Financial experts are urging the Federal Government of Nigeria to take heed to the potential worth of e-commerce in the country, estimated at $10 billion. As a means of driving the sustenance of the country’s economic diversification policies, the government has been advised to leverage the revenue generated from the sector.
Although e-commerce is at the rudimentary stage in Nigeria, it has had an overwhelming impact on business transactions in the country. Information and Communications Technology (ICT) fostering online businesses contributes about 8.4% of Nigeria’s GDP and recorded a 16.4% growth in 2014, according to the Nigerian Bureau of Statistics. Currently, the industry boasts of about 300, 000 online orders daily.
The fast growing e-commerce industry with an estimated 25% annual growth could stimulate the growth of a non-oil economy adding to diversification in the medium to long term, analysts have said. This will come to play because Small and Medium Enterprises (SMEs) are using the ICT driven industry to promote “made in Africa” products and marketable ideas.
While counting the gains of e-commerce to the Nigerian economy, it is important that its weaknesses are measured also as the challenges of e-commerce are yet to be combated. The problem of distrust remains an issue raised by the Nigerian Inter-Bank Settlement System (NIBSS) reporting the high level of fraudulent transactions, which amount to 8.8% of online transactions. Online fraud could eventually be a colossal impediment to the sector’s contribution to the economy.
Since e-commerce is driven by accessibility to the internet, there is a need for its consideration, because the industry appears to be experiencing a shortfall. According to Nigerian Communications Commission (NCC), over 93.4 million people access the internet and do so through their mobile devices as of July 2015. This accounts for 55% of Nigeria’s population, which is quite a size-able number. However, for e-commerce to be a saving grace for the economy, which may not be anytime soon, it must have achieved a progress report of 30% broadband penetration by 2018 as the NCC noted.
This is quite far from rescuing the currently crumbling economy of Nigeria that the Central Bank Governor postulated to be sliding into recession in 2016. More affirmatively, the chairperson of the Trade Union Congress (TUC) posited that the Nigerian economy was already in recession judging from the various indicators like persistent slump in oil price, steady decline of generated revenue and job losses.
It is apparent the e-commerce may not be doing much now, but the potential of its expansion in the foreseeable future is very high. Perhaps, the Federal Government of Nigeria can take this as a clarion call to look beyond the oil sector and tap the resources inherent in other sectors for economic growth and development.