Is foreign competition a blessing to Malawians?

There has been a growing concern by the indigenous business community over increasing presence of foreign businesses, in particular the Chinese nationals operating in rural areas and sectors which many local traders believe should have been restricted to Malawians only.

Recently, some vendors in Mzuzu, Mponela, Karonga and other parts of the country have petitioned their respective District Commissioners to intervene by asking the Chinese traders to withdraw from the rural areas and relocate to the urban area since they have grabbed most of infant businesses which are still experiencing growth such as restaurants, retail shops, hardware and textile shops. In reaction to this outcry, the Chinese envoy has appealed to all the Chinese traders to pull out from the controversial rural areas.

As a matter of fact, many people have got a perception or misconception that Chinese merchandise are fake and of poor quality. Whether this is true or not, the fact is that our market is being flooded with foreign traders who are playing a significant role in instilling competition. It has been observed that the Chinese traders are offering the lowest prices for their merchandise, a fact which is believed to be suffocating the small and medium-sized enterprises.

As economic ties between China and Africa deepen, hundreds of thousands of Chinese migrants, like this store owner in Lilongwe, Malawi, are discovering the continent. Photo: Benedicte Kurzen for The New York Times

Our local traders both in urban and rural areas have been on the market since the dawn of independence and the former head of state, Ngwazi Dr. Hastings Kamuzu Banda ordered all Asian traders to ply their trade in the urban areas, and leave the rural areas to the natives. The idea behind this policy was to empower the local traders and protect them from harsh competition. The end result of this policy, however, has seen most rural markets under performing as the local traders have miserably failed to develop infrastructure which is an economic driver, while their Asian counterpart have managed to construct permanent and reliable structures in the urban areas. This, therefore, has led to the migration of many villagers flocking to urban areas in search of employment.

When the government tries to protect local businesses indefinitely it behaves like parents who are so obsessed with overprotection of their children, who get used to a babysitting lifestyle and can’t make a decision or stand up on their own when they grow up. Such children continue clinging to their parents for financial support even after getting married, just like peanut butter sticking on top of the roof of the dog’s mouth. Instead of relieving the parents of their responsibility as their energy diminishes with old age, such children drain resources from their old parents.

Our local business community has been behaving like a forty year old ‘child’ who is still being breastfed. For a period of solid 47 years most Malawian businesses can’t stand up on their own, and this has been portrayed by lobbying the authorities to rescue them from foreign competition. They don’t subscribe to fundamental business practices such as customer service, creativity, innovative thinking, working an extra mile, quality movement and competitive strategies.

Several theories in domestic and international trade advocate for competition as a recipe for success on the market. Successful businesses, no matter how small, don’t shun away from competition whether foreign or local but rather take it as an opportunity to remain focused and improve on service delivery which eventually meets customer satisfaction. The absence of a healthy competition often leads to the downfall of the once mighty giants, as they don’t experience any pressure to innovate their practices. The end result is that product and service quality is compromised, consumers pay exorbitant prices and their right of choice is violated.

Most Malawian business enterprises have failed to innovate, deliver quality service and satisfaction to customers and this has, therefore, made many Malawians to shun away buying from local traders andprefer to either buy foreign products or local products from foreign traders because they offer good customer service.

For instance, if you walk into some of the Malawian shops you won’t be attended toimmediately as the shop assistant will be busy chatting on the phone or plaiting her hair while you wait so impatiently. On the other hand, if you visit a foreign-owned shop the shop assistant will treat you as if you were a next state president. Small things like this always put off customers and make them to give preference to foreign over Malawian traders.

Competition should, therefore, be embraced by all enterprises at all levels as it is crucial for business survival. It is high time that local businesses woke up and checked out on service quality levels, customer satisfaction, and value creation instead of just wasting time lobbying authorities and complaining against foreign traders invading the home market.

On its part,    government should provide conducive environment for our local traders, scrutinise the quality standards of both foreign and local products and check out that foreign traders don’t bring in briefcase businesses.

 

*The author is a health services administrator based in Kasungu. He likes to comment on social and economic issues and is writing in his own capacity.

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