•Chinese, Indian traders take over Nigerian markets •Sell cheap, substandard, fake items • Muscle out indigenes
By HENRY UMAHI and JERRY OBIDIKE
Lagos International Trade fair complex on the Orile-Badagry expressway is home to three of the biggest trade associations or unions in the country namely, Association of Progressive Traders (APT), Balogun Business Association (BBA) and ASPAMDA. Hundreds of thousands of visitors throng the litter of shops, selling everything, from auto spare parts to jewellery to confectionaries.
According to president of APT, Chief Juderingo Okeke, "ever since we moved into trade fair complex in 2007 to be precise, it has been a good outing. This is because while we were at Idumota in Lagos Island, we did not have the opportunity of trade as we have at this moment.
"First, there is the advantage of proximity or location. Most of our customers come from the West Coast and beyond. So it is better for these customers, although we have people coming from Sokoto, Maiduguri and Jos among others. Again, there is a large expanse of land where you can park your car conveniently. We have developed the place in such a way that somebody coming in will know that it is an international plaza that meets the standard of any plaza you can think about in the world."
However, the opportunities of trade are threatened in the plaza due to the influx of foreign retail outfits. Okeke explains the situation: "As I am talking to you now, we are thinking of how to handle these foreigners, especially those from the Asian countries. I know that when they were given visa by the authorities, they were not given trade permit. They do the kind of business that a citizen can hardly do. They cut corners, they abuse the system."
Relationship
The Asia-Nigeria relationship has been on the upswing in recent times, particularly during the President Olusegun Obasanjo administration. Perhaps, to underscore growing Chinese influence in Nigeria, many prospective businessmen and traders have begun to learn Mandarin, even as some local languages are going extinct. No long ago, Lagos State picked 10 public schools as a pilot scheme for the teaching and learning of the Chinese language. According to the deputy governor of the state at the time, Mrs. Sarah Sosan, the essence was to put students in pole position to function globally.
As Asian companies comb Africa in search of virile markets for their products and cheap labour, Nigeria appears to be favourite hunting ground, so to say. Indeed, foreigners, particularly the Chinese, Indians and Lebanese are mushrooming in the country, making inroad in every sector of the economy, from the petroleum sector to construction, transportation and aviation, commerce and trade. Apart from 'serious' businesses, these foreign businessmen are also into such activities as running intercourse cartels in Nigeria. They import teenage girls and camp them in some apartments in Lagos for prostitution. Not too long ago, one of such camp, located in Ikeja, Lagos, was in the news. Many of such outfits are scattered in Abuja.
In the last 10 years, not less than 800 Chinese firms have berthed in Nigeria. But while the Chinese companies are flourishing, especially the textile arm, tens of local textile firms in Nigeria have gone under ostensibly as a result of cheap, foreign materials. And as textile companies closed shop, thousands of workers were thrown into the labour market. ?
The influx of foreigners into Nigeria has been attributed to her conducive business activities. Put differently, the country is home to all. According to Dr Shabihul Hassan, an Indian medical practitioner and CMD, Dr Hassan's Clinic and Diagnostic Centre, Maitama, Abuja, "foreigners live in this country as if it is their home. There are countries where foreigners are treated as second-class citizens or where people look up to them as being superior. But here in Nigeria, foreigners don't feel like foreigners because Nigerian people are very down to earth, friendly tolerant. This is a wonderful quality".
Take this: South-South state governments' recent documentary inviting foreign companies to invest in the states, offers free land and natural resources to interesting companies. Also, the investors would repatriate 100 per cent of their profits. The benefit to the state would be the stimulation of its economy through jobs creation and infrastructural development.
Indeed, the level of Sino involvement in the Nigerian economy, both at the micro and macro levels, could be referred to as an aggressive take-over. The fact is that, Asians are giving Nigerian traders and businessmen a run for their money – in the latter's own country.
Inside China Town
Before now, the Chinese, for instance, were mainly into export or just have Nigerian businessmen come into their country with portfolio of requests for made-in-China products, which are quickly manufactured according to specifications. The story is now different. First, the Chinese developed a facility called China Town at Ikoyi, Lagos where they sell various types of made-in-China products. The facility was later moved to Ojota, a Lagos suburb. A recent visit by our reporter confirmed that business is still going on there. It is not like a regular market place. It is visited mainly by bulk buyers hence the number of customers may appear low but the volume of business is massive. Some buyers actually come to place order after sampling the items displayed in the shops after which the goods are delivered to them in various parts of the country. Nigerians work as attendants in the shops, while it costs about N700,000 per annum to rent a shop at China Town.
A Chinese trader who sells lace materials in the Town and identified himself as Michun, aka, Tony said: "Yes, business is good. This one (a lace material) is N4,000 per five yards. By next week when we receive new consignment, it will come down to N3,000." He explained that the cut in price is intended to create space for the new consignment.
