In a capitalist world, that has embraced the open market. In which the prevailing rule is the rule of a willing seller, and a willing buyer can be a double-edged sword. The Nigerian textile industry is perhaps the best example of this, with the proliferation of cheaper products coming from China that are already outdoing the locally produced products.
Now, the Nigerian textile traders are getting worried, seeing that the cheaper Chinese products have already forced some of the factories to shut down since they can’t compete. The textile market is increasingly being flooded with cheaper products from China that are retailing at prices that local producers cannot sell at and still make a profit to keep their business running.
While the Nigerian suppliers might be forced to close shop by the Chinese, the Nigerian consumers couldn’t not be happier, especially those with a tight budget to work with. While talking to AFP, Nafiu Badaru a junior civil servant living in Kano, Northern Nigeria says he prefers the made-in-China fabrics since they fit his budget.
“A piece of high-quality brocade (cloth) costs around 10,000 naira ($50) which is way too expensive for me. With the same amount of money, I can buy six pieces of cheap Chinese brocade which cost only 1,500 nairas a piece and still keep some change.” Badaru told AFP.
But the local players in the Nigerian textile industry – an industry that has been in place for centuries – are crying all the way to the bank, due to the cheaper Chinese imports. This is now prompting local stakeholders to call for foreign investments instead of the cheap, mass imported Chinese products. They also want the Nigerian government to better regulate the sector.
Fatuhu Gambo’s who runs his textile business at the Kantin Kwari textile market; the biggest in West Africa. Says over the past two weeks; he has not been able to sell even a single piece of fabric.
Gambo laments, “The Chinese have effectively edged us out of business, leaving us with nothing but huge debts and heaps of goods in our shops.”
Liti Kulkul a traders’ union leader also laments, “The Chinese have taken over the importation and distribution of textiles in Kano and now they are into retail trading, which is putting our traders out of business.”
The Nigerian textile traders’ problems began about a decade ago when Africa’s most populous country opened its door to outside traders. Then, the Chinese began exporting massively cheaper textiles to Nigeria. A deal was reached through the World Trade Organization, and the Chinese were given unfettered access to the local Nigerian textile market, despite the fact the Nigerian laws does not allow foreigners to get into retail trading.
Competing local traders claim that the Chinese are recruiting locals to conduct their businesses on their behalf and in return they get a cut on the profits made. The Nigerian authorities have in the past conducted crackdowns – like in May, 2012 – through the immigration office after several complaints. They arrested and deported some 45 Chinese nationals for involving themselves in the local retail business.
Early this month, the Nigeria’s customs officials arrested four Chinese nationals for smuggling mass-produced fabrics into the country and for hiding 26 warehouses with goods imported without the import duties being paid.