Impact of Foreign Goods on Nigerian Consumers
Chapter One of Impact of Foreign Goods on Nigerian Consumers
Background to the Study
A major challenge in to the Nigerian economy is the development of successful domestic enterprises that provide its people with needed products and thus contributes significantly in economic development of the country. Nigeria has a geographical importance in Africa through the potential of growth and development, the abundant and everlasting natural resource, diversified culture and trade unity with other African countries, American, European, and Asian countries, that gives her an edge to float other countries’ market with its products, but charity they say begins at home; therefore, domestic products must valued and patronised in domestic market.
It has been observed that Nigerians have a negative attitude towards made in Nigeria products. The government in its efforts toward patronizing Nigerian made products made Central Bank of Nigeria (CBN) last year banned commercial banks from issuing dollar for the importation of selected products were to develop the local manufacturing sector, increase patronage of homemade goods and reduce pressure on the naira.
As the pressure on the naira continued to mount over the country’s excessive import bills and low forex receipts from exports, the federal government intensified efforts to encourage Nigerians to buy locally made goods. Individuals, organisations and politicians including Senator Ben Murray Bruce and Senator Enyinnaya Abaribe, stepped up the campaign on social media and exhibitions.
Government through monetary and fiscal policies tries to dissuade consumption of foreign products in Nigeria. These efforts make foreign goods more expensive than domestic ones. It is also on the note that, domestic products now have an improvement on the quality of goods that meets consumers’ needs in the country. The drive was given a boast with the influxes of foreign direct investments in the core production sector of the Nigerian economy. With these developments, one would be thinking that the consumers’ desire for foreign goods should be on the decrease. However, the trend seems remains on change. For instance, the consumption of foreign rice and textile products still remain high in Nigerian markets, despite the improvement in both quantities and qualities of domestic rice and textile products.
In a bid to encourage patronisation of Nigerian products, some of the products being produce have now increased in the standard and quality. The majority of cloth used now is produced with cotton or synthetics woven into fabric in large textile mills. Generally, consumers in Nigeria prefer foreign goods to made in Nigeria goods, the case of textile materials follow the same trend. The foreign textiles (Swiss-made, china made, Indian made, Korean made and Holland made) have dominated the Nigerian textile market. Imported textiles are of high quality and highly price. The majority of the middle and 12 upper class citizens use foreign textiles for their clothing. Nigerian made textiles is patronized by the lower class citizens only due to its lower cost and cannot afford the highly priced foreign textiles. Recently the Nigerian Government banned imports of all printed fabrics in order to protect its own ailing industry. The number of local textile factories in Nigeria fell to just 40, a quarter of the number in the mid 1980s. The government said it took the decision in order to protect the market against dumping when exported goods are sold below their normal value. This study therefore seeks to evaluate impact of foreign goods on Nigerian consumers.
Statement of the Problem
A major problem that has bedevilled Nigeria in her effort to develop her industrial sector is the apparent preference by Nigerians for foreign made goods. The most immediate manifestation of this problem is the seemingly intractable problem of smuggling in the face of various attempts by governments of Nigeria to curtail the indiscriminate importation of consumer goods. Some of the major attempts to check this discrimination against locally made goods include the ban on certain imports, the concerted promotional appeals to Nigerians to patronize Nigerian made goods in radios and televisions.
No amount of patriotic slogans about made in Nigeria goods has been able to correct this trait in Nigerian consumers. It has persisted to the extent that many retailers in Nigeria use the foreign tags or labels as a selling tool especially in justifying high product prices. Discrimination by Nigerian consumer is greatest in the textile industry. Nigerians, tend to ignore locally made materials in preference for imported materials. This negative attitude towards home made products contribute to the economic development of advanced countries and relegate cultural heritage of the country in various fields of arts to the background.
The following are some of the questions which this study intends to answer:
i) what the reasons for high preferences for foreign goods by Nigerian consumers?
ii) what the problems being faced by consumers in choosing between foreign and locally made products?
iii) what are the impact of the preference for foreign goods by Nigerian consumers on Nigerian economy?
Objectives of the Study
The main objective of this study is to investigate the impact of foreign goods on Nigeria consumers. The specific objectives and are to:
i) to identify the reasons for high preferences for foreign goods by Nigerian consumers
ii) to evaluate the problems being faced by consumers in choosing between foreign and locally made products
iii) to investigate the impact of the preference for foreign goods by Nigerian consumers on Nigerian economy
The research hypotheses to be tested include:
i) Consumers do not show favorable behavior towards made in Nigeria goods
ii) Consumer’s perception of made-in-Nigeria goods influence their behaviour towards the products
Significance of the Study
The study revealed that the rate of smuggling textile materials, into this country is alarming and the foreign reserve of the country is being siphoned to foreign countries and as result increasing their economic value and creating employment opportunities for these countries and in return, increase unemployment and poverty rate in our land. This research is necessary because it will serve as a good reference material for future research and even to Nigerian policy makers.
Scope of the Study
This study is limited to the impact of foreign good on Nigeria consumers. Efforts were made to determine the reasons for the preference in foreign goods other than the locally made goods in Nigeria. The research will cover policy markers, students, produces of locally made products in Nigeria.
Limitation of the study
The research work faced a lot of challenges but two of the challenges were memorable. One of it is the time constraint which limited the areas covered by the researcher. Another one was that the researcher encountered a lot of difficulties in gathering information, from many consumers as they took the researcher to be a custom official or secret security intelligence agent.
Definitions of Terms
The following terms were used in the course of this study:
Foreign goods: a good brought into a jurisdiction, especially across a national border, from an external source.
Consumers: a person who purchases goods and services for personal use.
Preference: a greater liking for one alternative over another or others
Dr. Rachael O. Folorunso, (2013). Consumers’ Buying Decisions of Foreign and Domestic
Products in Nigeria: An Analysis. European Journal of Business and Management.
Francis Arinze Iloani, (2016). Why Made-in-Nigeria Goods Suffer Low Patronage. Retrieved
on the 27th of July, 2017 from https://www.dailytrust.com.ng
SANI, Aminu Yusuf, (2005). An Evaluation of the Behaviour of Consumers Toward Made In
Nigeria Textile Materials (2001-2005)