December 1, 2014

‘Nigeria needs legislation on e-commerce’

‘Nigeria needs legislation on e-commerce’


Nigeria needs a legislation that will protect e-commerce businesses and consumers in order to drive growth and boost opportunities in the sector, said Nduka Udeh, the President/CEO of Shoptomydoor.

He said the lack of legislation for the industry especially legislations relating to consumer protection has significantly affected the pace of growth of e-commerce in the country.

Nduka who stated this during an exclusive interview with the Vanguard noted that the scepticism about online business resulting from Nigeria’s reputation on e-fraud is affecting the sector and that it is further compounded by the lack of effective legislation that will address consumer concerns.

He said: “Government does not have a policy on e-commerce. Look at Consumer Protection Council, CPC for example. The legislation establishing the CPC, the last update on consumer protection, was in 1992. Till date, I don’t know of any updated consumer protection law that caters to e-commerce.”

This, he said, was necessary because, if a consumer buys items online, and it is not delivered, he should have a regulatory body that he can go to seek redress.

According to him, “If there is a law in place protecting the consumer, there will be an explosion in patronage in e-commerce. But because we don’t have that, a lot of people are scared. This is because the people are not sure that if they place any order that they will receive it or know what to do even if they receive it, but the item does not meet their standards.”

“These are some of the concerns that discourage people from embracing e-commerce. It is to counter some of these challenges that you see some of the companies like Jumia and Konga coming up with pay on delivery. Is it a good method? It is not. This is because it leads to high operating cost on the part of these businesses. It reduces their profit and it has lots of negative effects on them as a business, preventing them from expanding. But in Nigeria, it is there because the consumers do not trust the online platform,” he added.

He therefore called on the government to put up legislation on e-commerce as the stage is set for e-commerce boom in the country if the right policies to support it are put in place.

“Government needs to put up legislation on e-commerce. We have reached that stage. Nigeria’s e-commerce contribution to the GDP is less than one percent, even though it is believed that e-commerce is booming. If government puts up policies that encourages e-commerce, even if we stop at three percent which is the average globally, that amounts to about $10 billion to the GDP because of e-commerce. So government has a big role to play,” he said.