A Comparative Analysis of Diaspora and Local Businesses in the Grooming Industry in the Lagos Metropolis: Policy implications for wealth creation

Abstract

The recent global economic crisis has caused a downturn in Foreign Direct Investment (FDI) flows from Multi-National Corporations (MNCs) to developing countries. This has resulted in limited opportunities for job creation and capital accumulation in those countries. Development practitioners have however suggested developing countries advance strategies to attract diaspora investment as a solution to this problem. There is however limited information for policy formulation due to the dearth of studies on diaspora investment in the Nigerian context. This study attempts to bridge this gap by documenting characteristics of diaspora investment in businesses and investors in the grooming industry in Nigeria and providing information on the potentials of diaspora businesses if any by a comparative analysis of diaspora and local businesses on performance indicators such as job creation, capital and profits. The study shows that most of the diaspora that have invested in the study area are from Europe and the US. Majority of the diaspora wholly owned the businesses established. It also shows significant differences between diaspora and local businesses in capital investments, profits, turnover and labour employed, revealing that diaspora businesses excelled over local ones in these indices. While local businesses excelled in number of product innovations, diaspora related firms implemented more process, organisational and marketing innovations, ostensibly to adjust to the Nigeria business climate. In addition, the motive behind the establishment for most Diasporas was love for homeland while locals were more or less motivated by profits. There were however no significant differences in the educational qualifications of owners of the businesses, sector of the grooming business invested in and age of businesses of both groups. The study concludes that there are significant potentials for wealth creation by encouraging the establishment of firms by diaspora and recommends appropriate policy mechanisms.

Suggested citation

E. Apotemole , Olawale Adejuwon , Joshua Akarakiri (2024). A Comparative Analysis of Diaspora and Local Businesses in the Grooming Industry in the Lagos Metropolis: Policy implications for wealth creation Koozakar Proceedings, 1(1). https://doi.org/10.69798/15368572

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