The Economic of E-commerce as a Virtual World Market in the 21st Century in Nigeria

7/30/2019 The Economic of E-commerce as a Virtual World Market in the 21st Century in Nigeria

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THE ECONOMIC OF

E-COMMERCE AS A VIRTUAL

WORLD MARKET IN THE 21ST CENTURY IN NIGERIA

BY:

EKELE IDACHABA GIDEON

EC/2005/226

A Bsc. PROJECT SUBMITTED TO THE DEPARTMENT

OF ECONOMICS, FACULTY OF SOCIAL SCIENCE

MADONNA UNIVERSITY, OKIJA

ANAMBRA STATE, NIGERIA

AUGUST 2009


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CETIFICATION

The economic of e-commerce as a virtual world market in the 21st

century in

Nigeria.

By:

Ekele Idachaba Gideon

EC/2005/226

This is to certify that this project was carried out in the Department of Economics,

Faculty of Social Science, Madonna University Okija, Anambra state, Nigeria.

Mr Odoemena Ahemefuna

Supervisor Signature/Date

Dr. S.O. Nwanchukwu

H.O.D Signature/Date


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APPROVAL

The economic of e-commerce as a virtual world market in the 21st

century in

Nigeria.

By:

Ekele Idachaba Gideon

EC/2005/226

This project has been approved and accepted in partial fulfilment of the

requirements for the award of Bachelor of Science (Bsc.) degree in economics,

Madonna University, Okija, Anambra state, Nigeria.

Mr Odoemena Ahemefuna

Supervisor Signature/Date

Dr. S.O. Nwanchukwu

H.O.D Signature/Date

External Examiner .

Signature/Date


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DEDICATION

This work is dedicated to my beloved parents, Mr. and Mrs. Paul Ekele


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ACKNOWLEDGEMENT

I thank the Almighty God for seeing me through, during the period if studies. I am

also indebted in gratitude to my project supervisor, Mr Odoemena Ahemefuma for

his contribution and guidance throughout the project period. I also thank my

parents, Mr. and Mrs. Paul Ekele, for their unending love and support throughout

the years. I also offer my sincere gratitude to Mr. John Ekele, Abel, Jennifer and

Oscar for their assistance throughout the project phase. I also like to acknowledge

the former H.O.D, the person of Chief Ezenwa Okafor for his encouragement and

support.

My course mates, roommates and colleagues are also remembered for all the fun

memories we shared during the entire programme. Finally, I thank my dear friends,

Efosa, Paul, Joshua, Oswald, Lucas, Chika, Paul II and Marshal for their

continuous encouragement and care. God bless you all.


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ABSTRACT

This research work critically examined the economics of the e-commerce as a

virtual world market in the 21st

century in Nigeria as new road map for quick and

easy business transactions, the economics of e-commerce will boost the level of

economic growth and development in Nigeria as a lever needs to turn the economic

fulcrum of our country (Nigeria) from its current under-developed commercially to

the state of the developed countries. This research also answers some of the

questions such as if there is an economic benefit in e-commerce in Nigeria as

regards to the primary objectives of the research and to find out whether indeed e-

commerce of e-commerce has an impact on the level of economic in the Nigerian

economy. In the quest for optimism, we are optimistic about the vent for surplus

theory formulated by Adam Smith which modified and applied to the third world

nations by Hia Myint which states that the opening of the world market the

remote agrarian societies creates opportunities not only to reallocate fully

employed. The first working hypothesis is to quid the major activities of the study

that the economics of e-commerce has been able to promote business in Nigeria

with huge benefit. As such e-commerce in Nigeria both wholesale and retail sub-

sectors have recorded a significant growth which research question a proved

positively with the hypothesis which the result of the finding indicates that there is

an economic benefit in e-commerce in Nigeria


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CHAPTER ONE

1.1 BACKGROUND OF STUDY

The meaning of e-commerce has been charged over the last 30 years. Originally,

electronic commerce meant the facilitation of commercial transactions

electronically, Using technology such as electronic data interchange (EDI) and

electronic funds transfer (EFT). These were both introduced in the Late 1975,

allowing businesses to send commercial documents like purchase order or invoices

electronically. This standard had its inception in the 1948 to 1949 Berlin blockade

and airlift. The United States Army quickly discovered that the manner of

transacting business accompanied by paper orders could not meet with the

necessary flow of goods into Berlin. In order to break the paper bottlenecks,

Edward A. Gulbert, a logistic officer in the army, set up a system of ordering via

telex, radio-teletype, and telephones various industries elaborated upon this system

in the ensuring decades before the first general standard was published in 1975.

The growth and acceptance of the credit cards, automated teller machines (ATM)

and the telephone banking in the 1980`s were onwards, the electronic commerce

would additionally include enterprise resources planning system (ERP), data

mining and data warehousing.


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Perhaps it is introduced from telephone exchange office, or maybe not. The earliest

example of many-to-many electronic commerce in physical goods was the Boston

Computer Exchange, a market place of used computers launched in 1982. The first

online information market place including online consulting was likely the

American Information Exchange, another pre-internet system introduced in 1991.

Although the internet became worldwide in 1994, with the introduction of first

graphical browser software of accessing the World Wide Web and ensuring

scramble for companies and individuals to get online, most e-commerce shifted

to the internet. It took about five years to introduce security protocols and digital

subscriber lines allowing continual connection to the internet. And by the end of

2000, a lot of European, American and the sub-Sahara business companies offered

their goods and services through the World Wide Web.

This form of commerce have broken like geographical distance in forming

business intermediaries are being replaced by their electronic equivalent or are

being made entirely dispensable (for instance, as airlines have published fare

information and enable ticketing directly over the internet, stock front travel

agencies have declined). Prices of commodities are generally low on the web a

reflection not merely of the lowest costs of doing electronic business but also of

the ease of comparison shopping in cyberspace. A new form of corporate co-

operation known as a virtual company, which is actually a network of firms, each


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performing some of the processes needed to manufacture a product or deliver a

service has flourished. Since them people began to associate a word e-commerce

with the ability of purchasing various goods and services through the internet using

secure protocol and electronic payment services.

E-commerce is maintaining business relationship, and selling informations,

services, and commodities by means of the computer telecommunication networks.

Although in the vernacular, e-commerce usually means or refers only to the trading

of goods and services over the internet, broader e-commerce activities is included

e-commerce consists of business-to-business and business-to-business commerce

as well as internal organizational transactions that support these activities. In

consumer-to-business transactions, customers/consumers are given more influence

over what and how products are made and how services are made and how services

are delivered, thereby broadening customer choices. E-commerce allows for faster

and more open process, with customers having greater control. E-commerce makes

information in products and the market as a whole is readily available and

accessible and increases price transparency, when enables customers to make more

appropriate purchasing decisions.

