Why Chinese retail traders face resistance in Dar es Salaam

And now Chinese merchants are steadily becoming ubiquitous, exploring both the wholesale and retail markets that are saturated with goods imported from China.

China is the world’s second biggest economy after the US and is currently the biggest foreign investor in Tanzania, according to Tanzania Investment Centre statistics.

By October 2022, China accounted for 1,098 investment projects worth $9.6 billion in Tanzania, which created 131,718 jobs. China is followed by the UK and the US, in that order.

Sino-African bilateral trade has been steadily growing in the past two decades. According to the International Monetary Fund (IMF), China is the single largest source of imports for African countries, supplying manufactured goods and machinery.

China has remained Africa’s largest trading partner for 15 consecutive years, with bilateral trade reaching a record $282.1 billion in 2023, according to the Chinese news agency Xinhua, which quoted the Chinese Ministry of Commerce in February.

In Dar es Salaam’s Kariakoo business district, Chinese trader have become popular among shoppers as they stimulate competition by supplying various goods through both wholesale and retail channels.

Ranging from building materials, decorations to clothing, shoes and various household goods such as curtains and carpets, Chinese traders have increased the supply of affordable goods in the market.

This has not only increased competition, but has also discouraged to some extent those who used to travel to China to purchase the same goods and sell them at higher prices in Tanzania.

The foreign merchants have also employed Tanzanians who work as shop attendants.

Although majority of them speak either their language or English, others try Swahili, with some preferring local names.

“Jambo, Mama Hassan?” one of the petty traders in Kariakoo was heard greeting a female Chinese trader, who waved back.

Despite living in harmony with the foreign traders, local traders have their concerns about the involvement of foreigners in domestic retail business.

“They shouldn’t be involved in retail businesses and compete directly with us,” said a Tanzanian trader, who identified himself as Juma Zuberi.

According to him, local traders are not against their foreign counterparts, but want them to conduct business in a manner that does not adversely affect locals.

“We expect them to partner with local retail outlets so that Chinese investors supply products in wholesale,” Mr Zuberi said.

At a shop run by a Chinese trader identified as Chen, electronic goods were slightly cheaper than in many outlets operated by Tanzanian traders.

A survey established, for instance, that a decoration light which was sold at Sh50,000 per piece elsewhere, was available for Sh30,000 at the shop run by Chen.

“I usually sell in wholesale, but can give you any number of loose pieces that you need,” he said after this reporter asked for two pieces of decoration lights.

“There are retail shops which that I supply, but many retail customers also buy from me,” he added.

Chinese shops comply to the local regulatory procedures, with business licences and registration certificates being displayed at the outlets.

Problem is not new

The National Investment Promotion Policy of 1996 seeks to enforce a maximum promotion of export orientation on domestic production of goods and services to enhance the development of a dynamic and competitive export sector.

The policy demands encouragement of inflows of external resources to complement national efforts.

Through the promotion of local and foreign investment, the government wishes to optimise foreign resource inflows through export-oriented activities to complement domestic resources, the policy states.

The existence of Chinese retail traders in places like Kariakoo is not new. In 2011, the then deputy Minister for Industry, Trade and Marketing, Mr Lazaro Nyalandu, issued a 30-day ultimatum for Chinese traders operating as petty traders to immediately leave, saying those who are in the country in the pretext of being investors are not supposed to operate like that.

However, nothing has significantly changed since then.

The chairman of the Kariakoo Traders Association, Mr Hamisi Livembe, said something must be done to correct the current situation around foreign traders.

“Traditionally, we are used to foreign investors who normally engage in big businesses such as wholesale or manufacturing, but what is happening in Kariakoo is making a mockery of this,” Mr Livembe told The Citizen in an interview.

“I’m receiving a lot of complaints almost every day from the local traders who want to know the boundaries of foreign traders in retail business.

“I really appreciate Chinese companies that have invested heavily in the manufacture of tiles and glass. They are producing products which we export and earn foreign currency. That is the kind of investment we need in Tanzania,” said Mr Livembe.

Asked why local traders were concerned about Chinese traders while other foreigners were also trading in Kariakoo, Mr Livembe said it is the rate which Chinese merchants are multiplying in Kariakoo that is worrying.

“Chinese investment should focus on manufacturing, not competing will locals for customers on the streets.”

“Locals fear losing business”

According to Mr Livember, Tanzania should enact a law which will differentiate retail businesses conducted by foreigners from those of the locals.

“The government should protect our small traders who are employed in retail trade,” he said, adding that officials should thoroughly control issuance work permits to foreigners.

The locals fear to lose in the competition for customers with the foreign traders whom they believe are in a position to sell cheaper products.

“Our colleagues have financial muscles and are well connected with the manufacturers back home. As a result, they can access products directly from manufacturers and sell at a slightly cheaper price which we cannot manage,” said a clothes trader who identified as Farida.

“This is our job which has taken time to build. We should not compete with the foreigners in such a retail segment,” she said, adding that the foreigners could focus on wholesale.

As the traders complain of their business, consumers are much concerned with the quality and prices of products rather than the owners.

“My focus is always to buy good things at a reasonable price. I don’t care who is selling the products,” said Ms Mary Mkinga who was found buying decoration lights at a shop run by a Chinese.

“I came here after walking around several outlets and found that this shop has slightly lower prices for the items I need,” she said.

The Chinese traders are not only in Tanzania but also in other African countries where they also face some resistances as towns transform into Chinatown.

In Kenya, the Chinese have been accused of selling inferior or fake mobile phones and other commodities. In recent years, it’s also reported that some Chinese were engaging in small-scale farming and fishing in Kisumu and Kisii areas.

In 2015, a Chinese man made headlines in Zambia when he was spotted roasting maize for sale at the University of Zambia. A Chinese woman was also seen selling vegetables in Lusaka market.

In Lesotho, the Chinese have been reported selling cakes, loose cigarettes and even beer at retail prices, while in Congo Kinshasa Chinese-owned shops were abundant in the city, selling everything from textile to electronics.