On 15 September 2026, traders at the Lagos International Trade Fair Complex took to the streets with placards bearing messages such as “Chinese must go” and “They should go far from our market environment and not be taking our customers.”
The protesters, many of them members of the Auto Spare Parts and Machinery Dealers Association of Nigeria (ASPMDA), were not objecting simply to the presence of Chinese goods in Nigeria. They complained that Chinese businesses that had supplied Nigerian importers and wholesalers were increasingly selling directly to the same consumers, often at prices local retailers said they could not match.
The demonstration brought a growing economic tension into public view: what happens when foreign suppliers become direct competitors of the local businesses that depend on them?
For Nigerian traders, particularly those operating in import-dependent markets, the concern is existential. They must pay for shipping, customs clearance, transportation, rent, staff and other operating expenses before earning a margin on their goods. When a supplier with direct access to the manufacturer begins selling to the same customers, the local retailer can find itself competing against the very source of its merchandise.
The protests raise important questions about foreign investment, competition, regulatory enforcement and the future of small businesses in Nigeria. They also demand a distinction between legitimate commercial competition and the operation of businesses in ways that may violate Nigerian laws.
The issue is not whether Chinese businesses should be welcome in Nigeria. It is whether the rules governing market participation are clear, consistently enforced and capable of protecting local enterprise without undermining the benefits of international trade.
China’s growing share of Nigeria’s import market
The dispute is unfolding against the backdrop of Nigeria’s deepening dependence on imported goods, particularly those originating from China.
The National Bureau of Statistics data shows that Nigeria imported goods worth ₦11.01 trillion from China in the first half of 2026. That represented 39.27% of the country’s total imports of ₦28.04 trillion.
In other words, nearly four out of every 10 naira spent on imported merchandise during the period went towards goods sourced from China.
The figures also reveal a striking trend. Nigeria’s total import bill fell from ₦33.14 trillion in the first half of 2025 to ₦28.04 trillion in the corresponding period of 2026, a decline of approximately 15.4%. Yet imports from China rose from ₦9.62 trillion to ₦11.01 trillion, an increase of approximately 14.5%.
China’s share of Nigeria’s imports consequently increased from 29.03% to 39.27% in just one year.
These figures demonstrate the importance of Chinese goods to the Nigerian economy. They do not, however, establish how much of Nigeria’s retail market Chinese businesses control, how many local businesses they have displaced or what proportion of imports is sold through foreign-owned retailers. Those questions require separate evidence.
The trade imbalance is also significant. The NBS data also show that Nigeria exported goods worth approximately ₦1.09 trillion to China during the first half of 2026, compared with ₦11.01 trillion in imports from China.
This disparity raises concerns about Nigeria’s ability to capture greater value from its relationship with one of its most important trading partners.
Imports can provide consumers and businesses with affordable machinery, electronics, building materials, vehicle components, textiles and other essential products. Chinese manufacturers also supply goods that Nigerian industries use in production. The problem arises when dependence on imported products is accompanied by weak domestic manufacturing, limited local value addition and a distribution system in which Nigerian businesses struggle to compete.
From suppliers to competitors: How the business model is changing
Nigeria’s import and distribution markets have traditionally relied on several layers of commercial activity.
Manufacturers produce goods, exporters ship them to Nigeria, importers finance and clear the consignments, wholesalers distribute the products, and retailers sell them to final consumers. Each participant incurs costs and earns a margin for providing capital, logistics, storage, distribution or customer service.
Chinese manufacturers and trading companies have increasingly established commercial operations in Nigeria, allowing some to participate in multiple stages of this chain.
For local importers, the attraction of buying from Chinese suppliers is straightforward. They can source products at competitive prices, access a wide range of merchandise and respond to consumer demand without manufacturing the goods themselves.
But when a foreign supplier establishes a local outlet and begins selling directly to consumers, the commercial relationship changes. The Nigerian trader is no longer simply a customer of the supplier; the two are now competing for the same market.
TheCable’s October report described this tension through the experience of an auto spare parts retailer who said some Chinese businesses sold goods to Nigerian traders before approaching customers directly with cheaper offers.
Other traders alleged that Chinese vendors were selling in smaller quantities to consumers, bringing them into direct competition with local retailers rather than confining their operations to bulk distribution.
Chinese companies operate in different sectors and at different scales. Some manufacture locally, others import and distribute goods, while others provide services or participate in infrastructure and industrial projects.
Nevertheless, where wholesalers and retailers compete directly, the effect on smaller businesses can be severe, especially when the two sides face different costs, financing conditions or regulatory obligations.
