Asian Investments In Nigeria: The Good, The Bad | Independent Newspapers Limited
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Asian Investments In Nigeria: The Good, The Bad

Posted: Jun 8, 2015 at 12:00 am   /   by   /   comments (0)

An estimated N15 billion is lost annually to fake or counterfeit products in terms of tax revenue to the government, income to local manufacturers and employment generation to Nigerians. Standards Organisation of Nigeria (SON) says that about 99 per cent of the fake products circulating in Nigerian markets came from China. Meanwhile, the high volume of counterfeit and sub-standard products in the domestic market is a threat to Nigeria’s economy, raising serious doubts on efforts by the federal government to resuscitate the real sector to contribute meaningfully to the gross domestic product (GDP). In this special report, Andrew Airahuobhor; Bamidele Ogunwusi; Oyeniran Apata, Nkasiobi Oluikpe, Akinwunmi King, examine both the positive and negative impact of Asian investments-particularly the Chinese-on Nigeria’s economy over the past decade and how the country can reappraise its bilateral relations with Asians, with a view to effecting some review that take the national interest into cognizance, which will ultimately revamp local industries that have gone comatose.

Inde Abdullahi

Inde Abdullahi

The word Chinese is now synonymous with fake products in Nigeria. Until officers of the Nigeria Customs Service (NCS) uncovered 75 warehouses in Kano, where prohibited textile materials worth several billions of Naira were stored, not many knew the enormity of damage this posed to Nigeria’s economy.

Although a team of Customs Valuation Officers are still collating the textile seizures to determine the quantity and value, Comptroller General of Customs, Dikko Inde Abdullahi said the textiles items discovered in one of the 75 warehouses where the valuation exercise have been concluded was valued at N4.2 billion. If the quantity in one is used to estimate the others, it would amount to more than N315 billion.

This puts the country’s textile industry under serious threat of total collapse amid efforts being geared towards revamping the industry that has badly affected by myriad of challenges including epileptic power supply.

Meanwhile, the Five Chinese nationals who were involved in the operation of the illegal warehouses are Gao Guoxu, aged 26 with passport No E12893246, Li Yang, 28 ,with Passport No E39324316 and Zhang Jiantao , 26 with Passport No E00078159. The rest are Zhao Shoumin, 26 with Passport No E32882412, and Zhou Jinxue , 35 with Passport No E23094307.

Comptroller- General of Immigration, David Parradang, OFR , disclosed that investigations by his Service revealed that three out of the five Chinese nationals do not possess valid travel documents to reside and engage in any business in Nigeria beyond the scope of their admission.

Immediate steps will therefore be taken to effect their deportation, he said while investigations are still in progress to ascertain the immigration status of the other two Chinese nationals.



The Comptroller-General further said that the Service will intensify routine mop-up operations to ease out irregular immigrants. He added that those who are law-abiding and contribute to the national economic development through Foreign Direct Investment (FDI) and technology transfer will be encouraged and given all assistance possible.

Reacting to insinuations that there are more foreign nationals doing illegal business in Nigeria, the CG Immigrations appealed to well-meaning Nigerians to oblige the Service information about such foreigners.

Responding to questions on how the Service will handle the seized textiles, the CG Customs stated that in view of its sheer volume, the Service will make report to the appropriate authorities of the Federal Government to seek direction.

Salvaging National Economy

He told reporters that the objective of the joint operation in Kano is about salvaging the national economy through the protection of the textile industry. He said the huge seizure made through intelligence network cultivated over a period of three months shows that some illegal foreigners are sabotaging Nigerian economy through their illegal business.

The CG anti- Smuggling unit had few weeks ago, stormed six warehouses in Gandun Albasa area of Kano, where textiles worth billions of Naira were uncovered.

Just last Wednesday again, the Standards Organisation of Nigeria (SON) intercepted 10 containers of suspected fake baby diapers worth over N200million allegedly imported by three Chinese nationals. The siezures took place at Railway Terminus, Ijora Olopa, Lagos.

The Director of Inspectorate and Compliance Department of the organisation, Bede Obayi, told newsmen in Lagos on Wednesday that the suspects had been handed over to the police for further investigation and prosecution.

Obayi said that various brands and unbranded baby diaper suspected to be fake or adulterated were found in 10 containers allegedly brought into the country by the suspects. He said that the stuffing of the products was done in an unhygienic environment and was capable of inflicting skin rashes and diseases when used on children.

“We intercepted the fake products through our intelligent efforts. We have seen that the products are poor in quality; they are fake, substandard and dangerous to our babies. Because of the nature of the product, which is sensitive, they should not be allowed to be packaged in this kind of environment.

“If we allow the product into our markets, they will cause damages to our babies,” he said.

Obayi said that the organisation had redoubled its efforts to stamp out substandard products from circulating in the country.

Just as cheap textiles from China have today led to the collapse of Zambia’s domestic textile industry, Nigerian textile industry is currently overwhelmed with cheap textiles from China.

China, an economic power from the Asian continent, is known for its ability to produce and manufacture goods at low costs when compared to developed economies in the West.  As Nigeria continues to seek ways and means of developing its economy and tap into its natural resources, the country is in danger of being overwhelmed with the undue influence of China’s presence in Nigeria.

Trade Relations Growth

Trade relations between both countries had increased from $2.7 billion (N531.9 billion) in 2009 to $13 billion (N2.56 trillion) currently according to the Nigeria-China Business Council (NCBC). The volume of trade within the six year period represents an increase of $10.3 billion (N2.03 trillion) or 381 per cent.

Chinese people are the various individuals or groups of people associated with China, one of the countries in the continent of Asia, either by reason of ancestry or heredity, nationality, citizenship, place of residence, or other affiliations.

