Nigeria's digital economy, now contributing over 19 per cent to national GDP, is growing rapidly due to increased smartphone use, social media activity, and pandemic-driven shifts in consumer behaviour. Experts are calling for a balanced regulatory framework to address emerging challenges in the online trading sector. Chris Oputa, Director-General of the Nigerian Association of Small Scale Industrialists (NASSI), said the shift to digital platforms has lowered operational costs for Micro, Small and Medium Enterprises (MSMEs), eliminating expenses like shop rent and transportation. He noted that habits formed during the COVID-19 lockdowns have persisted, with consumers valuing the convenience and cost savings of online transactions. However, Oputa warned that the unregulated nature of the sector has created gaps in data tracking, taxation, and consumer protection. Many traders now operate from homes or remote locations, reducing government revenue from traditional commercial levies. He highlighted the risks of fraud and anonymity, urging the introduction of a national verification system for online traders, with unique identification codes for registered vendors. Oputa also proposed an insurance-backed compensation scheme for victims of online fraud, funded by contributions from verified traders. He cautioned that unchecked cross-border e-commerce could threaten local industries through rising imports and potential job losses. Dr Nathaniel Oladunjoye, a Senior Lecturer at Obafemi Awolowo University, attributed the growth of online trading to Nigeria's youthful population, with over 60 per cent under 35. He explained that young people, especially those in remote work, prefer online platforms due to flexible schedules and 24/7 accessibility. Digital platforms now allow seamless browsing, payment, and delivery through dedicated retail applications. Some traders reported expanded customer reach and reduced business costs, though concerns remain about fraudulent buyers and fake payment alerts.
The push for online trader verification rings hollow when the same government has failed to formalise vast segments of the informal economy for decades. If unregulated digital trade is a threat to revenue, then the real issue is not just online fraud but the state's broader inability to track and integrate informal commerce. A registration system may benefit compliant traders, but without addressing systemic weaknesses in enforcement and trust, it risks becoming another bureaucratic layer. The youth driving this digital shift are not waiting for policy—they are shaping the economy faster than regulators can respond.
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