E-Commerce Challenges and Policy Considerations in Nigeria

Abstract

Electronic commerce (or e-commerce) is the popular term for doing business electronically. According to Haag, Cummings, and McCubbrey (1998), for businesses, electronic commerce includes performing transactions with customers over the Internet for purposes such as home shopping, home banking, and electronic cash use; performing transactions with other organizations through the use of electronic data interchange (EDI); gathering information relating to consumer market research and competitors; and distributing information to prospective customers through interactive advertising, sales, and marketing efforts. Benefits of e-commerce to companies include a wider potential market (i.e., global access); lowering of transaction costs; increase in the speed of transactions; improved economies of scale; minimization of human intervention in business processes; and unlimited access to product information for customers (Sesan, 2000; Wood, 2003). While a few developing countries such as Costa Rica are making inroads into electronic commerce (Travica, 2002), many others are slow in its adoption. For example, a study, which rated 42 developing countries on their “e-readiness,” found that Taiwan and Estonia had emerged as leaders among developing countries in the ability to conduct e-commerce, whereas Russia, much of the Middle East, and Africa were lagging behind (Anonymous, 2000). One of the countries included in the study but that rated poorly in its e-commerce efforts is Nigeria. In this articl, we shall be discussing the challenges being faced by the country as it grapples with the adoption of e-commerce.