I’ve reversed the deletions.
Somehow, I missed out of this conversation. 
From reading the this thread, I’d say @dataGuru has identified a problem which most people can agree with. i.e local startups are not competitive when foreign players participate.
What I see as the problem are her recommendations. Ban this, prevent that.
If that approach is taken, the customers will have the short end of the stick. You can see NITEL pre liberalization. I think that was what @techscorpion was trying to argue.
I have written about this topic before http://oonwoye.com/2014/01/20/xenophobia-vs-protectionism/
In summary, you can help Nigeria based companies by helping them compete (cheap loans, tax waivers etc) than hindering the competition.
Would Tranzit or Red Cab have suddenly become better of Uber was banned from coming to Nigeria?
My own position is, we should prioritize getting the best to open businesses and stay in Nigeria. We should encourage the best to move into, live and work within Nigeria. It is why US has the visa lottery and Australia and co have the point based immigration systems.
Good thread all in all and there is no need to delete posts which will ruin the thread for everyone.
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sorry 4 d deletions every1. was not admitting defeat was just summarizing d long debate. d admins can fell free to reverse d deletions if they like. thanks at @techscorpion for interesting talk.
i have read you article and while it is quite interesting it may seem to be from a priviledge perspective. Focusing on “the fear” or “the fear of others” is eluding the point of this debate.
The key focus here is
access to and the cost of production.
i do not speak from theory but practical experience. The cost of production [how much it costs companies to buy what they need to make things] is not cheap in African countries. It is not the case that Nigerian companies are not doing the right thing, but simply that once a foreign company penetrates d mkt, all local companies r at risk, therefore trumping internal productivity.
They have to pay for production in the standards of our local currency (naira) n sell that way, foreign companies pay in relation to the pound/dollar/some currency with higher value relative to naira. No matter how much u pump into a business if ur running cost is unstable and consistently high, u will have high prices.
Competition is when the playing fields r equal. Uber is not competiting with “Afro cab” for example because the latter may spend N1.5million annually alone to run their gen. Then to pay for internet etc. we have not even touched requirements for the product itself. Tech companies especially. If you want a good developer [deliver a clean, scalable product] you need to spend a lot of money. So roughly u may spend close to N10 Million annually [On running costs alone]. This amounts to less than 5000 pounds/dollars. Foreign SMEs need less than a million dollars to run a viable business in nigeria. WOW.
Until the mkt is made favorable for local industries, unfair competition is not an option. This will only trump local productivity. You made reference to iroko tv in your article. The owner had a parent company in the UK b4 penetrating the nigerian mkt.
Protectionism as u call it, may actually be a good thing for the african business mkt. this was exactly what china did for 50 years. I am not afraid to say these things even though i get called names like this, but what needs to be done needs to be done. There r no sentiments or xenophobia here, simply economic and business interests.
We all make reference to China. China gave themselves the capacity to compete bth locally and internationally before opening up their economy to so called “Investments”. China became what it is today because it embraced this same “Protectionism” we all like to condemn for half a century.
The capacity to compete
is a fundamental piece of the “porters” business model n a crucial part of wealth creation.
Secondly, ur article’s second solution to this problem i completely agree with although the first seems to take the assumption that Nigeria is a place where the normal can always be expected to happen. The political govt wont do the right thing [this we know they r incapable of] so not taking into consideration the political instability is also a short coming.
Remember when technology becomes the new focus for the capitalist elites n political godfathers of nigeria, they will come here, n that may be d end of nigeria’s tech base. same as they did to the refineries, the steel companies, the textile companies and the local electrical engineers. They will support these foreign companies for personal profits n we may simply die off.
The corruption in the system, the cost of production, lack of the capacity to compete, our govt is not our side, the system is set up to downplay local firms so ‘competition’ does not even exist. What we have is ‘Competition’ btw foreign firms and ‘Competition’ btw local firms. ‘Competition’ btw local and foreign firms in Nigeria, practically does not exist as of now.
Until the above stated is checked, there is really no sweet-washing this:
Unfair competition is not an option. Many of us fail to understand the problem. It isnt fear, or xenophobia or protectionism or left-wing or laziness. We must first isolate the problem which is:
The lack of the capacity to compete effectively. Which we have absolutely no control over
before developing a solution.
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You didn’t answer this question @dataGuru. Is your solution to stop the people from “outside” from being successful?
Are you happy to be using Zinox Computers until they can compare with Apple? Happy with Innoson motors until they are as good as BMW and Toyota?
Should CNN be broadcast in Nigeria? After all, NTA is having a hard time competing and much fewer people watch local news.
Should foreign cereal be banned until Nasco and Akamu can compete with Kelloggs and Quaker Oats?
How about in the case of medical services? Should foreign medical companies be stopped from operating too until the local ones can compete? X Ray machines are rendering bone setters unemployed. Should we ban the foreign x-ray machines?
