Lagos: Experts have called for a balanced regulatory framework for Nigeria’s fast-growing online trading sector, as it continues to transform commerce, consumer behaviour, and economic structures.
According to News Agency of Nigeria, the discussion emerges in the context of Nigeria’s burgeoning digital marketplace, bolstered by increased smartphone use and social media activity.
NAN reports that the digital economy in Nigeria has significantly expanded, contributing over 19 percent to the national Gross Domestic Product (GDP). This growth has been largely driven by shifts in consumer behaviour during the pandemic, which led to a greater reliance on digital platforms, reshaping shopping habits and accelerating the growth of e-commerce across the country.
Speaking with NAN, Chris Oputa, Director-General of the Nigerian Association of Small Scale Industrialists (NASSI), described the rise of online commerce as a necessity and an evolving global trend. Oputa noted that the expansion was propelled by the widespread use of mobile phones and social media, alongside changing consumer preferences that intensified during the COVID-19 pandemic. He highlighted the cost and convenience benefits of online trading, especially for Micro, Small and Medium Enterprises (MSMEs), as it reduces expenses related to transportation and shop rent, thus lowering the barrier to entry and supporting entrepreneurship.
However, Oputa warned about significant gaps in regulation, data tracking, and consumer protection due to the sector’s rapid growth. He emphasized the difficulty in assessing the true economic impact of online transactions due to the lack of reliable data. The shift to informal online spaces has also diminished the government’s ability to generate revenue through traditional commercial levies, as many traders now operate from remote locations.
To address these issues, Oputa proposed implementing a national verification system for online traders to enhance accountability and consumer trust. He suggested that verified vendors be assigned identification codes and that a mechanism be put in place to compensate victims of online fraud, funded by contributions from registered traders. Oputa also cautioned against unregulated cross-border e-commerce, which could undermine local industries.
Dr Nathaniel Oladunjoye, a Senior Lecturer at Obafemi Awolowo University, also spoke on the matter, attributing the growth of online trading to Nigeria’s youthful population. He explained that many young Nigerians engaged in remote work prefer online platforms due to their flexibility and convenience. Oladunjoye agreed on the need for government oversight to ensure proper registration of digital platforms, which could also create additional revenue streams through taxation.
Oladunjoye stressed the importance of expanding internet infrastructure to rural areas to ensure inclusive participation in the digital economy. He noted that most internet infrastructure is currently concentrated in urban centers.
Some traders shared their experiences with NAN, highlighting the reduced costs and expanded customer base offered by online platforms. However, concerns over fraudulent buyers and trust issues persist, with traders like Mr Sadiq Musa citing challenges such as fake payment alerts.
Online shoppers also expressed mixed experiences, citing both the convenience and risks of digital commerce. While some appreciate the time and cost savings, others, like Mr Gilbert Ezigbo, have encountered issues with product quality and traceability.
Stakeholders concurred that while online trading presents significant opportunities, policies are needed to protect consumers, ensure accountability, and minimize risks. They stressed the importance of balancing innovation promotion with safeguarding Nigeria’s economy and digital marketplace.