Spotlight on Trends, Policies of E-Commerce and SMEs in Nigeria

In an era of rapid technological transformation, e-commerce has emerged as a powerful force in shaping the global economy, and Nigeria is no exception.

e-commerce

With the rise of digital platforms and increasing internet penetration, small and medium-sized enterprises (SMEs) in Nigeria are leveraging e-commerce to enhance their competitiveness and expand their market reach.

However, challenges such as poor infrastructure, inconsistent government policies, and financial constraints persist.

Arising from a conference at LCCI, Ikeja, we examined the evolving trends and policies shaping e-commerce and SMEs, enriched by expert insights from Dr. Adenike Shittu.

Nigeria’s e-commerce sector has witnessed remarkable growth, driven by increased smartphone penetration and an expanding digital payment ecosystem.

According to a 2024 report by the Nigerian Communications Commission (NCC), internet penetration in the country has exceeded 55%, and the digital economy contributes over 17% to the nation’s GDP.

Major e-commerce platforms like Jumia, Konga, and PayPorte continue to shape the industry, providing SMEs with a digital marketplace to reach consumers.

The COVID-19 pandemic accelerated the adoption of online transactions, pushing businesses to adopt digital-first strategies.

The Central Bank of Nigeria (CBN) and fintech companies such as Flutterwave and Paystack have played a significant role in improving digital payment solutions, further driving e-commerce growth.

The introduction of the eNaira, Nigeria’s central bank digital currency (CBDC), is another notable development aimed at enhancing digital transactions.

The Nigerian government, recognizing the role of SMEs in economic development, has implemented various policies to promote e-commerce and entrepreneurship.

Key agencies include Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), which provides funding, training, and policy advocacy for SMEs; National Information Technology Development Agency (NITDA), which supports digital transformation through policies that encourage innovation and cybersecurity; Bank of Industry (BOI), which offers financial assistance to SMEs through various credit schemes; and the Central Bank of Nigeria (CBN), which oversees financial policies, including interventions such as the Naira redesign policy and digital currency initiatives.

Dr. Shittu Adenike Kudirat, a distinguished scholar and fellow of the Chartered Institute of Commerce of Nigeria, has been at the forefront of discussions on e-commerce and SME development.

In her presentation at the Chartered Institute of Commerce of Nigeria (CICN) held at the Lagos Chamber of Commerce (LCCI), Ikeja, in November 2024, she emphasized that e-commerce serves as a lifeline for SMEs in Nigeria’s challenging economic climate. She highlighted that digital platforms offer an opportunity for businesses to navigate economic uncertainties and sustain profitability.

Earlier in June 2024, at the same venue, Dr. Shittu presented a paper titled “Empowering SMEs through E-Commerce: Leveraging Digital Platforms to Enhance the Capacity and Competitiveness of Small and Medium-Sized Enterprises.”

In this session, she discussed how digitalization enables small businesses to access global markets, reduce operational costs, and enhance customer engagement.

She stressed the need for financial inclusion policies that support SMEs in transitioning to e-commerce.

Dr. Shittu’s insights have sparked discussions on how emerging economies can harness digital transformation to drive economic resilience. She has consistently advocated for strategic alliances between fintech firms, regulatory agencies, and SMEs to foster an enabling environment for e-commerce.

In her 2023 presentation, “POST NEW NAIRA DESIGN: Strategic Alliance for Existing and New Businesses in Nigeria,” she analyzed the impact of the Naira redesign policy on businesses and recommended innovative financial solutions to mitigate economic disruptions.

Her research contributions, such as “The Naira Exchange Rate and the Performance of Export-Oriented Small-Scale Enterprises in Nigeria (2006–2022)” published in the British Journal of Interdisciplinary Research, have provided empirical data on the challenges faced by SMEs and potential policy interventions.

To ensure that SMEs fully benefit from e-commerce, stakeholders must address key challenges, including unreliable internet infrastructure, high transaction costs, and inadequate access to finance.

Policy recommendations include strengthening cybersecurity measures to protect online transactions, expanding digital literacy programs to equip entrepreneurs with e-commerce skills, encouraging fintech innovation to provide affordable and accessible payment solutions, and enhancing public-private partnerships to improve logistics and delivery services.

E-commerce presents a transformative opportunity for SMEs in Nigeria, enabling them to thrive despite economic uncertainties. With strategic government policies, increased digital adoption, and financial support, the sector can drive sustainable economic growth.

Dr. Shittu Adenike Kudirat’s contributions have been instrumental in shaping discussions on the role of e-commerce in Nigeria’s economic future, offering valuable insights for policymakers, business leaders, and researchers.

This article is part of ongoing coverage of Nigeria’s economic transformation through digital innovation.