Multinationals and large firms are dominating electronic transactions in Nigeria even though the adoption rate of e-commerce by MSMEs is rapidly increasing according to a report, which was the result of the Mapping and Analysis of E-Commerce Ecosystem in Nigeria.
These large firms distribute their own inventory and for a fee, provide marketplace access to retailers, mostly MSMEs.
They create marketplace that links buyers and sellers without contact with items being sold or simply just provide logistic services for delivering goods and services.
Some of the multinationals and large firms identified as engaging in the majority of e-transactions in Nigeria include Jumia, Konga, Jiji, DHL and GIG.
Presenting the report, Dr. Olumuyiwa Alaba, in a virtual meeting to validate the report on Thursday, however identified major challenges to the growth and smooth running of e-commerce in Nigeria.
The meeting to validate the report was held to provide stakeholders the opportunity to review and make further inputs into the e-commerce report and discuss issues around regulatory framework of e-commerce in Nigeria.
One critical challenge Alaba identified is that there is no harmonized regulatory framework governing e-commerce. Payment system and security of payment was also mentioned as a hindrance to the growth of e-commerce in Nigeria.
Others include the lack of knowledge on the part of regulators, the high cost and insufficient internet connection, and poor road infrastructure.
Alaba also mentioned high cost of power, trust deficit and limited alternative transport infrastructure.
Apart from addressing all of these challenges, the report said there needed to be collaboration among public agencies regulating e-commerce and digitally operated businesses.
Agencies identified include the trade ministry, communications ministry, NITDA, NCC, CBN, FCCPC, FIRS, EFCC, NFIU, SSS and Police.
Abubakar Aliyu, who represented the Ministry of Industry, Trade and Investment at the meeting said the ministry has inaugurated a committee for policy and strategy on e-commerce.
The mapping and analysis was initiated to support Nigeria’s commitment to proposed negotiations under the World Trade Organization.
It was commissioned under the Federal Ministry of Industry, Trade and Investment/ German Agency for International Cooperation (GIZ)/European Union Nigeria Competitive Project, implemented by SEDIN programme of the GIZ and co-financed by the EU.
Katrine Thomson, the head of section on economic cooperation of the EU delegation, during the virtual meeting to validate the report said some these initiatives, which cut across West Africa would improve regional trade, exports and the business climate in Nigeria.