LEAVE A COMMENT +FOLLOW COMMENTS
Recently, the Governor of Nigeria’s most cosmopolitan Lagos State was full of smiles and excitement as he hosted regional executives of America’s global retail chain, Wal-Mart. Governor Akinwunmi Ambode rolled out the red carpet and literally gave the Wal-Mart envoys a blank cheque of support from the Lagos State Government for the anticipated anchoring of Wal-Mart’s ship on Lagos and, definitely, Nigeria’s shores. The governor made the important and obvious argument regarding the status of Lagos as Africa’s most populous city and a viable market. He also was excited at the prospect of employment opportunities for Nigerians incidental to Wal-Mart’s imminent joining of other burgeoning global and regional retail chains that are already in Lagos.
The vastly reported news of Wal-Mart’s plan to branch into Nigeria -Africa’s largest economy -through the country’s commercial hub of Lagos is a game changer for all actors in Nigeria’s retail landscape. But beyond the obvious, the reception accorded to Wal-Mart and the support that has been pledged to it are typical of Africa’s race to the bottom in the search for foreign direct investments. Wal-Mart would naturally revel in the over-advertised trump card of the transnational corporate establishment as a mega employment generator. African governments have been known to not interrogate or scrutinise these assurances, which they habitually over-compensate often to the detriment of the national interest. And foreign direct investors expectedly play the script well since they are regularly courted across the continent in a zero sum competition game. It is simple: “If you do not make it ‘conducive’ for us to invest in your country, we will go elsewhere. After all, we are in a globalised economy.”
But a more constructive engagement is necessary for 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 its significant market with arguably the continent’s largest skilled middle class. Wal-Mart comes with a reputation, negative and not-so-negative. On the face of it, the Wal-Mart brand has incredible value chain development potential in the context of Lagos and Nigeria. But Wal-Mart does not have an enviable profile with regard to its dealings with desk-end employees it habitually confines to minimum wage, with the unwritten argument that such jobs are not for life. That is the reason Wal-Mart remains the contemporary global face of the historic tension between capital and labour.
In a country where the labour laws exist mainly on the books, could Wal-Mart exploit Nigeria’s situation or rise to the challenge of corporate responsibility and international best practices? The argument of job creation reminds one of the same case by transnational agricultural corporations that grab vast agricultural land across the African continent. As soon as they displace subsistent farmers from their ancestral lands, the only jobs created are those for a handful uniform-wearing, walkie-talkie-clutching security men, a few tractor drivers and hordes of cleaners, chauffeurs and domestic aides. The ceding governments often have no plan for absorbing the displaced informal agricultural communities, especially women.
Yet, it is possible to engage Wal-Mart and similar travellers on the FDI highway. In specific regard to Wal-Mart, Nigeria’s nook and cranny can serve as viable supply chain for its wares in contrast to the retail giant’s excessive dependence on China-made goods. Looking inwards is a win-win that will ultimately, if indirectly, support qualitative employment and local entrepreneurship. Beyond allotting Wal-Mart privileged real estate in Lagos and other urban centres, in addition to extrajuicy inducements of the FDI, governments should insist upon qualitative quid pro quo through creative expatriate quota laws and indigenous-friendly regulatory regime. They should demand from Wal-Mart and its ilk their strategy for developing and grounding their supply chain within the host country. From Oron, Amazano, Elele, Ntigha, Umunede, Ijebu Igbo, Ota, Ikire, Effon-Alaiye, Iseyin, Kafanchan and Malunfasi to all parts of Nigeria’s hinterlands, there is youthful energy for agriculture and various aspects of local entrepreneurship to key into Wal-Mart’s supply and value chain. Those have greater economic ramification for Nigeria than Wal-Mart’s addiction to China as the supplier of its wares. With its global network and expertise, Wal-Mart would be in the position to bridge the stubborn gap in packaging, movement and preservation of goods from Nigeria’s hinterlands to its cosmopolitan centres.
Within that confluence of manufacturing, distribution and retail, Wal-Mart can creatively be a catalyst for authentic and empowering job creation in Nigeria. But that will not be the case if all it has to offer are T-shirts from Indonesia or India, belts and handbags from China, apples from Annapolis Valley, bananas from Dominican Republic, pistachios from California, coconuts from Jamaica, etc. Let the Wal-Mart in Nigeria be a Nigerian Wal-Mart. That desire neither belies the reality of globalised retail market nor does it underestimate Nigerians’ taste for all things foreign. Rather, it reinforces Nigeria’s comparative advantage in the manufacture and supply of specific items for integration into the global retailer’s supply chain with opportunity for blending Nigerian branded products and even services into Wal-Mart’s global reach.
Another peculiarity of a Nigerian Wal-Mart is that it will inevitably diverge from the brand’s low price and egalitarian customer appeal. In Nigeria, Wal-Mart will be for the urban middle and upper class. Perhaps, rightly so; in the light of the incredible gulf between the rich and poor in Nigeria for which Wal-Mart’s wares and services will be priced out of the reach of the poorest of the poor. Add to that, the inaccessibility of slum dwellers to the retailer’s predictably choice locations in increasingly segregated Nigerian mega urban centres. Like other game changers, Wal-Mart will be a disruptive influence on Nigeria’s informal retail landscape and the country’s informal economic hinterlands. For as long as our governments are incapable of providing solution to mitigate such disruptions, let Wal-Mart remain in Lagos, Port Harcourt, Abuja and Kano.
Nigerian governments and regulators should ensure to not allow Wal-Mart and its ilk to play into the long-held but skewed philosophy of American monopolists: “that strength gives the strong in the market the right to destroy its neighbour” -the weaker others. 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 the foundations of new corporate-driven commercial and economic transformation happening across Africa.
- CIBN, Banks To Tackle Economic Challenges
- Why Building Your Business Comes Before Building Your Brand