I read with consternation the statement credited to Governor Ambode of Lagos State when a delegation of Wal-Mart executives paid him a visit recently. There was something out of our character or un-Nigerian with the Governor’s exuberance and unusual generosity in his unequivocal commitment to assist the corporation to establish in his State. I formulated two theories as I read the report in the Punch Newspaper. The first was that Governor Ambode could be genuinely committed to job creation. The other was his obvious desire to boost the economy of Lagos State. My conclusion when I came back to myself was that Governor Ambode demonstrated clearly that he was passionately pro-business. Nevertheless, a part of me feels compelled to interrogate the propriety of Wal-Mart’s presence in my country at this time, and that is the purpose of this piece.
Now, do not get me wrong. I love and shop at Wal-Mart due to its “Save money. Live better” commercial slogan for which it is known. The corporation has three stores located within about three miles radius in my neighborhood, and that says something about their operation. And because it is a one-stop shop, one could obtain whatever he or she needs from any of its stores, from grocery to home appliances, to pharmacy. My concern with Wal-Mart is that it does not only offer products at competitively low prices, it also captures the retail market to the detriment of the smaller businesses. When, therefore Wal-Mart enters a third world country like Nigeria, where it could potentially dominate the retail market sector of the economy, I think I should be concerned.
I am also disturbed by the nature and implication of the Governor’s representation. Let us dispassionately consider what the Governor said among other things: “What I stand here to offer is the commitment to make the investment climate favourable to investors. We want to ensure that whatever it is that would make the business bigger for you, we are committed to it.” He continues, “I want to assure you that if it is in the area of land permits or authorisations for issues that relate to setting up business, we are committed to making sure that we fast-track and do it as transparent as possible to allow more business to come to Lagos.” The Governor’s generosity in language made me pause for a moment; was Ambode overwhelmed or do I say bamboozled by the presence of white men when he made those unrestrained representations? Was the Governor under some influence due to the ingestion of some intoxicating spirit that overwhelmed his capacity for discernment? Is Ambode in the same league with Rocha’s of Imo State, who had a handshake with President Obama and felt that he had “been with the Lord?” Does Ambode truly know Wal-Mart and its reputation? Is Governor Ambode apprised of the economic and social implication of establishing a Wal-Mart conglomerate in Lagos State? I thought that our experience with the foreign extractive corporations should warn us to verify any foreign corporation that intends to invest in our soil.
Let me flesh out my argument further. The retail sector is a strategic part of our economy because it employs millions of our citizens, who otherwise would be unemployed. One expects our various governments to exercise some modicum of circumspection or restraint before giving a foreign corporation permission to invest in that sector of the economy. For instance, a few years ago, the Chinese oil giant CNOOC dropped its bid to take over UNOCAL, a California energy company due to the brouhaha it generated because Americans felt that the Chinese investment in oil, in their soil was a threat to their strategic interest.
Now, when we discuss job creation and expanding economic opportunities, the expectation antenna and the ears and nose, and even the mouth of Nigerians are stimulated, and we lose our minds in the euphoria. When the world’s largest retail conglomerate with an unscrupulous history comes to town, I think we should be worried. Wal-Mart, I should warn is not Shoprite. I know of communities in the US that would not allow Wal-Mart to site any stores in their neighborhoods, and it is for a reason. Does Ambode know this? I agree that anything to provide jobs to the teeming population of Lagos State is a laudable investment, but at what cost? How many Lagosians would Wal-Mart employ? Seriously, will Wal-Mart employ our college or high school graduates? And how much will it pay its workers, the minimum wage?
Wal-Mart has a reputation to work its staff to “death” without proportionate compensation. Their condition of service is deplorable. In the West, one could appeal to the various labor agencies to redress any work-related issues. Do we have such agencies in Nigeria, and even if we had them, are they transparent and functional to protect our interests? Be honest, do you trust our courts to be on your side against your employer? Do you trust a judicial system that is notorious for selective justice? Seriously?
