In light of the Naira’s severe devaluation over the past six months, public conversation has embraced the possibility that ‘made-in-Nigeria’ goods can fix the country’s weakening currency. Since oil prices fell in 2014, a weakened Naira has forced the country to seek different methods to save the currency from total collapse. The Central Bank of Nigeria has put several stringent policy measures in place, which include foreign currency restrictions as well as zero access to Forex by Bureau de Change operators. The bank also placed restrictions on access to Forex for the purchase and importation of a list of 40 items.
These monetary policies have hit import-based businesses the most. In fact, most of these businesses are on the verge of collapse, while the owners hope that the Naira strengthens in the forex market soon enough. The government has warned those importing goods that they will not be able to get money from banks as it continues to encourage Nigerians to look inward, which should have a positive effect on both the manufacturing and agricultural sector. Recently, NOI Polls conducted a poll to determine how often Nigerians patronise locally made products. The report showed that 97 percent of Nigerians who took the poll would buy goods produced in the country, such as food and clothing, if it would save the economy.
Although Nigerians are ready for goods produced in the country, it will take more than demand for Nigeria to begin manufacturing these goods in quantities large enough for either domestic consumption or foreign exportation. The producers of these goods also need to get access to buyers outside the country so that they are able to sell their products efficiently, as opposed to going through a middle man, which has been the case over the years.
Why e-commerce may be the way forward
In light of this, the country’s growing e-commerce sites serve as a possible route to connect producers with buyers outside the country.
According to a recent study conducted by Ipsos, a global market research company, cross-border shopping is a growing trend with around 80 percent of shoppers going international when purchasing goods online.
“In Nigeria, an impressive 47 percent of the online spend is already taken internationally, while in South Africa, shopping across the continent continues to rise in popularity. The two countries are playing no small role in boosting e-commerce on the continent, offering a much-needed shift that can potentially have a positive impact on both economies,” noted Ipsos.
According to the Worldpay Global Payments Report 2015, the current global e-commerce market is worth around $1.66 trillion with an expected value of $2.4 trillion by 2019. An estimated 23 percent of this spend has taken place exclusively on mobile devices.
The growth of e-commerce in Africa may be likened to that of China, which many would argue grew, primarily, due to the activities of Alibaba. Alibaba became a $180 billion company by bringing millions of users, merchants and business together to sell products made in China. These goods were advertised and sold on the platform by connecting millions of users and vendors from across the world.
Over the past few years, Nigeria’s e-commerce sector has seen tremendous growth. The sector has witnessed the entrance of several major players in the market, starting in 2012 when the likes of Jumia, DealDey and Konga commenced operations in the country.
However, the story of Nigeria’s e-commerce business is about to change with the introduction of a new platform known as Cokodeal founded by Mike Dola, which may also see products assembled in Nigeria being advertised and sold to users outside Nigeria just like Alibaba. Cokodeal aims to act as a bridge between indigenous businesses and interested buyers within and outside the country, making it easy for individuals and enterprises to source for goods and locate businesses within the nation. Also, it is a secure platform as activities on the site are monitored to prevent any transactional risks using the messaging tools, amongst others, created on the platform.
“Cokodeal helps foreigners to understand the availability of a product, in what quantity and where it is located in Nigeria,” said Mike Dola.
Since its launch in 2014, Cokodeal has worked with several SMEs, manufacturers and exporters of goods produced in Nigeria. Some of them include Amawonda Spices, which makes locally made jollof rice spices, fried rice spices and Crown Foods that produces, packaged yam flour, garri, egbo and more.
The presence of e-commerce platforms that promote locally made goods could become a source of relief for Nigerians who worry about where to sell their products. It is a safe means through which producers of these goods are granted direct access to customers as opposed to selling it at wholesale prices and making less profit. If more companies offer services similar to what cokodeal.com provides, and are able to successfully replicate the ‘Alibaba approach,’ many more Nigerians will be encouraged to produce goods specifically for export, while boosting the country’s currency.