For some, the rapid growth of China’s presence in Africa has been disquieting. Subsequently in the light of the more rigorous controls on importation of fake and inferior quality goods in developed economies, China has had to look towards Africa for dumping its cheap goods.

Nigeria today suffers from the importation of cheap and inferior goods from China such as sub-standard medical devices, electronic devices, etc. India too was implicated in the outcry by the then Director of NAFDAC, Prof. Dora Akunyili during her tenure, in the dumping of sub standard medical device.

In Nigeria, Chinese economic and political influence peaked under President Olusegun Obasanjo, from 1999 to 2007, and then rapidly dissipated during the subsequent Umaru Musa Yar’Adua years.

Post-independence in 1960, Chinese trade and investment in Nigeria were negligible, though Hong Kong and Taiwanese entrepreneurs had established a manufacturing presence, especially in textiles.

Balogun market in Lagos today is awash with cheap and inferior goods made in China but sold at cheap prices. This is just as Alaba market is littered with fake electronics and electrical products.

Chinese nationals are not the only Asians having negative economic influence in Nigeria. The National Agency for Food & Drug Administration & Control (NAFDAC) recently shut down Chocolat Royal, an eatery owned by a Lebanese national, Amin Moussalli. Its headquarters is at Plot 267A Etim Inyang Crescent, Victoria Island, Lagos.

According to reports, the outfit was shut down because: the company was reportedly using products which had expired as far back as 2004 to prepare meals; Most of the products did not have descriptions in English and were therefore not registered by NAFDAC; the products were stored in 40ft cold rooms which were built on sewage tanks and in front of toilets ad some of the expired products had maggots in them.

The expired products, valued at about N500 million were also evacuated and the entire building sealed.

Amin Moussalli, who owns the outfit, along with various media outlets, reportedly travels abroad to source for and purchase close-to-expiry products. This Lebanese business mogul receives these products (which ordinarily would have cost the companies colossal amount of money to dispose) mostly for free and also gets paid to evacuate them. He then ships the products in large quantities to Nigeria his food toxin dumping ground.

Six illegal 40ft cold rooms built on top of sewage (suck away pits) and in front of toilets fully stocked with alleged contaminated food products such as Westco Flakes Coconut, Blue Pearl, Westco Strawberry, Carramen, Griollons De Peches, Sirup De Glucose, Edelweiss, Sprinkle King and Kikkoman Teriyaki, ETC.

Not only that majority of these food products discovered have expired since 2004, (11- years ago) and the least 2013, the most worrisome aspect of it all was the discovery to the consternation of NAFDAC officials that the management of Chocolat Royal had revalidated the expiry dates of almost all the food products, while 90 percent of them were not even written in English language and therefore could not had been registered.

While two of the illegal cold rooms built in front of toilets were discovered at the Chocolat Royal headquarters at 267A Etim Iyang Crescent, another two were also discovered at N0 1 Karimu Ikotun resident of the Chairman, Mr Amin Moussalli both located in Victoria Island Lagos.

Reacting to the incident after the operation, Ejiofor said that NAFDAC had in their custody six persons in connection with the incident, adding that they were arrested for intentionally obstructing NAFDAC officials while on official duty.

“The suspects will be interrogated, while the food products will be sampled and taken to the laboratory for analysis, where the labels and contents will be properly analysed and at the end of the day when the reports are out, that will determine the next line of action,” Ejiofor said.

The NAFDAC director, who commended the officers and the entire team for the successful operation despite the intimidation from the staff of the offending company, further said that the food and confectionary outlet will continue to remain close to allow for proper investigation.

“They will be investigated by the Federal Taskforce on Fake and Counterfeit Drugs and Unwholesome Processed Foods, and at the end of investigation, files submitted will be reviewed and after evaluation, we would send them to our legal department and we will be advised on what to do by the legal team and if we have enough facts, then we will now proceed for prosecution,” he added.

But a press statement by the management of Chocolat Royal, on Wednesday, presented the invasion of its premises by NAFDAC as a normal routine check. They denied ever using the expired products discovered to prepare consumables for members of the public but stated that the expired food products were discovered in their “cupboard”

“The items found were never used in preparing food or confectionaries. As corporate citizens, we will work with NAFDAC to ensure that these issues are promptly resolved and any breaches if any are remedied,” the statement read in part.

Meanwhile the Director General of NAFDAC, Mr Paul Orhii after inspecting the fake and expired food products evacuated from Chocolat Royal, Thursday morning at NAFDAC enforcement office Apapa, said that the matter will be thoroughly investigated and the people involved prosecuted if found culpable.

“As you can see, these products were not even registered, not only were they not registered, they have expired, some in 2004 and they were not even written in English language, and so they could not have been registered.

“Not only that, you also noticed that the case is not only that the products have expired, some about 11 years ago, but they attempted to revalidate them, which is also a serious offence.

“They were caught in the process of using these expired products, so after investigation we will begin the prosecution. Anybody can build a cold room anywhere provided the place is not prohibited, but in this case, I understand that there was a cold room on top of sewage; suck away pit, of course you cannot use that kind of cold room to store stocks that you are going to use for the production of food for the members of the public, so that is an offence,” he said.

Orhii said that Chocolat Royal outlet will remain sealed until investigation is concluded adding that compliance with NAFDAC regulation must be ensured first, before the issue of reopening of the outlet will be discussed, but not anytime soon.

“We appreciate the role of the press in assisting us in our regulatory activities and we will ensure that all matters relating to fake and unregistered products are decisively dealt with and culprits brought to justice,” Orhii added.