A lot of issues have record an ugly head in the drive to the acceptance of e-

commerce in Nigeria has a bad name in the worlds electronic market (e-

commerce) since the late 1990s popularity referred to as yahoo-yahoo, issues


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like this has made the stigma more visible which in turn affects the acceptance

level, even with the promises of banks on security level of their websites and e-

transactions people are still stiff-necked on how much trust they can place on this

Banks. E-commerce is promising and can totally, reduce the work burden of

transactions (normal conventional transactions) but this is ugly hydra headed

monster called fraud has placed Nigeria as a no go area of transaction between us

and the outer world, this has reduced the growth rate of foreign investment

drastically since this investors have found other countries to embrace and foster a

fraud free electronic transaction (commerce). Letter in this study I will show the

problems and what is needed to be put in place to facilitate the growth of e-

commerce in Nigeria in the 21st

century.

1.2 STATEMENT OF THE PROBLEMS

Even in the recent Government development plan tagged the 7 point agenda

which is just mere academics without economic plan attached to it, no proper

consideration or look was given to the technology sector. Nigeria as a nation has

not embraced technology to the fullest; the average use of computer in Nigeria is a

computer to every 500 persons compared to that of a developed country (America)

as at 1993, a computer to every 16.8 persons and as at 2005 a computer to every

1.3 persons. The Government can be said to be the major barrier to the realization

of an electronic community ranging from the Government not taking it as a


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pressing issue in the development scheme, no proper orientation have been given

to support the patronage of the use of electronic commerce in Nigeria, no policies

to encourage business owners or industries to try and venture in the electronic

commerce such as Tax reduction or incentive for product or services sold online,

no law or legal frame work to support activities and transactions online. The

security level of e-commerce in Nigeria is poor; Nigeria has a high corruption rate

which does not help in the spread of any online activities. If they can be fraud in

one-on-one transactions of goods and services what would be talked about an

internet based transaction. Thus, the need of a study of e-commerce as virtual

world market for the 21st

century in Nigeria is to suggest policies that would help

in the Government of an electronic society.

1.3 OBJECTIVES OF THE STUDY

The main objective of this study is to proffered solutions to the Menace and ill

state of e-commerce in Nigeria, but other objectives can be seen as below;

I) To identify the problems associated with the development of e-commerce inNigeria

II) To identify economic and business factors that will facilitate the growth ofe-commerce in Nigeria


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III) To ascertain if there can be economic benefits to the establishment of e-commerce in Nigeria

IV) To make policy recommendations on how e-commerce would be a virtualworld market for the 21

stcentury in Nigeria

1.4 RESEARCH QUESTIONS

I) What is the state of e-commerce in Nigeria compared to that of thedeveloped economies?

II) Is e-commerce a liable project in a developing economy like Nigeria?III) Are there economic activities that really need the services of electronic

commerce in Nigeria?

IV) If e-commerce is established in Nigeria can security, privacy,confidentiality among other necessary factors be assured like in the

developed economy?

1.5 STAEMENT OF HYPOTHESIS

H0: There is no economic benefit in e-commerce in Nigeria

H1: There is an economic benefit in e-commerce in Nigeria


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1.6 SIGNIFICANCE OF THE STUDY

The significance of this study is widely known that with improved services in the

electronic commerce and return in the discovery and proposals of this work, the

underlined may stand to benefit. This work will be of relevance to our banking

sector because it will help them enhance a customer relationship, ease in

transactions, and bank congestion since most of the bank activities will be carried

out via internet. This will in turn restore confidence in the banking industries on

the part of the customers as fear carrying out bulky transactions would be

eliminated. It will help the government enhance a relationship between the advance

economies of the world since trust would be restored and transaction can now be

carried out via the internet. Also trade in the country would not be left on touch as

services and goods produced here can now be widely consumed home and abroad.

This study will envision ways to which the economy at large can benefit from the

acceptance and development of e-commerce in Nigeria in this 21st

century.

1.7 DELIMINATION/SCOPE OF THE STUDY

The study would embrace a period of 1994-2008. Since e-commerce originally

came into blue it is also very important to link this to when Nigeria first embraced

e-commerce in 1998. It will also encompass the problems facing Nigeria in its


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acceptance of e-commerce, security issues, trust, fraud etc. Not living out that this

period also witnessed the inception of yahoo-yahoo (fraud) in Nigeria, since its

the major problem facing the embracement of electronic commerce in Nigeria.

1.8 ASSUMPTION OF THE STUDY

This research work is carried out based on a few assumption listed below.

I) The figures derived from the secondary data represent the totalpopulation, of the Nigeria sector embracing electronic commerce.

II) The banking sector, sales, and industrial sectors are the only people inneed of e-commerce.


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CHAPTER TWO

REVIEW OF LITERATURE

2.1 INTRODUCTION:

Electronic commerce (e-commerce) has being widely defined to be the buying and

selling of goods and services over the internet (Chaffey; E-BUSINESS). It has also

been defined as the sharing of business information, the maintaining of business

relationship and the condition of transactions by means of telecommunication

networks (Zwass; ijec). The United Kingdom cabinet office defined it as the

exchange of information across electronic networks at any stage in the supply

chain, whether within an organization, between the public and private sector,

whether paid or unpaid (United Kingdom cabinet office 1999).

The scope of electronic commerce is wide and includes all electronically mediated

transactions between an organization and the third party. It is not restricted solely

to the actual buyer and seller of products, but includes pre-sale and post-sale

activities (Kalakota and Whinston; Electronic Commerce). In more liberal terms,

once a contract of sales is affected between a seller and a buyer using such

electronic means as the electronic mail, regardless of distance or any geographical

barrier, it is within the province of electronic commerce (Kosour; Understanding

electronic commerce).


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The objectives of electronic commerce are legion. They include the facilitation of

international cooperation through trade, making goods and services available to

customers all over the world irrespective of distance, the expansion of customer

base for manufacturers or producers of goods and services, and a reduction in the

cost of service of delivery by delivering these electronically (Chaffey E-

BUSINESS). The objectives of e-commerce underscores its importance in the

emerging global community with the effects that todays customers are able to

have access to goods and services in the remotest parts of the world without having

to see the sellers. The traditional buying and selling process is being gradually

replaced by internet trading, especially in more advanced countries (Bali;

Information Technology and the Law).

The major significance of e-commerce thus lies in the fact that it encourages a

single world trade system which is facilitated by access through electronic means

of goods and services from different parts of the world. This has lead to the

emergence of uniform regulation rules on the internet governance to ensure the

homogeneity of the conditions under which transactions are made to suppliers and

consumers of goods and services through the internet (Steinfield and Klein; 1999).

As electronic commerce grows, an important socio-economic side effect will be

increased competition with the traditional business in any given local community.


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Our research suggest that local merchants typically go online in order to better

access distant market, but are often unprepared to cater for remote consumer and

hence do not fare well. Despite the rhetoric that electronic commerce is free from

the constraint of geography, we argue that there are good reasons to consider the

role of physical location in making e-commerce splurge.