Wal-Mart has a tremendous economic war chest and possesses the power to penetrate and influence the highest levels of the host States. Its presence in Lagos would destroy the mom and pop businesses scattered all over Idumota, Surulere, Mushin, Kirikiri, or Yaba, etc.. Trust me; Wal-Mart will succeed in Lagos State and in any part of Nigeria for that matter. However, this is what is going to happen as a direct consequence of its presence in Lagos. First, the mom and pop businesses and the once enterprising business men that crisscross the globe as importers and exporters will collapse. Second, we will experience such social externalities like increase in crime and unrest. We are currently challenged by the menace of commercial kidnapping. Wait until the present business men and women are displaced and our unemployed population continues to swell. Are we prepared for such seismic social and economic change? I am not a prophet of doom or against attracting foreign investment. Certainly not! However, I am conversant with the repercussion of meddling with the economic nerve of a people. On the other hand, I am probably exaggerating the implication of Wal-Mart’s presence in Nigeria. Only time will tell.
Foreign investment is a wonderful idea. It could transfer technology and other good stuffs. I agree. However, we must look at the broader picture. Foreign investment is a subtle way for foreign governments to interfere in the internal affairs of the host State. And they, in most cases are not subject to the laws of the host State. I would direct our attention to the facts of a case that originated from Nigeria, Kiobel v. Royal Dutch Petroleum, decided by the US Supreme Court in 2013. That would give us an idea of how foreign corporations could undermine the host State’s laws with impunity.
How I wish Governor Ambode and other Governors in the country as well as the federal government would be that committed to boosting local businesses by creating the kind of commercial-friendly environment that Ambode eluded. How I wish our various governments would be that magnanimous to assist Nigerians in diaspora to come home and demonstrate their intellectual prowess. How I wish our copyright laws were strengthened to protect local creativities. How I wish local manufacturers would be encouraged by our governments by being their first customers. How I wish our governments would be gracious in addressing fellow citizens.
The process of obtaining land or business permits could be frustrating in Lagos as well as other States in Nigeria due to the entrenched corruption in our system. As we welcome Wal-Mart to Nigeria, my question remains, if the government of Ambode could be disposed to expediting the process of acquiring the necessary permits for Wal-Mart, a foreign corporation, how much is it willing to commit to assisting Nigerians wishing to establish in Nigeria?
SAHARA REPORTERS
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Monopoly is dangerous in any society. Walmart could very well become a monopoly and start to dictate the prices at which goods must be sold, since there is no competition. It is for this same reason I do not like Dangote monopolizing rice and cement in Nigeria.
In a city of 18million people, you need all the “Wallmarts” the world can offer. I recall that price of every day good was prohibitive before the advent of “shoprite”.
the author’s argument against Walmart and criticism of Gov Ambode’s presentation to Walmat executives is totally misplaced and contradictory. First, Walmart will contribute positively to our local economy in so many ways including but not limited to substantial job creation, enlargement to the tax base, multiplier effect on local suppliers of retail products, vertical and horizontal linkages with other sectors, and better choices and price competitiveness for consumers. It is incorrect to assume that Walmart will treat its workers worse than they are getting now locally or that retailers will be crowded out of business. These are faulty conclusions. First wages in Nigeria are already very low, Walmart can only be better not worse and the state govt can actually include protection of local workers and wages in their agreement with the company. The author seems to be looking at the American Walmart model to judge. There’s certainly no comparison because the U.S market is matured, robust and highly competitive. Kudos to Gov Ambode and we just can’t wait for Walmart to come and add value in many ways to our local economy. The Gov should be encouraged and supported in his drive to attract serious investors in the mold of Walmart
i quite agree with some of the issues raised. But also bear in mind that the Shoprites and the Wal-Mart caters for the the middle class. The informal sector will continue to thrive in Nigeria. They might have better economies of scale in some areas, but their presence cannot kill the retail sector of the economy.