Why Nigerian traders struggle to compete on price
Price is an important determinant of consumer choice, particularly when household purchasing power is under pressure. But the price displayed on a shop counter reflects more than the cost of manufacturing a product.
A Nigerian importer purchasing goods from China may need to finance the transaction well before the merchandise arrives. The importer must also account for freight, insurance, port charges, customs duties, clearing fees, inland transportation, storage, exchange-rate movements and other business expenses.
After the goods reach the market, the retailer must pay rent, staff allowances, security costs, levies and other operating expenses. The final selling price must cover these costs while leaving enough profit to sustain the business.
A supplier with direct access to manufacturers may be able to bypass some intermediaries, consolidate shipments, negotiate bulk discounts or operate with a different cost structure. If the supplier also has greater access to capital, the resulting price advantage can become difficult for a small Nigerian retailer to overcome.
A business operating in an expensive and inefficient commercial environment may struggle to compete with a rival that has greater purchasing power or a more efficient supply chain.
The threat extends beyond auto spare parts
The Lagos dispute has focused attention on auto spare parts and machinery, but the underlying issue could affect other import-dependent sectors.
Chinese manufacturers supply Nigeria with electrical and electronic equipment, machinery, textiles, aluminium products, household goods, vehicle components and a wide range of consumer merchandise.
In markets where Nigerian businesses depend heavily on importing finished products for resale, direct competition from foreign suppliers can place pressure on traditional distribution networks.
The implications extend beyond individual shop owners. Small and medium-sized enterprises create employment for shop assistants, warehouse workers, transport operators, clearing agents, mechanics and other service providers. A reduction in trading activity can therefore affect a wider network of livelihoods.
The Centre for the Promotion of Private Enterprise (CPPE), following the Lagos protests, warned that the growing participation of foreign traders in Nigeria’s retail and distributive trade deserved urgent policy attention.
The organisation estimated that distributive trade accounts for approximately 27.5% of Nigeria’s workforce. The sector includes businesses dealing in textiles, information and communications technology products, automobile spare parts, tyres, electrical products, plumbing materials and household goods.
The estimate underscores the potential scale of the issue. However, it would be incorrect to claim that all these jobs are threatened by Chinese retailers. Distributive trade encompasses a much wider range of businesses, and the extent of displacement attributable to foreign retail operations has not been established nationally.
Nor should policymakers assume that protecting existing intermediaries is always in consumers’ interests. Eliminating unnecessary layers in a supply chain can reduce prices and improve efficiency. The challenge is to ensure that competition takes place under fair, transparent and lawful conditions, while giving Nigerian enterprises opportunities to grow beyond low-margin retailing.
What Nigerian law says about foreign businesses
The Nigerian Investment Promotion Commission (NIPC) states that foreign enterprises and businesses with foreign equity participation must register with the commission. Foreign-owned companies may also require a business permit from the Federal Ministry of Interior, while the employment of foreign nationals can require expatriate-quota approval. Sector-specific licences and tax obligations may also apply.
These requirements are important, but company registration and investment approval are not the same as permission to conduct every type of commercial activity.
Authorities must establish whether businesses are properly registered, whether their permits cover their actual operations, whether they comply with applicable tax and customs rules, and whether any sector-specific restrictions apply.
This is especially important where businesses operate through several entities, warehouses, agents or trading accounts. Multiple accounts or related companies are not inherently unlawful, but they can complicate the monitoring of related transactions and beneficial ownership if reporting and enforcement systems are weak.
Authorities should examine whether the distinction between wholesale and retail trading is sufficiently clear for the markets in question. Where the law permits foreign participation in a particular activity, complaints about unfair competition cannot, by themselves, justify excluding a foreign operator.
Conversely, if an operator is conducting activities for which it lacks the required authorisation, regulators should enforce the law rather than leave local businesses to resolve the matter through protests.
What other African countries are doing
Nigeria is not alone in confronting concerns about foreign participation in small-scale trade. Other African countries have adopted different approaches, although their legal frameworks and recent policy changes require careful distinction.
Ghana: Investment thresholds and reserved activities
Under Ghana’s former Investment Promotion Centre Act of 2013, foreign-owned trading enterprises were generally required to meet a minimum foreign-capital threshold of $1 million and employ at least 20 skilled Ghanaians.
