Foreigners and business in Nigeria (1)

businessIT is 10a.m. on any Saturday in the 1950s in Port Harcourt. Kio is visiting his friend Reni whose Lebanese/Syrian father owns a textile shop in Port Harcourt.

The father is in the shop drinking the inevitable coffee in a very small cup.Kio has never understood why Reni’s father and everyone else down Aggrey Road should drink coffee in these ridiculously small cups; why can they not have a decent sized cup to drink the coffee – strong and black almost like crude oil. Reni’s father, Gadri is kind and always gives Kio one penny and some sweets.

Reni lives with his father upstairs – beautiful apartment, with rugs over polished parquet floors, smelling of incense and Dettol. Down the whole of Aggrey Road, from No. 1 to about No. 50 on both sides of the road are Lebanese/Syrian shops selling mostly textiles; (we did not know the difference between Lebanese and Syrian) occasionally a shop selling radios, linoleum, or a travel agency etc would appear.

They lived near the Africans who occupied the rest of Port Harcourt from Victoria Street to Creek Road. The European merchant shops of John Holt, G.B. Olivant, Kingsway (English), UTC, (Swiss) CFAO, and SCOA, (French) were further up to what is now Nnamdi Azikiwe Street – forming a frontline of European shops behind which was the GRA (Government Reservation Area) where the European – French, German, and English lived.

Even then we noticed the difference between the Arabs and the Europeans although we grouped them all as white i.e. as Oyibo / Ndiocha / Bekin/ Kora. One of Mr. Gadri’s brothers, owned the three cinemas in Port Harcourt; two other brothers owned other textile shops further down Aggrey Road; a cousin owned the bakery, another the hardware stores, etc.

Another relative owned the haulage company and it would seem Lebanese/ Syrians owned any other business which the European would not do.

The Lebanese had their families in Port Harcourt, married and unmarried there or in Aba, where they had a similar set up. This is why many Lebanese/ Syrians were born in Nigeria and claim Nigerian citizenship.

Thus the Chagouris are Pitakwa (Port Harcourt) boys; others owned Hotels – Cedar Hotel – an excellent hotel behind the main market, on Harbour road in an up market residential area.

In the early 50s, there were a few Indians but their population was to grow when the companies they established in Lagos started to grow nationally. The Lebanese, Syrian, on the other hand, grew their business in situ e.g. in Lagos, Aba, Port Harcourt, Calabar, Ibadan, Kano, Kaduna.

They were local people, well known in the local communities where they lived. They lived usually among or near the Nigerian, some married Nigerian women and there are several class A Nigerian women who came from this union – one married a Vice President, others married Generals, Bankers, Doctors, and Lawyers, etc. I did not see any Indian marrying a Nigerian.

The pattern of business described above was replicated in Ibadan where the main textile street was called Lebanon Street and in Lagos on Broad Street and its side streets.

They were into horse racing and could be found in the various race courses in Lagos, Ibadan, and Kano. Starting as traders in textile; the Lebanese/Syrian soon felt the pressure of Nigerians who started competing with them in these trades.

The Onitsha and Aba markets were bustling and unspoken resentment of the Nigerian competitors kept simmering under the surface. The Syrian/Lebanese are never monopolist: they encouraged Nigerians in business enterprises.

When they noted these pressures, the Syrian/Lebanese businessman moved to the other trades or business – mainly manufacturing. The Indigenisation Decree of 1972, amended in 1977, finally gave legal expression to the simmering discontent of the Nigerian merchant class: that decree forbade non-Nigerians (aimed at the Lebanese/Syrian/Greek entrepreneurs) from certain trades – including textile retail, bread making, etc.

Meanwhile, several Indian and Lebanese businessmen had sensed the coming legislation and had moved out of textile retail, to wholesale and to the manufacture of textiles. By 1975, there were over 20 textile mills in Nigeria; some of them, like 5 STAR for example, were competing with the largest textile mills in the world.

Nigerian Textiles flowed into every corner of Africa. The textile looms were adjusted to take Nigerian short cotton and cross breeds were introduced to make better cotton buds.

Heavy good quality towels, T – Shirts and cotton underwear, lace materials left Nigeria for various countries overseas including the USA. If that industry had continued, Nigeria would definitely be number one cotton producer in the world.

Similar opportunities were lost in the rubber trade where we ended up having no tyre factories after Dunlop and Michelin pulled out of Nigeria; or in car manufacturing, started in the 1970s Peugeot, Volks wagen, Styer, Mercedes Benz.

These pioneer industrialists, with their Nigerian counterparts built fabulous factories, made blankets, prayer mats, and a stupendous variety of textiles.

Nigeria was now in competition with Indonesia and India as a textile country. The textile business boomed; the more it boomed, the more people demanded they use Nigerian cotton.

This was difficult at the time because the looms could not take Nigerian cotton. The Government persisted and even introduced, “backward integration” of the textile business – i.e. the textile companies were to spin their own yarns. Spinning companies’ mushroomed, yet Government asked for more.

It was as if a golden goose had been discovered, the industry was milked to death by its vociferous textile unions, custom and excise officials, officials in the Ministries of Industries and Finance, who, on a daily basis, extorted huge sums of money from these industries.

Consequently, many of the owners diversified into other commerce – automobile, manufacture of electronics, carpets and canvass tarpaulin, towel manufacture – in nearly every case, huge sums of money was expended.

Nigerian officials never saw these manufacturing companies as Nigerian – they saw them as foreign – Lebanese, Indian, etc. This is a small man’s view of enterprises within his own area and country.

If the authorities had thought of these businesses, as Nigerian – nearly all of them were 60% owned by Nigerians – the Government would or should have protected and promoted them thus building a strong foundation for manufacturing. Instead they killed them. Today, only the Chinese textile manufacturing company exists in Nigeria – Nichemtex.

The rest of the textile industry is dead – killed mostly through Government officials over exploitation and the unbridled import of Chinese fabrics into Nigeria, often smuggled in from neighbouring countries.

The motifs of the fabrics are Nigerian or African; manufactured in China but labeled “made in Nigeria” CBN now says it has money to intervene in textile manufacturing in Nigeria.

This will, like all previous CBN interventions, be job for the boys; a few people will make money: the industry will not be revived but billions will be lost.

The Chaguoris grew up in Port Harcourt and after many business activities built the Port Harcourt Flour Mills of which DSP Alamieyeseigha was the General Manager. They went into the hotel business – cornering the management of Presidential Hotel in Port Harcourt, they bought Mr. Harmmar’s (of Occidental Oil fame) shares of the then Eko Hilton – a wonderful acquisition.

The Chagouris are in a polyglot of other business, including, e-commerce, electronic, software internet provider, construction, infrastructure, oil, petrochemicals, fertilizer plants, etc that is a long way for a Pitakwa (Port Harcourt) family who prepared themselves well for the roll and toil of Nigerian business.

The key to their success must remain that which, everywhere, spells success – hardwork, adaptability and being ready to take the numerous advantages Nigeria offers. • To be continued tomorrow • Dr. (Ambassador Cole (OFR) is a Consultant to The Guardian Editorial Board.

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1 Comment
  • Rasaq Durojaiye

    This is an interesting look at business development and policy making in Nigeria. Indeed, the problems metioned in the article, including multiple taxation, knee jerk policy changes, smuggling etc., affects all businesses in the country. Each time I looked into manufacturing in Nigeria, I’m reminded by friends to thread carefully. The opportunities are there but the headache can and thus push the faint of heart away, particularly, those of us that live abroard.
    Rasaq Durojaiye
    Chicago, IL