In the great excitement generated by the internets potential to globalize

commerce, researchers have virtually ignored how electronic commerce will

impact local businesses and their communities. A primary emphasis is most

discussions of electronic commerce is the global nature of electronic market and

the low cost of reaching customers throughout the world (e.g. Amazon.com, a firm

that did not even exist a couple of years ago, now sells book in more than 150

countries). Through electronic commerce, companies are now within reach of

anyone with internet access, enabling than the complete with traditional businesses

in any given community without having to make the investment in brick and

mortal and without an expensive private global telecommunications network. The

webs theoretically lower transactions cost that formerly served as a barrier to entry

in local markets, enabling customers to become aware of any transact with

electronic retailer located anywhere.


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The rhetoric suggesting that electronic commerce fosters global markets is

convincing, and exerts a powerful influence on the businesses in any going online

(Steinfield and Klein; 1999). Indeed an article in the Economist proclaimed , that

the internet is affecting all businesses in similar ways. Every industry, for

example, has suddenly become part of the global network where all companies are

equally easy to reach. As a result of this changes many businesses that survived

mainly because they were conveniently planed, or because they produced

information that were hard to find, will soon have to find some other raison d etre

(The Economist, 1997, 14th

August ).

As electronic commerce grows, an important socio- economic side effect will be

increased competition with the traditional business in any given community

(Steinfield, Mahler and Baure; 1999). A recent report by Jupiter Communication,

an internet research firm, estimated 94% of online purchases made in 1999 would

otherwise have been made in traditional retail channels. Of course, local businesses

may also gain from the efficiencies afforded by electronic commerce, both in better

serving their local constituencies and by reaching out to distant markets some

anecdotal evidence suggests that in some instances this is occurring, especially as

traditional retailer learn to better integrate their web and physical outlet (New York

Times; 1999, August 16th; Steinfield and Klein; 1999). However, at least one study

suggests that local merchants are, in general ill prepared to take full advantage of


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electronic commerce and thus unlikely to see any gains from it (Steinfield and

Klein; 1999). Other anecdotal evidence points to the plight of local merchants who

intend to go online with limited resources, with examples of local stores who sell

little to nothing through their online venture (New York Times; 1999, July 26th

).

These initial indications suggest the need for new research on local impact of e-

commerce.

2.2 DEFINATION OF ELECTRONIC COMMERCE:

Electronic commerce or e-commerce refers to a wide range of online business

activities for product and services. It also pertains to any form of business

transaction in which the parties interact electronically rather than physical

contact; this is according to Britannicas definition

Electronic commerce is usually associated with buying and selling over the

internet, or conducting any transaction involving the transfer of ownership or rights

to use goods or services through a computer- mediated network. Though popular,

this definition is not comprehensive enough to capture recent developments in this

new and revolutionary business phenomenon. A more complete definition is; e-

commerce is the use of electronic communication and digital information

processing technology in business transaction to create, transform and redefine


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relationships for value creation between or among organizations, and between

organizations and individuals (P. Trimmers; Electronic commerce, 2003).

Simply put, e-commerce is the online transaction of business, featuring linked

computer system of the vendor, host and buyer. Electronic transaction involves the

transfer of ownership or right to use a good or service. Most people are only

familiar with business to consumer [b2c] electronic business. Common illustrations

include llbean.com, compusa.com and Travelocity.com (Export.gov; US

Government Export Portal).

According to MonsterCommerce e-commerce tutorial; e-commerce is a term for

any type of business, or commercial transaction that involves the transfer of

information across the internet. It covers a range of different type of businesses,

from customer based retail sites to business exchanges trading goods and services

between cooperation. It is currently one of the most important aspects of the

internet to emerge.

Electronic commerce allows consumers to electronically exchange goods and

services with no barriers of time and distance, e-commerce has expanded rapidly

over the past 5 years and its predicted to continue to the rate, or even accelerate in

the near future the boundaries between continental and electronic commerce


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will become increasingly blurred as more and more businesses move sections of

their operations onto the internet (Whinston, A.B.; Economics of e-commerce).

E-commerce is online commerce verses real world commerce. E-commerce

includes retail shopping, banking, stocks and bonds trading, auctions, real estate

transactions, air ticket booking, movie rentals- nearly anything you can imagine in

the real world. Even personal services such as hair and nail saloons can benefit

from e-commerce by providing a website for the sales of related health and beauty

products, normally available to local customers exclusively.

While e-commerce one requires an expensive interface and personal security

certificate, this is no longer the case. Virtual storefronts are offered by a variety of

hosting services and large internet presences such as eBay and Yahoo!, which offer

turnkey solutions to vendors with little or no online experiences. Tools for running

successful e-commerce websites are built into the hosting servers, eliminating the

need for the individual merchant to redesign it. These tools include benefits like

shopping charts, inventory sales logs and the ability to accept a variety of payment

options including secure credit card transactions (New York Times; 1999).


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2.3 TYPES OF E-COMMERCE:

A variety of businesses are conducted online, but retail transactions make up the

largest part of e-commerce which measures up to 80% of the total world force of e-

commerce (Davidow and Malone; 1998). Consumers can find computers,

automobiles, clothing, books, music, air ticket, food and just anything man can

imagine for sale on the internet.

Listed here are various types of e-commerce;

I. Business to business [b2b]II. Business to consumer [b2c]

III. Business to government [b2g]IV. Consumer to consumer [c2c] andV. Mobile commerce [m-commerce]

I. BUSINESS TO BUSINESS:

Business to business [b2b] e-commerce is simple defined as e-commerce between

corporate organization/companies that deal with relationship between and among

businesses. This type of e-commerce has two primary component; e-frastructure

and e-market. Business to business e-commerce usually deals with hundreds or


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even thousands of other businesses, either with customers or suppliers. Caring out

these transactions electronically provides vast competitive advantages over

traditional methods. When implemented properly e-commerce is often faster,

cheaper and more convenient than traditional methods.

II. BUSINESS TO CUSTOMERS:

Business to customer e-commerce, or commerce between companies and

consumers, involves gathering information, purchasing physical goods [i.e.

tangibles such as books or consumer products] or information goods (or goods of

electronic material or digitalized contents, such as software, e-books, music and

games) all this are receiving products over an electronic medium/ network.

The most common applications of this type of e-commerce are in the areas of

purchasing products and information as personal finance management, which

pertains to the management of personal investment and finances with the use of

online banking tools.

B2C e-commerce reduces transaction costs (particularly search cost) by increasing

consumer access to information and allowing consumers to find the most

competitive price to s product or service. B2C e-commerce also reduces market

entry barrier since the cost of putting up and maintaining a website is much

cheaper than installing a brick-and-mortal structure for a firm. In the case of

information goods, B2C e-commerce is even more attractive, because it saves


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firms from factoring on the additional cost of a physical distribution network.

Moreover, for countries with a growing and robust Internet population, delivering

information goods becomes increasingly feasible.

III.BUSINESS TO GOVERNMENT:

Business-to-Government e-commerce or (B2G) is generally defined as commerce

between the private and public sector via the electronic media. It refers to the use

of the internet for public procurement, licensing procedures, and other government

related operations. This kind of e-commerce has two features:

a) The public sector assumes a pilot/leading role in establishing e-commerceand

b) It is assumed that the public sector has the greatest need for making itsprocurement system more effective. A web-based purchasing policy

increases the transparency of the procurement process (and reduces the risk

of irregularities). To date, however, the size of the B2G e-commerce market

as a component of total e-commerce is insignificant, as government e-

procurement system remains undeveloped. (Davidow and Malone, 1998).

