With more and more Nigerians gaining access to mobile phones and the internet, e-commerce activities in the country have been on the rise over the last couple of years. Nigeria is reportedly one of the leading countries in Africa in e-commerce, with an estimated market projection of US $8.52bn in 2022.
However, despite the exponential growth of the e-commerce sector in the country, the federal government of Nigeria recently disclosed its plan to establish a strategy to boost the growth of the sector, as the country is still yet to harness the inherent opportunity in the e-commerce value chain.
The government disclosed that there was no better time than now to diversify the nation’s economy away from the oil sector, by building a dynamic, profitable, and efficient non-oil sector to place the economy on a sustainable growth path. It is reported that Nigeria is currently actively participating in the ongoing negotiation at the World Trade Organization to boost e-commerce.
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According to the minister of industry, Trade, and Investment, Otunba Niyi Adebayo who was represented by the director, commodities and export department of the ministry, Suleman Audu, while at a stakeholders dialogue on e-commerce and digital trade policy for Nigeria, he disclosed that despite the giant strides recorded in the e-commerce industry, Nigeria is still yet to fully harness the inherent opportunities in the e-commerce value chain due to inadequate investment and information, coupled with several other challenges.
See what he said;
”Nigeria has yet to fully harness the inherent opportunities in the e-commerce value chain, largely due to inadequate investment, coupled with inadequate information on the opportunities in the sector and the inability of the government to provide the required enabling environment.
”As such, the government has identified e-commerce as a major priority program that will play a critical role in the promotion of commodity trade, especially with the realities of the unprecedented COVID-19 global pandemic.
”The Federal Government is also committed to developing an e-commerce strategy in line with the Federal Government’s post-COVID-19 recovery plan, to encourage investment in the e-commerce value chain. The current e-commerce spending in Nigeria is estimated at $13bn per annum and is projected to rise to about $75bn in revenues per annum by 2025.
”The market outlook for Nigeria’s e-commerce shows that the number of online shoppers in the country, which was at 76.7 million in 2021, is expected to hit 122.5 million by 2025. The figures from the Nigeria Inter-Bank Settlement System also show that Nigeria’s e-payment transactions increased by 85.5 percent year-on-year to N171.99trn in August 2021.”
The e-commerce companies in Nigeria have no doubt proven to be critical enablers of economic growth and social development for the country, despite the myriad of challenges these companies are faced with, due to a tough operating environment.
These companies have continued to promote the growth of SMEs in the country, by offering sellers their online platforms in order for them to reach a wider target audience.
Even though these e-commerce companies continue to defy certain odds in the country, however, there is a strong need for the government to fix up a whole lot of things that have somehow limited the growth of the sector.
A clear example is the case of Nigeria’s poor infrastructure which calls for serious attention. Aside from the fact that the FG still has a lot to do in order to fully develop its digital infrastructures to support a vibrant digital economy, one major constraint of the e-commerce sector is the poor road network.
Not all parts of the country are accessible by road. Getting goods to remote areas of the country can be a very daunting task. As a result, people living in such areas may be required to pay more or wait for long periods to get their goods delivered. Hence, they may find it difficult to patronize e-Commerce stores.
It is however gratifying that the federal government has convened, to unveil strategies for e-commerce growth in the country. Hopefully, all these constraints limiting the sector in one way or the other, will be totally eradicated, thereby boosting the sector for an explosive exponential growth.