The retailing activities of Chinese businessmen are not restricted to China Town. Indeed, they can be found in major business districts, markets and plazas where they operate as big time importers of goods from their home country. Wholesalers and end users buy from them because they offer relatively good prices. In Lagos, the Asians operate in such places as Apapa, Ikeja (Computer Village), Alaba International Market, Amuwo GRA, Association of Progressive Traders (APT), ASPAMDA and Balogun Business Association (BBA) plazas in Trade Fair Complex along the Lagos-Badagry expressway.
It is shown that the foreigners' gain is the Nigerian traders' loss. According to Okeke, the Asians are a pain in the neck as they have reduced many Nigerian importers to fringe players in business. He said: "The activities of Asians are affecting the fortunes of Nigerian businessmen. For example, they will sell goods to you and open shop beside you and sell things at a cheaper price. You know, they have almost limitless funding or facility because their brothers at home can send any quantity of goods to them and they can sell at marginal profit and still feel good. So, you cannot compete with them; they have advantage over the Nigerian trader whose resources are limited. Sometimes, they even use Nigerians to rent shops and do other things but at the end of the day they will not keep to the agreement reached with the Nigerians. They are too crafty. So, they also get waiver due to corrupt tendencies of some government officials who do not care about the welfare or wellbeing of the country. The Asians identify such people and deal with them to the detriment of Nigeria and Nigerians."
Investigations revealed that these foreign traders have less than dignifying sales strategy. They crash the prices by flooding the markets with substandard products. Instructively, Chinese sell high quality products in Europe and America but the reverse is the case in Nigeria. Sources maintained that in some cases, dubious Nigerian businessmen go to Asia and specifically order for fake or sub-standard products with a view to maximizing profit. On the other hand, unclean businessmen take advantage of the Nigerian environment and flood the markets with sub-standard goods.
Regulation challenges
There are those who believe that the problem stems from sloppy regulation and the activities of regulating officials. Howevder, Mrs. Ify Umenyi, Director General, Consumer Protection Council, volunteered that government is up to the task as many sub-standard products have been confiscated from the Chinese. She said: "Most of the fake electrical products that we have impounded are Chinese. You, as an individual or association can stop them from bringing or selling them through legitimate means. Meanwhile, government is coming up with measures or policies to address the issues."
Herbal products without NAFDAC numbers (Quality assurance tag in Nigeria) are freely sold at the China Town. Defending the integrity of the products, a sales woman there said: "They are very good, I have been using them for a long period. They are not fake products. These products are imported in containers. But with time they will put NAFDAC numbers." It is not known if the products fall under what NAFDAC calls 'Global Listing'
However, Sir Benson Abalogu, Group Chairman/CEO, Benlock Nigeria, explained that it is not always correct to blame Nigerian businessmen for all the misdemeanours of foreigners. He added a new perspective to the issue of quality, saying: "In this part of the world, what they (players) want is profit. It is wrong to say that Nigerians are the ones that ask the Chinese to produce inferior goods. No, Nigerian importers are not the ones perse. The truth is that Chinese will accept any bid for their products from Nigerian importers. They never say no or reject your bid. They will just go ahead and produce according to your bid."
Abalogun added: "I import original things too from China. These top flight valves are imported from China and since I started selling them, no one has returned them as bad or poor quality products."
Mr. Ik Nwosu, president of Phones and Allied Products Dealers Association, Ikeja, Lagos, was blunt in his assessment of Chinese presence in Nigeria. He said they are firmly associated with faking popular brands.
"They don't have any other thing to sell than fake products. The reason they come here and sell these fake products is because, either they are duplicating one popular product or another. Any genuine businessperson that wants to project a brand knows that there are phases or procedures for you to pursue your brand. You can't just bring 10,000 pieces of unknown brands into an economy and expect to sell those products. So, they fake popular brands. The advantage for them here is that people buy anything that goes by these brand names. It is easy for them to come here and sell their fake products. We've caught them many times," Nwosu said.
According to him, Phones and Allied Products Association has an issue with some Chinese businessmen, which is currently before the Consumer Protection Council (CPC). The Chinese were allegedly caught with fake Nokia and Samsung phones. By name, the phones are Nokia and Samsung, but their internal components are not of the two brands. Nwosu's allegation has the support of Nokia and Samsung as they are equally engaged in the battle to protect and enforce their intellectual property rights in the country.