IV. CONSUMER TO CONSUMER:

This consumer to consumer e-commerce (C2C) is simply commerce between

private individuals or consumers.


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This type of e-commerce is characterized by the growth of electronic marketplaces

and online actions, particularly in vertical industries where firms/ businesses can

bid for what they want from among multiple suppliers. It perhaps has the greatest

potential for developing new markets.

V. MOBILE- COMMERCE:Mobile-commerce has been accepted and well practiced in our part of the globe,

because it is rated the easiest amongst the different types of e-commerce (the

economist, 2005).

M-commerce is the buying and selling of goods and services through wireless

technologies i.e. handheld devices such as cellular telephones and personal digital

assistants (PDAs). Japan is seen as a global leader in m-commerce.

As content delivery over wireless devices becomes faster, more secure and scalable,

some believe that m-commerce will surpass wireless e-commerce as the method of

choice for digital commerce transactions. This may well be true for the Africa

continent where there are more mobile phone users than computer users.


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2.4 E-COMMERCE OVER LOCAL BUSINESS

ADVANTAGES OF E-COMMERCE:

Transaction-cost economics, emphasizing the cost savings afforded by network

based communication, is generally used to explain the rise of global electronic

markets (Benjamin and Wigand, 1995; Malone, Yates and Benjamin, 1987; Miller,

Clemons and Row 1993; Wildman and Guerim-Calvert, 1990). Networks reduce

the constraints imposed by distance by permitting the rapid exchange of

information between distant buyers and sellers while avoiding costly search efforts

(Malone et al, 1987; Wildman and Guerim-Calvert, 1990). Not only does

electronic commerce support the provision of goods and services at a low cost, but

it can potentially enable greater customization to the need of individual buyers

(Choi et al, 1996; Kalakota and Whinston, 1996). As the argument typically goes,

distance becomes irrelevant for goods and services that can be produced anywhere

and either delivered electronically or physically by courier to buyers (Malone et al;

1987) spelled out the network efforts particularly in the areas of buyers search,

where electronic brokerage capacities of networks enable buyers to search for and

locate product that match desired features and prices. The relatively low cost of

creating a web presence, which is then accessible to those connected to the internet

world wide, enables firms to use their electronic sites as a surrogate to establishing


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a physical presence in a local market. Distant web based businesses have several

advantages over their local physical businesses (Steinfield et al; 1999).

Such advantages include:

a) Access to a wide potential market.b) Low sunk cost because a builder or rented space in each market is not

required. And they may operate with less or no inventory.

c) Better economies of scale arising from a larger customer base, andconsequently volume discount on inputs (Wigand and Benjamin, 1995;

Wigand, 1997)

d) Ability to setup facilities near important factors of production, which wouldnot be available to an offline physical business in a given community.

e) Lower costs due to the ability to bypass many of the intermediaries in theretail distribution value chain.

f) A higher degree of transaction automation, leading to improved services andlower labor cost.

g) Ability to rapidly respond to changes in the markets, through price routineinteractions with customers (Steinfield et al; 1993).

h) Ability to offer 7 days by 24 hours access with little additional cost.


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i) No limitation on the depth of information provided to customers, which canaid in product selection and potentially reduce return rates (New York Times,

August 23, 1999).

These economics can potentially enable web based retailers to easily undercut the

price of local retailers who formerly faced little or no competition. Despite some

empirical evidence to the contrary (Bailey and Brynjolfsson 1997; Palmer 1997),

there is a general expectation that price will be lower on the web.

Using transaction cost theory, we can conclude that electronic commerce implies

new competition to local retailers, particularly those offering products that are

rapid by obtainable from other sources, and that are easily transported. Of course

local merchants might respond by establishing their own web presence, making up

any business lost to web-based competitive by expanding into new geographic

markets themselves. However, they are good reasons to be skeptical about the

likely success of this strategy for many smaller local retailers (Steinfield et al;

1999). Web startup firms face significant barriers in their attempt to attract

customers. The sheer number of new web businesses reduces the likelihood that

people will chance upon a web store, necessitating large marketing and advertising

expenditures to get noticed. Smaller local retailers also may not have the business

system in place to adequately serve distant customers, even if they do attract them.


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The ability to process electronic order, verify payments, ship to distant customers,

properly apply sales tax regimes, handle returns and many other skills need to be

acquired. Moreover, despite the increasing sales activity on the web, lack of trust

remains a strong inhibitor. Unknown virtual web stores are more likely to

experience problems due to lack of trust than establishing brand names, favoring

the larger nationally known company. In fact, at least one survey of web users has

shown that lack of a local physical presence inhabits purchases. Other survey

suggests that problems with unreliable products and difficulties returning goods

have dissuaded internet shoppers from being repeat buyers. Recently, one internet

market research firm reported that nearly two third of all online customers still do

not trust web sites with private information, despite the use of prominently featured

privacy policies (Jupiter communications; 1999). Probably most importantly,

smaller local firms are unlikely to have resources or skills to create the kind of

sophisticated, highly interactive websites that now populate the web (New York

Times, July 26th

, 1999).

2.5 ELECTRONIC COMMERCE IN NIGERIA

Until 1998, Nigeria had only a few dial up providers and a few internet service

providers (ISPs) operating on low links in the country. The Economist intelligence

unit estimate that the number of internet users per 100 persons grew from 1.25 in


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2004 to 1.82 in 2005 and 2.5 in 2008. They are progress in this sector, as illustrated

by cyber-cafes springing up even in some of the remote part of the country. Lagos

alone has more than 1000 cyber-cafes. Business application value of online

communication is growing rapidly, but with low household disposable income and

a restricted infrastructure. It will still be a while before internet penetration in

homes reaches a significant level.

On March 3rd,

2004, the Federal Government launched joint initiative between

private-sector operators, which operates under National e-Government strategies

limited (NeGst) and the National Information Technology Development Agency

(NITDA), an agency of the Federal Ministry of science and technology. The

project aims to improve organizational performance, service delivery and the

participation of ordinary citizen in the day-to-day activities of Government with

information and communication technologies.

The growth of e-commerce in Nigeria has been slow and steady. The vast

improvement in telecommunications service in the country as illustrated by the

explosion of subscribers and users of GSM (global system of mobile

communication), is further underscored by a surge in private telecom operators

(PTOs) offering fixed wireless services, which offers data and voice transfer.

Hence this supports internet use even in some of the most rural parts of the


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country. This phenomenon not only lets Nigerians communicate with the rest of

the world and the country from areas that had been completely cut off, but they are

also getting use to the phenomenon of modern communications, including GSM,

short message services (SMS) and e-mail. Furthermore, with the reduction in

tariffs already implemented in Nigerian telecommunication (NITEL, the National

telecoms carriers) and further cuts expected telecoms services is becoming more

affordable and essential to many Nigerians.