So please enlighten me on how these restrictions will work. Who and how will industries be selected? What does ability to compete mean? How do we determine what is fair and unfair? Do we focus on products or services? Both?
I retain that there should be policies that encourage local setup of companies. Policies to encourage transfer of knowledge to locals.
PS: Do you realize that even in bricklaying and plastering, the best around are from Benin Republic and Togo and are now dominating our construction industry? Are you saying the Benonise and Togolese have unfair advantage too?
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@dataGuru had earlier stated clearly that Nigeria has to increase the standard of our goods and services. Legislations that favour SMEs should be put in place and strict standard compliance laws should be setup. I cant guarantee that we will achieve the strict compliance part though cos there will always be someone in NAFDAC, SON or …, who will be happy to take bribe to bypass the whole process.
Look at the telecoms industry, we went from WAP to GPRS to Edge to 3G and now to 4G. This is because all telecoms firms must comply with ITU
(International Telecommunication Union) standards. So my take is if Nigeria can setup standards that are world class and ensure strict compliance, our goods and services will be world class.
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No one needs to conquer anybody. First, deliver great products and experiences for your end users. I won’t use your product despite its mediocre delivery because you’re Nigerian. I’m not that patriotic. Sorry.
Rather than plotting ways to conquer foreign companies/products, we should be focusing on building the best products. Lower taxes, tools, supports and guides for local businesses are a good way to start this. One thing I’m particularly interested in. That’s much I think on this.
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No one is addressing the real question i have been stressing for 24 hours now.
WHAT DO WE DO ABOUT THE FACT THAT NIGERIAN SMEs DO NOT HAVE THE CAPACITY & MEANS TO COMPETE?
OK COMPETITON IS GOOD, BUT IT MUST BE FAIR. WHEN IT IS NOT FAIR, WHAT DO WE DO ABOUT THE FACT THAT IT IS NOT FAIR RIGHT NOW?
I’m actually working and interested in this problem, very truly.
Josh Kaufman (author of Personal MBA) defines a business as:
a repeatable process that:
Creates and delivers something of value…
That other people want or need…
At a price they’re willing to pay…
In a way that satisfies the customer’s needs and expectations…
So that the business brings in sufficient profit to make it worthwhile for the owners to continue operation.
While it’s quite true that building good products (in terms of quality & value) is a requirement for businesses success & survival, many people who have commented such are missing the other side of the coin: the customers’ willingness & ability to afford your service, without which the quality, beauty or advanced nature of your solution/product is meaningless.
A business that sells heaven would not succeed if the customers are not willing or able to afford your heaven, or your heaven is priced in such a way that makes customers unwilling or unable to afford.
Any business whose products are priced beyond the customers’ willingness & ability to pay will close, even if you have the best products ever made.
Any business that does not make profit (does not have the funds to survive till future profitability) will close. It does not matter how good your products are, or how many customers are falling over themselves to buy your products.
@dataGuru made some salient points, and threw up some issues that seriously bedevil the country.
She made some salient points (although she watered her overall argument down with some weak/wrong solutions).
Why is the manufacturing industry in the country comatose?
Is it healthy that it is more cheaper & hassle-free to make our local goods outside the country?
How competetive can you be when you have to source your raw materials internationally, and your currency isn’t worth much?
What about strange pockets & palms that feel it’s their fundamental right to be greased by you?
I find it ironic that most of our “traditional” attires are imported.
The Bata shoes I wore as a child are as good as the Clark’s I wore as a teenager.
Why are the leather & textile industry near the point of death (if they haven’t died already)?
Is it because they create substandard products?
What mobile phone produced in today’s economic climate can profitably compete with the foreign one?
Many tech folks may not fully grasp the enormity/graveness of this issue because startup costs are either very low/negligible compared to manufacturing/tangible goods production.
We’ve not even talked about access to capital from banks - even the Bank of Industry that was set up for such purposes.
If the environment is conducive for businesses to thrive, businesses will thrive. No business (wo)man would run to China if (s)he could profitably manufacture locally.
I don’t feel good anytime I think deeply on, or am reminded of, these issues.
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Thanks for this.
Plus I hope OP @kenny realizes China is not particularly open to foreign businesses. Stiffling them with rules to favor homegrown alternatives…
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Hello everyone. The leftist/protectionist/[any other name available] is happy today. I came across a tweet which lead to this article. It made me remember this thread and I have come to give feedback. Like someone read my heart and made my dreams come true.
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@dataGuru: Thanks for the interesting link.
However, I think you should put the champagne on ice until we know the following:
- How many jobs is the proposed law going to free i.e. what proportion of the workforce is held by foreigners? Is it 10%, 1%, 0.1%, 0.001%?
- Does the law have any impact on consultants who are not strictly employed in the traditional sense? This includes trainers, off-shore support staff, etc?