Speaking with Saturday Sun, Barrister Anayochukwu Mbah from the law firm of Jackson, Etti and Edu, representative of Nokia and Samsung in Nigeria and West Africa, said the Chinese carryout their illegal act of trading in counterfeit, sub standard phones with impunity. He added that his firm and Consumer Protection Council (CPC) are collaborating to rid the market of these dangerous products. "We have formally laid complaint by way of petition to Consumer Protection Council that there are so many counterfeit, substandard phones that are being traded in Nigeria and branded with Nokia trademark," the counsel said, adding that some Chinese were recently caught with counterfeit Nokia products and accessories at the Computer Village, Lagos. He said further that, beyond the collaborative effort with CPC, his firm has about nine cases in various law courts in Nigeria to get justice on the matter.
It was also learnt some of them are actually illegal aliens having sneaked into the country through the porous borders and or in connivance with immigration officers. The Republic of Benin axis is their preferred route.
Regarding the ease with which the Asians come into the country, Nwosu is disturbed that they are allowed entry into the economy not minding the harm their illegal activities cause individuals as well as the economy in general. Calling for a tighter regulation or control of the influx of foreigners, he said: "I believe there should be standards that must be met by any foreigner before he carries out business in a foreign country. I think any foreigner that wants to do business in Nigeria should, from his country of residence, go to the embassy and find out the requirements which will also reflect on the kind of visa he is going to obtain to come into Nigeria."
He added that this is not the case with some of the foreigners in the country as most of them are on tourist visa. His words: "What we observed here in Nigeria is that most of these Asians that come here to do business, when you get the opportunity to look into their passports, you will find out that most of them are here on tourist visa, which is very wrong. Tourist visa only allows you to come into a country, look around and go to places of interest in the country.
"Most of the Chinese obtain their visas from Kenya or any other country, which means it is difficult for them to obtain it from their countries of origin. So, what I am saying is that Nigeria is a very open country but being open without control is to the detriment of the economy of this country. There should be basic rules for every person that wants to do business in Nigeria."
He also pointed out the dangers in allowing dubious people take over the economy since it means a downward slide in development. "What I should kindly request our government to do is to put in place mechanisms to check the influx of these illegal Asians doing business in Nigeria. Most of them do not have registered business. Most of them do not have offices. They are not employing anybody. They sell their products from the boot of their cars. At the end of the day, who is losing? The economy is losing. They are not supporting this economy in anyway. And even the consumers suffer because when they buy these products and they get faulty, you cannot find these people anywhere to either claim your money or replacement or repairs. So, there should be strong strategy to curb the entry of these people or we will continue to lose."
Mr. Eke Murphy Ndidi, Assistant Training Manager, LG Electronics elaborated the harm fake Chinese products does to the economy. Hear him: "I just want to highlight the damage done to the economy by substandard products which are almost everywhere in the market. We are enriching the economies of these countries where the substandard products come from and impoverishing Nigeria. This is because when we go and import these products or allow their nationals to bring the products into the country, we do not create the avenue for major brands in the world like LG, Samsung and Nokia to grow in our country.
"When a major brand comes into the country and does business on a very clean slate, they would be moved to want to come and establish in your country. But a situation whereby they come up with products, which are meant for your country and substandard products tend to chase them away, then in most cases, they fold up and leave. This in turn brings about loss of jobs. So I would like to charge the regulatory agencies to do everything necessary to ensure they curb continuous inflow of substandard products."
Beyond trade
Chinese involvement in Nigeria goes beyond trade. In 2011, the President of China Institution of Contemporary International Relations (CICIR), Mr. Cui Liru, disclosed that the volume of trade between Nigeria and China stood at about $13.3billion. He added Chinese firms led by the China Civil Engineering Construction Corporation (CCECC) had completed over 117 construction projects in Nigeria. There are several ongoing projects being handled by Chinese including the multi-billion naira rail project in Lagos expected to run from Orile to Badagry. Many China nationals are gainfully engaged by the firms, thereby empowering them and reducing unemployment back home. An estimated 100,000 Chinese are resident in Nigeria. They are scattered all over the country but the security challenge being witnessed in the North seems to be an impediment to their hitherto unchecked movements. While the Chinese are smiling to the bank, the indigenous construction companies wallow in dire straits.
China recently granted a $1.1bn loan to Nigeria to build a light rail system in the Federal Capital Territory and rehabilitate some airports. Similarly, China had granted huge loans for building of three refineries in Nigeria. On the face value, the infrastructural loans interest appears low but the consequences are dire.
The Chinese have also invested massively in the Nigeria's oil and gas industry. When Chinese President Hu Jintao visited the country in 2006, he got four oil drilling licences for his country. There are other business deals between both countries in the petroleum sector and, today, China is one of leading buyers of Nigeria's crude oil.
Sharp practices
Sources disclosed that some Asian firms are involved in all sorts of sharp practices ranging from cooking up account records of their companies to bribing government officials to get contracts. "Some of these guys are experts in the act of cutting corners. They doctor books so as to under pay or totally evade tax. Many government officials are colluding with them and country is losing billions of naira in revenue every year," a source said.
Via: Sun News Online