According to the Economist Intelligence Unit, the stock of personal computers

(PC) per 1000 persons grew from 10.66 in 2004 to 11.09 in 2005. The biggest

impediment to growth of e-commerce is low PC penetration. But cheap Asian

technologies and falling micro-chip prices have fueled a market in clones as well

as branded PCs.

The introduction of e-commerce services is hampered by a lack of public

awareness on how to use the technology. GSM phone technology (introduced in

August 2000) in Nigeria, however, is generally draining customers, and there have

been a rapid growth in electronic-cash-transfer services such as Western Union,

Money Gram and Travelex in recent years.

Electronic banking is one area of e-commerce that has proven successful in Nigeria

virtually all banks in Nigeria offer online, real-time banking services. Moreover


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banks that cannot offer these services are increasingly losing their customers.

Online real-time banking services have now become common place as customers

are offered the flexibility of operating of an account in any branch of their banks

network. The online services lets customers conduct variety of banking activities in

any location of their particular bank. These services include among others,

deposits, withdrawals, transfers and issuing of drafts.

Banks are also increasingly looking to card-based payment solutions beyond the

widely accepted electronic purse, including debit cards and credit cards, but these

are slow to take off. The most likely services to roll out on a large scale in Nigeria

are the ATM system (Automated teller machine). A few banks started the ATM

consortium in 2003 to setup ATMs across the country via Interswitch, and it is

gearing up to raise finance.

Nigeria as a black nation, a 3rd

World country has not achieved so much out if this

whelm bank called e-commerce. Out if the five types of e-commerce listed and

discussed, Nigeria has so far ventured into only the two cheapest types of e-

commerce, Business-to-Customers and the m-commerce. We also have tried

partially the Business-to-Government, in sectors like the Nigeria Immigration,

Nigeria Police and Navy which recently conducted their recruitment via the

internet.


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Looking to the history of e-commerce, country had a vital role to play in the

development of e-commerce. In the US, the Government started the Business-to-

Government e-commerce due to the uncontrollable inflow of imported goods

through their ports, statistics had it that it took a minimum of 15 working days to

clear goods from the ports (export.gov; US Government Export Portal). In South

Africa same story to tell about the inception of e-commerce, the government went

a further step in providing software and website materials for big wholesale shops

and industries so they can provide online services for their retailers (snpa.org South

Africa National Port Authority).

2.6 M-COMMERCE IN THE NIGERIA BANKING SECTOR

In late 2003, First Atlantic Bank now Fin Bank introduced flash me cash, a

system of e-commerce transfer of funds through the use of mobile phones from one

account to the another, now instead of customers going to the bank to effect

transfer from an account to another account, the customer simply carries out the

transaction via the use of a mobile phone and the second party will also be alerted

via a text message.

In recent years, banks have made their transactions/services increasingly

convenient through the mobile banking a sub function of e-commerce. Here


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customers check account balance, make transfer, drafts and withdrawals via the

mobile banking.

Also the Automated Teller Machine (ATMs) enables bank customers to withdraw

money, cash cheque, make deposits via ATM spots (UBA bulletin; February 19th

2008). These transactions can be carried out 24 hours a day and 7 days a week

wherever ATMs are located, including foreign countries. Banks also use electronic

transfers to deposit payroll cheques directly into a customers account and

automatically pays a customers bill when due. Many banks also use the internet to

enable customers to pay bills, move money between accounts and perform other

banking functions.

In April 2005, Intercontinental Bank took the lead with the introduction of

electronic banking which included different packages, like online banking

(electronic transfer, electronic wiring of funds, account notification and ATMs).

According to Mr. Anni Chinedu Managing Director Intercontinental Bank Plc, he

said; since the inception of e-banking, bank congestion has reduced drastically by

40% and issues of been understaffed has not since been heard. He also said it was

not easy convincing customers that there was no need for withdrawal booklets and

cheque books but as soon as there was a form of acceptance a speeding growth was

achieved.


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Other banks like United Bank of Africa, Guarantee Trust Bank, Zenith Bank and

Standard Trust Bank followed the trend late 2005nand had the same result in

March 2007, a policy was introduced in the Banking sector to control congestion in

the banking halls, it was that all transactions especially withdrawals lower than N

100000 should be carried out outside the banking hall, this was also to increase the

initial averagely 51.7% congestion in the banking halls to 23%.

Below is a table showing the performance of selected Banks before and after the

introduction of e-commerce in the banking sector.


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2.6.1 PERFORMANCE OF E-COMMERCE IN THE BANKING SECTOR

BEFORE FIRST

BANK

FCMB UBA ZENITH

BANK

GT

BANK

OCEANIC

BANK

Customers

satisfaction

20% 37% 23% 40% 55% 52%

Bank

congestion

87% 40% 78% 30% 33% 42%

AFTER

Customers

satisfaction

60% 73% 67% 80% 82% 77%

Bank

congestion

40% 20% $30% 12% 9% 27%

Source: (The Economist; performance of e-commerce in Nigeria, 2006,

December 2nd

)

Relatively there have been positive changes in the Banking sector since the

inception of m-commerce in the Nigeria banking sector.


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2.7 E-COMMERCE IN THE AVIATION SECTOR

Similar changes faced with the Banking sector is what faced the aviation sector;

Airport terminal congestionand poor customer satisfaction, those were the major

problems the aviation sector faced. Problems of flight booking, flight cancellation,

ticket reoccurrences, and difficulty in re-booking a flight schedule were

experienced and labeled unavailable until the introduction of e-commerce in the

aviation sector. Now airline like Changchangi, Aero Contractor, Virgin Nigeria,

Arik and Albaka airlines now have web services where flight booking, flight

cancellation, rebooking/ rescheduling of flight can be done without stress and the

side of both the customers and the service providers. Now more than one hundred

customers can now book and cancel flight schedule as well as reschedule all at the

same time.

According to Time magazine article (August, 2008) Nigerias 21 st Century Air

Service, more than 40% of flight bookings are now done online with payment

made via- electronic cash cards supported by Interswitch. This service is made

possible due to the inception of debit and credit cards by the 21st

century banks to

ease the banking sector. Research carried out on selected Airlines shows that

before the end of 2010, 80% of air service activities would be done electronically


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and the primary constrains faced by this sector which is customer satisfaction and

Air terminal congestion will be maximized and minimized respectively.

Below is a table showing the performance of selected Airlines before and after the

inception of e-commerce in the Nigeria aviation sector.

2.7.1 BEFORE

AIR SERVICE PERFORMANCE

CHANCHANGI 32%

AERO CONTRACTOR 37%

VIRGIN NIGERIA 23%

ARIK 33.50%

ALBAKA 30%


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2.7.2 AFTER

AIR SERVICE PERFORMANCE

CHANCHANGI 52%

AERO CONTRACTOR 70%

VIRGIN NIGERIA 77%

ARIK 65%

ALBAKA 64%

Source: (The Time Magazine article Nigerias 21stCentury Air service; August,

2008).

