Every conglomerate and multinational corporation desires to establish presence and compete in large markets. The rebasing of Nigerian economy in 2013 placed her as the largest economy in Africa, over South Africa, and far ahead of many other African counties.
According to the World Bank, with a population of nearly 180 million and a purchasing power parity, PPP, equivalent of 32 per cent of world average, a GDP per capita PPP averaging $3742.63 from 1990 until 2014, reaching an all time high of $5606.56 in 2014, Nigeria by all estimation an attractive market to global retail stores.
Today, there are quite a few global retail stores in the country including, Shoprite, Park N Shop, PEP Store, Adide, Game and Mr. Price, among others.
When the South African owned Shoprite entered Nigeria in 2005, the country’s retail industry was adjudged to be grossly under serviced with enough room for many to operate. Since then Shoprite has established over 12 stores with plans to open many more. Shoprite is percieved as the biggest retail store to berth in Nigeria today, and with its aggressive expansion drive it is certainly a formidable force in Nigeria retail business.
But that may soon change as it will be challenged by the American retail behemoth, Wal-Mart, which is making inroad into Nigeria.
If recent reports are anything to go by, Lagos may be the first city to host Wal-Mart. This was made clear as Wal-Mart’s top executives for Europe, the Middle East, Africa, and Canada, led by Shelley Broader, met with the Lagos state governor Akinwunmi Ambode recently.
It was reported that after a ‘fruitful talk, it appears Ambode was excitet at the prospect of Walmart opening up stores across the mega-city he governs’.
He said: “We have a population of over 21 million people and four million of that population is in the middle class, therefore Wal-Mart would create job opportunities for Lagos’ bulging youth demographic.
“We want to make sure that we attract as much investment in Lagos that can help us to take our youths off the streets and give them employment,” he said.
No doubt, these are words of expectations from a leader who expects that jobs are provided for his citizens. Ordinarilly, thinking of Wal-Mart coming to Nigeria will elicite some forms of joy, but not for the series of concerns raised about the company’s track records in terms of how it deals with employees and other arm twisting business dealing, particularly, the less financially endowed ones.
An article by a Nigerian Professor living in Ottawa, Canada, Chidi Oguamanam, did raise some serious issues about Wal-Mart’ operations in America and globally.
“On the face of it, the Wal-Mart brand has incredible, value-chain development potential. But Wal-Mart does not have an enviable profile in regard to its dealings with the desk-end employees it habitually confines to minimum wage.
“Though there is also the unwritten argument that such jobs are not for life. This is the reason Wal-Mart remains the contemporary global face of historic tension between capital and labour”.
Similarly, in an investigative report by New York Times, a former executive also provided detail on how Walmart “had paid bribes to obtain permits in virtually every corner of the country.”
Investigations revealed questionable payments and how the company was also forced to close operations in Germany and Korea in 2006 and has faced major challenges in Brazil and China.
It is this negative burden of a global retail player that is flagging off a lot of concerns in the minds of local retailers in Nigerian.
In an open letter to President Mohammadu Buhari and Governor Ambode, signed by its General Secretary, Gbenga Komolafe, a group, the Federation of Informal Workers Organisation of Nigeria, FIWON, denounced the planned presence of Walmart, saying they “are convinced the corporation portends serious threats and dangers that, on the whole will negate the optimistic expectations of Governor Ambode in providing jobs for Nigeria.
“We are concerned because millions of retail businesses including street and market vendors, some of who happen to be our members face the threat of being displaced from business by this global behemoth. As it is, millions of jobs have been lost in Nigeria in the last two decades as a result of Nigeria’s extreme open market policy which has turned the country to a dumping ground of, very often, fake, sub-substandard goods from all over the world especially, in recent years, China.
They argued that given Nigeria’s well known infrastructural deficiencies, “Nigerian manufactured goods stood no chance as hundreds of factories closed down, rendering millions of Nigerians jobless or with low paying work in the informal sectors of the economy”, the letter stated.
The petition reminded Nigerian authorities of Walmart antecedent, noting that the company is “renowned for its record of systematically easing out small time retailers in the communities because of its low wage, undercutting low pricing policy which is made possible by its slave camp manufacturing plants in South East Asia, and will easily uproot local retailers and neighbourhood markets in Lagos.
“We are sure of this outcome because of Walmart’s antecedence from its home country, the United States of America and also across so many other countries it operates.”
The group noted that studies after studies have shown that while Walmart offers some low paying jobs, it actually uproots several more people from their retail business, than it offers its poverty wage jobs’.
The group therefore called on Presiden Buhari and Ambode to do what they say the Public Advocate of New York did two years ago when faced with the pressure to allow Walmart enters New York, “that is, conduct a comprehensive impact assessment of what will be the effect on local retail business if Walmart enters Lagos.
Oguamanam however argued in favour of constructive engagement between Nigeria and particularly Lagos in this case. If not for anything, for the very obvious, Nigeria has a distinctive factor endowment as Africa’s largest economy and arguably the continent’s largest skilled middle class.
He therefore advised that Nigerian government and other regulators to ensure they do not allow Wal-Mart and its ilk to play into the long-held but skewed philosophy of American monopolists that give strength to the strong in the market the right to destroy its neighbour, those that are weaker.
“Wal-Mart in Africa must be prepared to operate with a commitment to balance wealth with the commonwealth, a lesson long lost to corporate America, but which must form a foundation for the new corporate- driven, commercial, and economic transformation happening across Africa and in Nigeria in particular”, Oguamanam added.
