Promoting trade and e-Commerce in Nigeria

Trade is the voluntary exchange of goods and services and is an essential component for the healthy existence of all social systems. It allows an individual to obtain something desirable in a fair manner from another individual who also obtains something in return.
Over the years this model of exchange has evolved from direct exchange of goods, known as the barter system, to the use of legal tender, otherwise known as money for exchange. The means through which goods and services are provided and obtained evolved as exchange medium evolved. The current evolution of methods in which goods and services are provided can be attributed to contributions and capabilities provided by information technology. Electronic commerce is the term used to describe the “new” improved ways in which goods and services are exchanged using information technology. E-commerce has made trade relatively easy for businesses and this paper investigates its benefits and examines ways in which e-commerce can be promoted in a developing country like Nigeria.

Trade is a very essential part of the health of any economy. It is an activity that spans beyond national borders; the trading of goods and services across borders is referred to as international trade. International trade allows buyers and sellers of goods and services in various nations to take advantage of lower production costs and higher specialization. (Importance of International Trade, 2010)
E-commerce allows goods to be bought and sold with ease and most developed countries are making the most of electronic commerce. It has the potential to link the entire world in terms of trade and will reduce restriction associated with territory and location. E-commerce could help businesses reduce the cost of doing business through reducing the need to keep large amount of goods in the store. The advantages are numerous but outside the scope of this paper.
However, several factors are responsible for the snail pace growth of information technology in developing countries like Nigeria. One of the most notable factors is the high cost of bandwidth and access to the internet. Another case is the lack of technical knowledge to deal with issues related to the adoption, deployment and maintenance of computer systems used for electronic commerce. Furthermore, security and consumer trust is also an issue that begs attention in order for electronic commerce to gain wider acceptance. “Among many potential users, a serious lack of confidence in electronic commerce impedes usage” (Guilherme Alberto, 2007).
Moreover, the high cost of starting electronic commerce serves as an obstacle. Purchasing all the needed equipment normally requires some substantial investment. Also, companies that do not have personnel with adequate technical knowledge may need to hire external professionals which in most cases add to the cost.

How to Promote Trade in Nigeria

The one most important factor responsible for the snail place growth of electronic trading in Nigeria is the high cost associated with access, maintenance and hiring of employees. This cost discourages businesses from deploying electronic commerce systems. The high cost of access can be associated with lack of IT infrastructure, while the high cost of personnel to manage and maintain e-commerce systems can be attributed to the lack of local technical skill.
Lack of IT infrastructure can be tackled through a partnership between the government and the private sector. The government on one hand should provide an enabling environment, with policies that encourage IT service providers to run their businesses Nigeria. Hosting of applications or provision of internet services by IT providers is expensive due in part to the problem of electricity in the country. These companies claim that they run their businesses on generators and the cost propagates to the consumer. This suggests that the provision of steady electricity will help lower the cost of access to IT services while increasing the quality.

Security and Trust

Trust is a very important factor for any business transaction; more so for electronic commerce. Buyers as well as sellers need to build trust or confidence if electronic commerce is to survive in a developing country like Nigeria. “, only if buyers and sellers trust that orders and payments are conducted with minimal risk of deceit and abuse of any information provided, will they accept the Internet for electronic commerce purposes” (Guilherme Alberto, 2007). Buyers need to be assured that their private information remains so and will not be unlawfully used by the seller or sold to any third party without consent.
To promote trust and confidence, the governments need to adopt laws and policies aimed and consumer protection over the internet, as well as laws that protect the seller. Laws range from those that protect privacy to those that help to enforce contracts between buyer and seller, including intellectual property rights. Governments also have to establish and enforce standards to oversee the manner and time in which goods and services are delivered to the consumer after payment has been received.


Even if all the desired IT facilities exist, they are only as good as how many managers and customers are aware of their existence. So, awareness campaign aimed at sensitizing managers and the general public on the possibilities should be embarked upon. Managers can attend seminars that teach how to increase the “bottom line” with information technology. While businesses can advertise how easy, secure and convenient it is to purchase goods and services from them over the internet.

General Technical Knowledge

Potential customers need to be sensitized about issues related to privacy and security of their information. And most importantly, the general public needs to have the technical skill required to access the internet. So a computer literacy scheme needs to be in place to allow interested members of the public acquire computer knowledge.


In order to define the best strategy for promoting electronic commerce in Nigeria, we need to examine the landscape and all factors that affect it. Factors like computer literacy, cost of internet access, general technical knowledge etc. all need to be put into consideration.  However, wide deployment of electronic commerce will help drive Nigeria forward, economically and socially.



Business link. (2010). Securing your e-commerce systems. Retrieved December 4, 2010, from Business Link:
Guilherme Alberto, A. d. (2007). Promoting e-Commerce in Developing Countries. Internet
            Governance and Policy Discussion Papers .

Hawk, S. (2002). B2C e-commerce in developing countries: a comparison of India,Latin America and Russia. 5th International Business and Economics Conference. St. Norbert College. De Pere: Norbert College.
Money Instructor. (n.d.). Importance of International Trade. Retrieved December 11, 2010, from


Richard Byrdk said…
Ecommerce market is increasing day by day because people are getting more advanced and love to buy things online.

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Unknown said…
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Anonymous said…
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