2.8 E-COMMERCE IN THE BUSINESS SECTOR

Up till now a good number of business activities are still done the traditional way,

not because the electronic means are not available but because the cost of

acquisition is still on the high side and changes attributed to them are much, and

after been paid gains are not made. This is because population of the market still

prefers the traditional way of transaction.


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Research carried out shows on eateries and shopping supper market shows that out

of every one hundred customers that comes into shop in a day only two of them are

ready to pay through any electronic means (The Economist, Performance of e-

commerce in Nigeria, 2006, December 2nd

) due to this, profits are not made

because charges are charged on every transaction made electronically, and general

service charge still have to be made whether sales are made or not.

This is not a good business activity for them, they say. They insist the awareness of

this electronic payment system is not enough and that more need to be done, so the

activity can be a profitable business activity were taxes, services charge and

charges made per electronic transaction would be taken and the business owners

would not be at a loss.

2.9 PROBLEM ASSOCIATED WITH THE DEVELOPMENT OF E-

COMMERCE IN NIGERIA

Since the inception of e-commerce in Nigeria, both the services and retail sectors

have notice a slow but significant growth, if not for some sited problems are listed

and analyzed below

a)Securityb)Profitabilityc)Privacy


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d)Inadequate information and improper orientationSECURITY

Established encryption methods such as secure sockets layer (SSL), a protocol

developed by Netscape Communication Corporation, encode credit cards numbers

and other information to foil would be thieves. Shoppers can determine if the site

they are using is secure by noting the secure icon at the bottom of their browser

window. Also, the address if internet will carry the https prefix instead of the

standard http prefix when the site is secured. Nevertheless some customers are

reluctant to divulge personal information over the internet, and their reluctances

have hindered the growth of e-commerce.

PRIVACY

In addition to credit card security, many shoppers also worry about privacy. Ro put

them at ease, many internet store post privacy statement that explain their policy

of sharing or not sharing customers information with other organization. This

privacy policy may include refusing to give the customers name and e-mail

address to companies that send unsolicited and unwanted commercial e-mails often

known as junk mail or spam and mobile messages. Even at this, customers are still

reluctant to give out their card information online which is not promoting the

growth of electronic commerce.


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PROFITABILITY

A large percentage of e-commerce business went bankrupt in 2000 and 2001,

mostly due to inadequate business plans and excessive spending on advertising and

marketing to attract customers to their websites. The dot-com of the late 1900s had

largely turned into a dot-com bust as the 21st

century began. An estimated of 30 e-

commerce businesses either ceased operation or declared bankruptcy from 2002 to

2004, resulting in the layoffs of nearly 30000 employees. A number of e-

commerce sites began to report profits in 2005. Notable among them is

virginnigeria.com, which pioneered many of the tools and procedures now

commonplace in online retail sites in Nigeria.

INADEQUATE INFORMATION AND IMPROPER ORIENTATION

Customers are not properly oriented about the usefulness, convenience and

advantages of e-commerce, so the growth of this sector of the economy is very

slow compared to the estimated result. If only more awareness and the right

orientation with respect to the advantage accruable to the patronage of this sector,

then customers can be comfortable and participate fully in the development and

growth of e-commerce in Nigeria.

Other notable problems associated with e-commerce growth in Nigeria are;


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i. Foreign Investment: present legislation stipulates that businesses wishing toprovide internet services must be 70% locally owned

ii. Intellectual Property: there are no specific legislation concerning intellectualproperties and e-commerce, although Nigeria is a signatory to six

international treaties relating to intellectual property.

iii. Consumer protection: there is no specific legislation concerning consumerprotection and e-commerce in Nigeria. There is no specific legislation

relating to contract law and dispute resolution in Nigeria.

iv. Basic for Taxation: the present tax law in Nigeria does not specificallyaccount for e-commerce transaction.

v. Classification of e-commerce Transaction: present tax laws do notspecifically classify e-commerce transaction in Nigeria.

vi. Compliance and enforcement issues: since e-commerce is in its infancy inNigeria, legislation have not specified or finalized legislation concerning

compliance and enforcement. The Nigeria Communication Commission is

an Independent regulatory body that promotes growth in information and

communication technologies (Bali, O; Information technology and the law,

2002).


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CHAPTER 3

RESEARCH METHODOLOGY

3.0 INTRODUCTION:

Arthurs (2002) is of view that research methodology is the specification of

procedures for collecting and analyzing data to define and solve problems. It forms

the framework of the entire research and involves the determination of the most

suitable method of investigation in nature of research instrument in the sample plan

and the type of data to be collected.

3.1 RESEARCH DESIGN:

The method adopted for this study is survey method. The rationale for choosing

this method is that it focuses on people, the vital facts of people, and our beliefs,

opinion, attitudes, motivation and their behaviour.

Paj (2002:32) states that survey is the excellent vehicle for measuring a large

population. Shobowole (2003:34) adds that it helps in the standardization of the

researchers questions and guarantees as much as possible uniformity of answers

from respondents and it also facilitate data processing through the easy coding.


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However, it is also an exploratory study which seeks to collect data in order to

answer the research question and which form the basis for the study.

3.2 AREA OF STUDY:

The researcher chose Gbagade in Badagry local government area, Lagos state, as

the area of study. It has a population count of about 50,000 inhabitants and its

major inhabitants are Yorubas with a slight mixture of Igbos, Urhobos and Hausa.

It is a rapidly developing town located in the suburban part of Lagos state. Its

inhabitants are predominately traders, bankers, consultants and students.

The reasons behind its selection by the researcher are embedded in the growing

demand for electronic commerce in the area, since the area is dominated by

bankers, traders and students.

3.3 POPULATION OF STUDENT:

The researchers population of study comprises of those individuals in the society

who possess the following attributes;

a- The age requirements of at least 25 yearsb- Gainfully employed or own a business


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c- Business must involve; service provision scale or purchase.The population of the study is thus finite as it can be derived using a survey

technique which would show the satisfactory candidates and their level of

satisfaction. Thus the population size would be 50 respondents.

3.4 SAMPLE AND SAMPLING TECHNIQUE:

In selecting the sample, the researcher adopted the simple random sampling

technique. This technique was adopted to ensure that each person in the population

had equal chances of being selected in the sampling in order to obtain a reasonably

accurate data which is said to be the sign of success to effort towards a research

study. Hence, the total number of sampler selected were 50 in number.

3.5 INSTRUMENT FOR DATE COLLECTION:

The major instrument employed by the researcher for the purpose of collecting

data was the structured questionnaire. 50 copies of the questionnaire which were

structured by nature were sent out to the randomly selected samples with useful

information on the subject.


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3.6 VALIDITY AND RELIABILITY OF INSTRUMENT:

The instrument was examined and content validated by my project supervisor Mr.

Ahemefuna Odiemena, Economic department Madonna University, Anambra state.

The instrument was also examined by an external professional in the field. The

questionnaire was thoroughly examined by them and based on the

recommendation; necessary reviews were carried out on the instrument.

