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…Need for local content in percentage of goods on sale stressed

Contrary to trending belief that the sudden surge in foreign e-Commerce and shopping malls operators into the economy translates to answers to the Federal Government’s quest for foreign direct investment (FDI), a report released by Business Hilights Economic Research Team (BHERT), has shown that it gains extremely nothing but loses a lot in capital flight vide repatriations.

Accordingly, experts are calling for a local content policy that will stipulate the percentage of foreign and local goods that must be sold by foreign-owned shopping malls to save indigenous manufacturers and local markets.

But explaining more on the characteristics of related investments during the course of this research, the Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf said portfolio investors are investors that do not really come to stay.

To him, “they come into an economy with their money only and use same to drain whatever they can see and as soon as things are not favouring them, they withdraw their money and fly away.”

“Such investors do not build structures or create a sustainable growth plan because they are just passersby who in real sense hardly contribute to the growth or any economy they entered.

Yusuf’s explanations fit into the life and modus operandi of businesses like lotto, shopping mall, e-Commerce, banks and other service sector businesses.

In the same vein, a development economist who pleaded anonymity said “Viewing businesses like shopping malls and e-Commrece that will display over 90 per cent of goods manufactured by either the country of the investors or others instead of Nigeria as FDI is the height of misunderstanding how economies grow”.

“This is the wrong kind of business or FDI Nigeria needs at this critical juncture of its development because the underlying philosophy and ethos as stated by its promoters undermines the very essence of what we as a country are trying hard to develop in our country – an economy which is not foreign or imported consumer goods-dependent.

According to him, “For every ONE DOLLAR BROUGHT IN and invested by companies such as shopping malls, we can be certain as much as FIFTY DOLLARS is TAKEN OUT”.

“This invariably undermines the same struggle that CBN is waging to stabilise and strengthen our naira due to the import dependence habit of Nigerians and our economy. So, in other words, where such shopping malls may have brought in say $1m to Nigeria for setup and stock, it may end up taking out fifty times more than that which is $50m in say another five years.

“If you can be smart enough to notice at these shopping malls, you will find out that they continuously selects the best materials from all over the world for their products designs, with a focus on the ‘home’ and ‘life’, while 80 per cent of the designs are from Japan, Korea, Sweden, Denmark, Singapore, China, and Malaysia.

“Currently, zero attention is paid to how we can grow the Nigerian economy and shopping malls are springing up without due regulation as to the percentage of local and foreign goods that must be on the counter as the way foreign investors are opening up shopping malls here and there is becoming embarrassing.

“A clear lack of regulation, sales and socks specifications to some extent, show that we are bereft of ideas as a nation at the governance policy level, but to the detriment of Nigeria.

Continuing, the expert said “Clearly, something needs to be done at the policy level when it comes to the quality of FDI’s such that we can systematically assess, configure and structure such investment flows to yield some basic and desired deliverables for the Nigerian economy, such as quality local product inputs, preferably manufactured using abundant resources or even imported raw materials.

“The existing scenario where a Chinese, Japanese or European company would sit somewhere in their country and more or less decide to open retail shops for their products in Nigeria without recourse to possible benefits for Nigeria and its people should not be allowed to continue without challenge.

“Any such challenge must however be well thought out and presented so that a positive win-win outcome for everyone especially the Nigerian people.

In an earlier report published last week, preliminary findings on the growing trend in e-Commerce and foreign dominated shopping malls in Nigeria showed that four key discoveries Vis:

One; In the next 20 years or less, traditional market places where aged market women and men display their wares on grounds, tables and shops may give way for more compact and well sophisticated shopping malls controlled by foreign investors.

Two; Within the period, the traditional markets starting from major cities like Lagos, Abuja and Port Harcourt will begin to be deserted as traffic will grow in the e-Commerce malls currently known as shopping malls.

Three; The final kill of the traditional African market places will be when the shopping malls will take over sales of all local goods including food stuffs known for the traditional market places (like Iddo, Ketu, Mile 12 and others in Lagos).

Four; Again, the final disappearance of traditional markets which are still thriving along the streets across the country will be when states governments will ban street trading as part of drives to consummate the dream of mega cities. At this point, traffic will, instead of moving to the traditional markets, go to e-Commerce venues and shopping malls which by then are already selling everything sold at the traditional markets.

Five; Currently, not up to 10 per cent of e-Commerce and digitally driven shopping malls in Nigeria is owned by Nigerians, but mainly foreign investors from South Africa, EU, US, Lebanon, Middle East and others.