Poor Infrastructure, High Internet Cost May Limit Growth of $17bn E-Commerce Market

Poor infrastructure, high internet cost, amongst others, have been identified as the major factors that could impede the growth of the Nigerian e-commerce sector.

This is just as economic experts advocated the need for an extensive national policy framework to deepen consumers protection in the e-commerce sector.

The sector which has overtime gained the attention of businesses has recorded significant growth as the convergence of technological solutions for electronic payments, convenience of e- commerce channels, coupled with the Covid-19 pandemic fuels its emergence as an opportunity to reach a vast array of customers.

Findings by THE WHISTLER showed that factors such as poor road infrastructure and cost of internet accessibility constitutes major setback to the sector.

Nicole Uchenna, an online fabric retailer, in a chat with this newspaper said that the convenience of e-commerce channels truly make the online businesses desirable in most urban areas.

Uchenna explained that timely and affordable deliveries have been hindered by poor road infrastructure, adding that limited alternative means of product delivery has adversely impacted on the cost of doing business.

She said, “Poor road infrastructure constitutes the most significant challenge to deliveries across Nigeria.

“Another issue that we are battling with are problems associated with data and internet, and this has a direct impact on charge to consumers.”

Also speaking with THE WHISTLER, Kasim Sodangi, National Coordinator, Nigerian Content Development in Information Communications Technology, noted that there is an urgent need for the policy frameworks that enable operators to provide the right services.

He said the framework would help to ensure that personal data of users and customers are protected.

He noted that the acceleration in e-commerce lately has been driven by effects of the pandemic.

“As the world goes contactless everyone has to devise ways to avoid contact and stay healthy,” he added.

Speaking further, he stressed that there has not been an active National Policy governing the affairs of the sector, adding that plans and conversations are on to develop one.

“Agencies such as NITDA, Consumer and Competition Commission , NIPOST ( for logistics) and so on have mandates by law that require them to ensure the public is adequately protected, but not much has been done.

“The Consumer Protection and Competition Council is doing a good job in protecting Nigerians, however there is always room to improve standards,” he added.

The sector’s annual growth rate is currently estimated at 25.8 per cent for continent and 25 per cent for Nigeria, with a current market opportunity estimated to be over N255bn annually.

The e-commerce market size in Nigeria was estimated to be about $17bn in 2019.

Emezue Deborah, an aggrieved customer who expressed her dissatisfaction said that she no longer patronise online shops because she has bought fake products from previous purchase.

She explained that the market lacks control and cannot be trusted as complains are barely resolved.

“I was disappointed at my first purchase, I was given fake product, it got spoilt immediately I received it and nothing was done about it.”

“I have bought other items that got me regretting, so I have decided not to purchase any item online”.

Alaba Olumuyiwa, Trade Policy Consultant said that the digital economy which is driving e-commerce has impacted Nigeria and the rest of the world in many different ways as it drives the creation of new products, services and business models.

He said, “With the current expansion in the market, it is important that national international trade rules are structured to keep pace with the emerging developments.

“We have to find the system that balances economic growth for both individuals and businesses, while ensuring adequate safeguards for the quickly evolving policy areas such as privacy policy, consumer protection, cyber security, customs procedure and system of taxation.”

According to him, while the last two decades recorded such exponential growth in domestic and cross-border e-commerce, there has not been any specific coordinated national and multilateral rules regulating the system.

Rather, it has so far relied on patchwork of rules agreed by some countries in their bilateral and regional trade arrangements.