3.7 ADMINISTRATION OF THE INSTRUMENT:

The researcher personally administered 50 copies of the questionnaires by hand to

different individuals chosen as respondents. After two weeks interval the

researcher went back to collect the responses contained in the questionnaire issued

out to the respondents.

3.8 METHOD OF DATA ANALYSIS:

The responses gotten from the questionnaires were presented in tabular form. The

responses in tables were converted to percentages. Interpretations were based in

the findings and research questions in use.


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The statistical tool employed was the chi-square (X2) to test the statistical

significant differences between the observed and the expected frequencies. The

chi-square formula is thus given as;

X2

= (Oi-Ei)2

Ei

Where; X2= chi-square

Oi = Observed frequency.

Ei = Expected frequency.


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CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND DISCUSSION

4.1.1 ADMINISTRATION OF QUESTIONNAIRE:

TABLE 1

CATEGORY DISTRIBUTION PERCENTAGE (%)

Collected 47 94%

Not collected 3 6%

Total 50 100%

From the above, 50 questionnaires in total were administered to the respondents.

47 questionnaires were returned, which forms 94%, while 3 questionnaires were

not returned making 6% of the questionnaires.


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4.1.2 SEX OF RESPONDENTS TABLE:

TABLE 2


Male 29 61.7%

Female 18 38.3%

Total 47 100%

From the above table, there were a total of 47 valid respondents, who consisted of

20 males (61.7%) and 18 female (38.3%)

4.1.3 AGE OF RESPONDENTS:

TABLE 3


25-35 years 16 34.0%

36-45 years 10 21.3%

Above 45 years 21 44.7%


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47 100%

The above table states that, of the 47 respondents, 16 (34%) were between the ages

of 25-35 years, 10 (21.3%) were between the ages of 36-45 years, and 21

respondents (44.7%) were above the ages of 45 years.

4.1.4 EMPLOYMENT QUALIFICATION:

TABLE 4

CATEGORY DISTRIBUTION PERCENTAGE

unemployed 0 0%

Self employed 27 57.4%

employed 20 42.6%

TOTAL 47 100%

The above table states that, of the 47 responsibility none (0%) were unemployed,

27 (57.4%) were self-employed and 20 respondents (42.6%) were employed


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4.1.5 NATURE OF BUSINESS/EMPLOYEMENT:

TABLE 5

CATEGORY DISTRIBUTION PERCENTAGE

SERVICE

PROVISION

18 38.3%

BUYING AND

SELLING

23 48.9%

OTHERS 6 12.8%

TOTAL 47 100%

The above table states that, cut of the 47 respondents, 18 (38.3%) were into service

provision business/employment, 23(48.9%) were into buying and selling

business/employment and 6 (12.8%) were into other types of

business/employment.


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ANALYSIS OF DATA:

In analysing the responses of the 47 valid respondents, positive and negative state

were used for easy analysis. Positive statement implies an agreement with the issue

under review which will lead to the acceptance of the alternative hypothesis (H1).

On the other hand, negative statement implies a disagreement with the issue under

review, which will lead to the rejection of the alternative hypothesis (H1) and

acceptance of the null hypothesis (H0). The table below will show the responses to

question No.6 in the questionnaire

4.1.6 TABLE 6


Positive 47 100

Negative 0 0

Total 47 100


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From the above table, 100% of the respondents (47) indicated that e-commerce has

a high potential on wealth creation in Nigeria. No respondent gave a category

statement.

The table below will show the responses to question No.1 in the questionnaire

4.1.7 TABLE 7


Positive 19 40.4

Negative 28 59.6

Total 47 100

From the table above 19 respondents (40.4%) indicated conformity that e-

commerce is performing optimally in Nigeria. 28 respondents (59.6%) disagreed

with the statement.

The table below will show the responses to question No.8 in the questionnaire.

4.1.8 TABLE 8


Positive 45 95.7


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Negative 2 4.3

Total 47 100

The above indicates that 45 respondents (95.7%) gave positive remark concerning

the issue that effective utilization of e-commerce will lead to economic growth in

Nigeria, while 2 respondents making 4.3% gave a negative remark concerning the

issue.

The Table below will show the responses to the question No.10 in the

questionnaire

4.1.9 TABLE 9


Positive 28 59.6

Negative 19 40.4

Total 47 100

The table above indicates that 28 respondents (59.6%) gave their remark as e-

commerce has been widely accepted in Nigeria. 19 respondents (40.4%) gave

negative remarks.

The Table below shows the responses to the question No.11 in the questionnaire.


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4.1.10 TABLE 10


Positive 8 17

Negative 39 83

Total 47 100

The Table indicates that 8 respondents (17%) gave positive remarks that

Government has done enough to ensure the optimal performance of e-commerce in

Nigeria. 39 respondents (83%) who are the majority gave negative remarks.

The Table below will show the responses to the question No. 12 in the

questionnaire.

4.1.11 TABLE 11



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Positive 39 83

Negative 8 17

Total 47 100

The Table indicates that majority of the respondents 39(83%) agree to the

statement that inadequate information and improper orientation is an obstacle to e-

commerce in Nigeria while 8 respondents (17%) disagree or gave negative

remarks.

The Table below will show the responses to the question No. 13 in the

questionnaires

4.1.12 TABLE 12


Positive 47 100

Negative 0 0

Total 47 100


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The Table above indicates that 47 respondents (100%) agree or gave positive

remarks that the poor security and privacy level are independent to the growth of e-

commerce in Nigeria.

The Table below shows the responses to the question No.14 in the questionnaire.

4.1.13 TABLE 13


Positive 21 44.7

Negative 26 53.3

Total 47 100

From the above table indicates that 21 respondents (44.7%) gave positive remarks

that the private sectors participation in e-commerce is scarce in Nigeria, and a

majority of 26 respondents (53.3%) gave negative remarks.


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The table below shows the responses to the question No.15 in the questionnaire.

4.1.14 TABLE 14


Positive 43 91.5

Negative 4 8.5

Total 47 100

From the table above, it shows that 43 respondents (91.5%) gave positive remarks

about the statement that e-commerce has caused a positive affiliate between

Nigeria and the developed world. 4 respondents (8.5%) gave negative remarks to

this.