However, Ghana enacted the Ghana Investment Promotion Authority Act, 2026, which changed this framework. According to the Ghana News Agency, the new law reduced the minimum capital requirement for trading enterprises to $500,000 and replaced the previous workforce requirement with a provision requiring at least 75% of skilled employees to be Ghanaian.
The revised framework retains certain activities reserved for Ghanaian citizens and wholly Ghanaian-owned enterprises.
Kenya: Crackdown on small-scale foreign trading
In September 2026, Kenyan President William Ruto directed authorities to take action against foreign nationals engaged in certain small-scale trading activities, arguing that businesses requiring little capital should be protected for Kenyan citizens.
The announcement followed complaints from local traders about competition from foreign-owned businesses. It was also accompanied by anxiety among immigrant communities, some of whose members feared harassment or the loss of their livelihoods.
The Kenyan government subsequently clarified that the measures were intended to address licensing, immigration and work-permit compliance rather than impose a blanket prohibition on all foreign participation in small businesses.
The episode offers a caution for Nigeria. Governments can legitimately enforce business and immigration laws, but broad political statements and poorly communicated enforcement measures can create uncertainty for lawful investors and expose foreign residents to hostility.
Tanzania: Restrictions on specified small-business activities
Tanzania adopted the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which took effect in July 2025.
The order prohibits non-citizens from conducting specified activities, including general wholesale and retail trade, subject to exceptions such as supermarkets, specialised outlets and wholesale centres for local producers. Other restricted activities include certain small-scale services and businesses.
The order provides for penalties for violations, including fines, imprisonment and possible revocation of visas or residence permits.
Tanzania has therefore adopted a more explicit nationality-based approach to reserving specified commercial activities for citizens. Its experience also highlights the importance of enforcement: formal restrictions are effective only to the extent that authorities can identify violations and apply the rules consistently.
These examples demonstrate that countries make different choices about which economic activities should remain open to foreign participation and which should be reserved for citizens.
The most suitable approach for Nigeria must take account of its laws, market structure, employment needs, consumer interests and obligations under applicable trade and investment agreements.
The danger of turning an economic dispute into xenophobia
The language used during the Lagos protest reflected the depth of frustration among some traders. But the dispute should not become a justification for hostility towards Chinese nationals or other foreign residents.
Foreign investors and businesses can create jobs, introduce technology, expand product availability and improve access to international supply chains. Chinese companies also operate in sectors that are important to Nigeria’s infrastructure, manufacturing and industrial development.
The question that needs an answer is whether their specific business activities comply with Nigerian law and whether the market provides a fair environment for all participants.
The Lagos State Police Command publicly criticised the protest and warned against disorder. Market authorities also intervened to address the dispute and encourage a peaceful resolution. It’s unclear if the police and other relevant authorities have conducted through investigation into the traders’ complaints.
What Nigeria should do
Experts suggest that the protests should prompt a coordinated policy response involving the Federal Ministry of Industry, Trade and Investment, the NIPC, the Federal Ministry of Interior, the Nigeria Revenue Service, customs authorities, state governments and market-management bodies.
First, the government should conduct a compliance audit of foreign-owned trading businesses in affected markets. The exercise should establish which businesses are operating, what activities they conduct, whether their permits cover those activities, and whether they meet tax, customs and other applicable obligations. The same standards should apply to businesses of every nationality.
Second, authorities should clarify the rules governing wholesale and retail trade. If particular activities are reserved for Nigerian citizens, the restrictions should be clearly stated and enforced. If foreign-owned businesses are permitted to engage in those activities, local traders should not be encouraged to believe that competition alone makes such operations unlawful.
Third, Nigeria should address the structural disadvantages faced by local enterprises. Access to affordable finance, reliable electricity, better roads, efficient ports, transparent customs procedures and predictable taxation would help Nigerian businesses compete more effectively. These reforms would benefit local manufacturers and traders alike.
Fourth, the government should strengthen domestic production. Nigeria’s long-term economic interests are better served when local firms can manufacture competitive products, employ workers, develop technical skills and supply domestic and regional markets. Protecting retailers without strengthening production could preserve some existing businesses while leaving the country dependent on imported goods.
Fifth, authorities should promote partnerships that allow Nigerian enterprises to participate more meaningfully in international supply chains. Joint ventures, local distribution agreements, technology transfer and manufacturing partnerships can create opportunities for domestic businesses, provided they are commercially viable and not merely formal arrangements.
Finally, the government should establish a transparent mechanism through which traders can report unfair practices and regulatory violations. Complaints should be investigated promptly, findings should be communicated clearly, and affected parties should have access to lawful dispute-resolution procedures.