- Moving lower down the social ladder, does the law have a tangible impact on the thousands of artisans and domestic workers from Benin, Togo, Ghana, Cameroun, Niger etc, who arrive in larger numbers through porous borders and displace more workers?
We’ve always had employment laws that favour Nigerians. Economics and exigencies have always found a way around them. What’s different now?
How is this your dream?
How many foreigners does Uber employ in Nigeria? Or the foreign companies you wanted stopped from competing with Nigerian business?
It is why you were criticized for not articulating exactly what you want.
What exactly is your issue with what exist and how do you want it solved?
it is a step forward. Be happy @techscorpion be happy. The days where Nigerians are limited to low level jobs both at home and abroad are soon coming to end. This will force local/foreign capitalist oligarchs to train nigerian workers. Because it is simply more cost efficient to do so. You guys have to understand that in the political space there is nothing personal. Businesses will naturally do what is best and most profitable for them. It is left to your govt to ensure that what is profitable for businesses is profitable for YOU & the nation.
ONE bill is passed that is in people’s favour. ONE. in 50 years. It is called progress.
Dancing… Spinning… Doing the Jumbo… Happy … 
hmmmmmmmm such a good day.
My issue is i do not know how to put this. But in reality, I know the solution is not to radically say “All foreign companies, get out” but then at the same time them being here is not beneficial to us and the economy. It is beneficial to a few though. So i really do not know how to solve this but u must agree that something needs to be done. And this looks like at least the matter is now being discussed at a higher level.
Saying you do not know how to put it drastically changes this thread from being argumentative to conversational. Nice.
So when you say a foreign company isn’t beneficial to us, in what way do you mean. Let us take like for like. I’d like to ask you, in what way is Nigerian “Red Cab” more beneficial that Uber?
Use any criteria you wish but apply it equally to both.
Ok let me break it down in the context of national interest using uber as a case study.
When uber operates in nigeria, uber collects fares, rents etc from Nigerians. This money being paid to uber was made from the Nigerian economy [Maybe not, but let’s just assume it was in the context of Nigerians]. So you are taking income generated locally and giving it to uber.
This would have been absolutely perfect for job creation and all, if:
a) Nigerian govt had a tax structure for foreign companies
b) Had a way to ensure that we retain some of Uber’s cooporate capital
c) Ensuring that Nigeria, has a say in Uber’s operations in the Nigerian mkt space. What we see instead is uber having to please 1 or 2 men and we r basically sold into financial concaves.
But this is not the case.
Now Uber is not a Nigerian company, meaning all ubers cooporate capital goes to wherever uber’s company bank is based. Where that bank is based is the only country benefiting from uber. Ubers money is not being re-invested back into Nigeria but into that country.
RedCab like u say, if a nigerian firm, will open their company account with a nigerian bank or at least a bank based in Nigeria under our financial umbrella. The banks have access to these funds to boost ratings and create capital. The CEO of redCab is a Nigerian. When he wants to eat, he will go to the market and buy dangote spagetti. His money will be re-invested into the extension of Dangote’s capitalist empire around the world for the benefit of nigeria (and dangote of cuz). If dangote gets to the airport and there is no uber, he will take redCab and pay them for their services. This is how economies keep themselves sustainable.
Employment is not help.
If you do not ur means of production and capital, all your are is simply cheap labour. Labourers own nothing and are not entitled to any wealth index. The have purchasing power for the time in which the means of exchange is valid at a certain value.
–Karl Marx
Bill gates is not the wealthiest man alive because he has $280 billion dollars in his bank account. He is because he is “WORTH” $280 billion. Meaning if you sell everything he “OWNS” you can make $280 billion in whatever the means of exchange is at the time. If he is worth $280 billion dollars in 2180 and dollars is now gold bars, u will get 280 billion gold bars for selling his assets.
Even if the entir Nigeria is filled up with glamourous roads and tall buildings, but we are still paying transport fare to China and house rents to America, We are just as poor as we always were.
The question of investment is not that of “how big is what you are building” or “how huge is the money”. It is a question of where the coooporate capital is going to. Who are you paying rent to? Who owns the trains and buses 80-90% of Nigerians take to work twice a day paying for them with money generated from within the economy. How much of these revenues goes back into the Nigerian economy.
The revenues shell gets from our economy, what percentage of it comes back to Nigeria? The only jobs uber can give Nigerians are admin level or positions where they cannot make strategic decisions. Tell me how many Nigerians are on Uber Nigeria’s board of Directors?
Stop all these lie definition of investment and employment and focus on creating an economy that is self-sufficient and at the same time globally competitive by creating sustainable income streams for the economy.
Wealth is not paper currency. Wealth is means of production + Cooporate capital + Productive capacity.
Do you now understand why all African countries are poor?
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