TEST OF HYPOTHESIS:

After going through the process of Data presentation and statistical interpretation,

the hypothesis earlier developed in Chapter one (1) will be tested using the Chi-

Square (X2) test

The test statistics is given by

X2

= (Oi-Ei)2

Ei


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Where X2

= Chi-Square test

Oi = Observed frequency

Ei = Expected frequency

4.2.1 TEST OF HYPOTHEISIS

Ho: There is no economic benefit in e-commerce in Nigeria

H1: There is an (are) economic benefit(s) in e-commerce in Nigeria

Question N0.9 in the questionnaire will be used to test the above hypothesis

Question No.: There is an economic benefit in e-commerce in Nigeria


Positive 38 80.85%

Negative 7 19.15%

Total 47 100%


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Chi-square X2= (Oi-Ei)

2

Ei

Ei =N/K

Ei =47/2

Ei =23.5

Oi Ei Oi - Ei (Oi - Ei)2

(Oi-Ei)2

Ei

38 23.5 14.5 210.25 8.95

7 23.5 -14.5 210.25 8.95

Calculated Chi-square (X2) = 17.90

Level of significance = 5% or 0.05

Degree of freedom (d.f) = (C-1) (r-1)

(d.f) = (5-1) (2-1)


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(d.f) = (4) (1)

Degree of freedom = 4

At 5% (0.05) level of significance and 4 degree of freedom

Tabulated Chi-square (X2) is 9.488

Calculated Chi-square (X2) is 17.90

DECISION:

Since the tabulated chi-square (X2) value (9.488) is less than the calculated Chi-

square (X2) value (17.90), reject the null hypothesis (H0) and accept the alternative

hypothesis (H1), which states that; there is an economic benefit in e-commerce in

Nigeria.


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SUMMARY/ DISCUSSION OF FINDING, CONCLUSION AND

RECOMMENDATIONS

5.1 SUMMARY OF FINDINGS

Since the inception of e-commerce in Nigeria, both the service and retail sectors

have noticed a significant growth, if not for some problems like the poor security

and privacy level, low profitability level, inadequate information and improper

orientation that have stood as impediments to the growth of e-commerce in

Nigeria. These listed obstacles have stood in the way of both the private and the

public sectors, causing them not to identify the viability of e-commerce as a virtual

world market in the 21st

century in Nigeria. The significance of this study was to

reveal the potentials hidden in the e-commerce sector, as well as enhance

knowledge on the factors hindering the effective performance of e-commerce in

Nigeria. Relevant literatures on the economics of e-commerce of e-commerce in

Nigeria were examined to find out the extent of work already done.

The main data collection technique employed by the researcher on the study was

the administration of questionnaire. The questionnaire was successfully subjected

to reliability and validity task before it was finally administered. The items were

sent to valuators who examined them in terms of face and content validations. A

simple random sampling technique employed in order to select the samples of the


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study. The sample size is 50, although only 47 respondents proved capable of

providing relevant information for the research work. In data analysis, frequency

table and Chi-square (X2) test were the technique used.

5.2 DISCUSSION OF FINDINGS

From the data collected from the issue of questionnaire to respondent, various

insights were gotten and inference was made from the distribution of the data into

positive and negative.

Table No.6 shows the distribution of respondents into positive and negative,

showing their respondent to the statement; e-commerce has a high potential on

wealth creation in Nigeria. All of the 47 respondents agreed to this statement.

Table No.10 with the statement; Government has done enough to ensure the

optimal performance of e-commerce in Nigeria. 39 of the respondents making up

83% of the total respondents disagreed with the statement. This disagreement

means the Government has not done enough to optimize the performance of e-

commerce.

Table No.13 shows that poor security and privacy level are impediments to the

growth of e-commerce in Nigeria. This is so because the entire respondent agreed

to this statement.


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From the hypothesis tested in the research work, it can be inferred from the result

gotten from the testing that the alternative hypothesis (H1) was accepted, while the

null hypothesis (H0) was rejected. This is following the result of the tabulated Chi-

square (X2) = 9.488being less than the calculated Chi-square (X

2) =19.

When the result from the hypothesis tested is thoroughly examined, it can be

inferred that e-commerce has economic benefit(s) in Nigeria. Not to forget from

the other result also, e-commerce in more or less untapped, and if fully utilized can

facilitate rapid and positive economic growth in Nigeria.

In the course of the research work, the following findings were made;

a) There is an economic benefit in e-commerce in Nigeriab) That e-commerce has high potential of wealth erection in Nigeria.c) Effective utilization of e-commerce will lead to economic growth in Nigeria.d) Government has not done enough to ensure the optimal performance of e-

commerce in Nigeria

e) Inadequate in formation and improper orientation is an obstacle to e-commerce growth in Nigeria

f) Poor security and privacy level are impediments to the growth of e-commerce in Nigeria


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g) Electronic commerce has caused a positive affiliate between Nigeria and thedeveloped world.

h) E-commerce has not been widely accepted in Nigeria.

5.3 CONLUSION

Nigeria is yet to accept and access the full potentials of the economics of the e-

commerce as a virtual world market for the 21st

century in Nigeria, as practically

every sector of the country either publics or private sectors are yet to tap out of the

numerous potentials of electronic commerce in this 21st

century.

According to Thomas L. Friedman (The world is flat, 2007), the world is flat is a

phrase he uses in terming the leveling of the world into a flat competitive field.

This leveling was carried out by the help of e-commerce a vital tool in the 21st

century trade. Nations, multi National, individual cannot stand the worlds

competition; even globalization cannot be achieved. Nigeria can have a foot in the

global economy only if it embraces the unending benefits e-commerce has to offer.

Nations like China and India are classified as emerging economy since they took

advantage of e-commerce and utilize the potentials. Nigeria can as well do the

same so as to move our economy higher, and stand in the competition of in a

flatting world.


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However if the potentials of e-commerce sector in the country are effectively

exploited, Nigeria stands to benefit from an increased Gross Domestic Product

(G.D.P) , an improved per capital income and a general rise in the standard of

living of over 140 million Nigerians.

Therefore, the public and private sector should through combined efforts,

participate in the economics of e-commerce as a virtual world market for the 21st

century in Nigeria.

5.4 RECOMMENDATIONS:The following are the recommendations by the researcher;

a) Government should provide adequate information and proper orientation toits citizens pertaining the viability of e-commerce in Nigeria

b) Government should boost the security systems and privacy level so as toencourage both the private and public participation in the economic of e-

commerce.

c) Government should reduce the present legislation stipulating that businesseswishing to provide internet services must be 70% locally owned, since

domestic or locally owned businesses do not have to resources to venture

into internet businesses. This can otherwise be referred to as encouraging

foreign investment.


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d) Government should specify Intellectual property law as there is no specificlegislation concerning intellectual property and e-commerce.

e) Government should specify basis of taxation on e-transaction as no presenttax law in Nigeria has specified account for e-transactions.

f) Government should establish an independent regulatory body that willpromote the economic of e-commerce in Nigeria.

5.5 SUGGESTIONS FOR FURTHER STUDIES:The following topics have been suggested by the researcher for investigation in

order to carry out further studies;

a) The viability of e-commerce in the Nigeria economy.b) The impact of the Nigeria communication commission as an independent

regulatory body that promotes growth in information and communication

technologies since the inception in Nigeria.

c) E-commerce as an economic tool to repositioning Nigeria in the globaleconomy.


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5.6 LIMITATIONSThe researcher during the research period had some limitations which hindered the

researcher during the research, some of them are;

i. Collection of the questionnaire from the respondents in due time for theanalysis of the data.

ii. Transportation from Okija to Lagos for research purpose.iii. Time for the entire project was not sufficient, as academic work was

interfering with the research.

Documents

The Economic of E-commerce as a Virtual World Market in the 21st Century in Nigeria