread public outcry forced the state to pass protective trade regulations preserving small-scale market businesses exclusively for Zambians.

And the salient evil and consequences of unchecked Chinese influx into the retail chain: While you are rejoicing over the Chinese invasion of our retail value chain due to a marginal drop in prices of some commodities, take a deep breath and check the following three repercussions to the host economy if left unchecked:

• Stolen Livelihoods: Our local traders cannot compete with foreign factory owners selling directly from an open stall. When the factory gate moves to the street, the Nigerian middleman is wiped out. These aren’t just profit margins vanishing—these are school fees, rent, and the daily survival of our families.

• Bleeding Revenues: Domestic businesses bear the heavy burden of local levies and taxes. Meanwhile, undocumented foreign retailers operate in the shadows of a cash economy, straining our market infrastructure without contributing a dime to the state.

• Capital Flight: When a Nigerian merchant makes a profit, they build a home, educate a child, and invest in their community. Unregulated foreign traders expatriate every naira they make. Our economy bleeds capital, gaining absolutely nothing in return—no factories, no jobs, no future.

Protecting our people is not protectionism; it is survival.

I’m of the firm view that to save the beating heart of Nigeria’s commerce, policy makers must act decisively to:

• Ring-Fence Retail: The government must draw an unbreachable line. Foreign capital belongs in manufacturing and processing. Our market stalls belong to Nigerians.

• Enforce Borders: Stop issuing visas to foreign nationals who only come to man cash registers and offload cartons.

• Hold Markets Accountable: Penalize developers and unions who sell out our retail spaces to undocumented operators.

Protecting local trade is not protectionism; it is basic commercial sanity. Global economies zealously guard their domestic distribution networks while inviting foreign capital into industrial production.

Nigeria needs genuine partners who will build production capacity, transfer know-how, and process local raw materials. But when foreign capital becomes an open-market middleman, it ceases to be an investment—it becomes extraction.

A marginal drop in the price of plastic buckets and phone chargers might feel like a win today, but it comes at the direct expense of the Nigerian middleman’s survival. If foreign capital is allowed to take over our open-market stalls instead of building factories, we aren’t attracting foreign investment—we are subsidizing our own economic displacement.

•  Ebubeogu is the MD of Tiger Foods Ltd, Onitsha