LEGAL AND REGULATORY FRAMEWORK FOR SETTING UP AN E-COMMERCE BUSINESS IN NIGERIA

Introduction:

E-commerce as the name implies is a form of electronic commerce, which is by way of online or internet based business of trade (i.e. buying and selling of goods, services and products) through electronic means by way of technology and use of electronic fund transfer, mobile trade, escrowing services, electronic data related exchange, supply, internet methods, e-commerce transactions with modern technology in every facet of business and trade in Nigeria.

The internet has now become one of the cheapest media for conducting commercial transactions today. E-commerce transactions occur mostly without the parties seeing each other, and this puts the e-consumers at a disadvantage as they become victims of fraud, misrepresentation and other unfair practices. Hence the need to come up with legal/regulatory framework protecting the e-commerce consumers against deceptive and unfair trade practices on the part of the traders.

This paper seeks to address some of these Legal and regulatory guidelines for setting up and running an e-commerce businesses in Nigeria.

Electronic consumer (E-consumer):

The word consumer encompasses different categories of persons. It comprises of all end users of goods and services.

It is important to note that a group or class of individual consumers can also be accommodated within the meaning of a consumer.

The word e-consumer means a purchaser of goods and services electronically via the internet or websites of e-traders/merchants; they are also known as online buyers. E-traders/merchants on the other hand are sellers of goods and services electronically via the internet or their websites also known as online sellers.

Advantages of E-commerce:

There are numerous benefits of e-commerce which includes but not limited to the following;

  1. E-commerce facilitates business transactions without the barriers of distance or time as purchases can be made 24 hours a day and 7 days a week.
  2. Goods/services can be purchased from anywhere in the world.
  3. Consumers can shop from the comfort of their homes online.
  4. Consumers are availed with varieties of products to choose from as they are at liberty to browse through a wider range of products online.

Disadvantages of E-commerce:

E-commerce has its limitations and these limitations include;

  1. No guarantee as to the security/exclusivity of the transaction and privacy
  2. Inability to identify, view or touch the items sought to be purchased.
  3. Vagueness of information offered about the product displayed.
  4. Establishing an online business is very easy, this leads to the creation of fake online business sites used in defrauding e-consumers.

The disadvantages listed above underscores the need for an adequate legal protection for e-consumers. Otherwise the consumers will be ripped off and subjected to all types of unfair trade practices as obtainable in the ordinary commercial transactions.

E-COMMERCE PROTECTION IN NIGERIA

In Nigeria, the general conception is that not enough has been done in the area of regulating e-commerce as studies conducted on e-commerce in Nigeria shows that the country lags behind in ICT based legislation and that the existing statutory laws are quite inadequate to address the pressing legal issues affecting e-commerce and e-consumers in the country. These issues include; electronic evidence, cybercrimes, security and data protection, e-payment system and inevitably trans-border issues etc.

LAWS REGULATING E-COMMERCE TRANSACTIONS IN NIGERIA

Nigeria has enacted several laws to regulate electronic trade transactions in the country some of which will be highlighted below;

  1. The Federal Competition And Consumer Protection Act (FCCPA):
  2. National Information Technology Development Agency Act, 2007
  3. Cybercrimes (Prohibition, Prevention, Etc.) Act 2015
  4. Evidence Act 2011
  5. Constitution Of The Federal Republic Of Nigeria 1999 (As Amended)
  6. Companies And Allied Matters Act 2020

REGULATING E-COMMERCE IN NIGERIA

While much work remains undone regarding e-commerce regulations, recently however, progress has been made to this effect.

  1. THE FEDERAL COMPETITION AND CONSUMER PROTECTION COUNCIL (FCCPC):

The Federal Competition and Consumer Protection Council is a Federal Agency under the Federal Ministry of Trade and Investment that is responsible for competition and consumer protection in Nigeria. It was set up to protect the rights of consumers. It is best practice for issues like how to deal with returns and complaints to be adequately covered in the terms and conditions of the seller. In 2018, the commission was established by the FCCPA to develop and promote fair, efficient and competitive markets in the Nigerian economy and to also facilitate access by all citizens to safe products and secure the protection of rights for all consumers in Nigeria.

  • NATIONAL INFORMATION TECHNOLOGY DEVELOPMENT AGENCY (NITDA):

Following the coming into force of the National Information Technology Development Agency Act, 2007 (NITDA Act) e-commerce regulations now falls under the scope of authority of the National Information Technology Development Agency (NITDA).

The NITDA Act establishes the NITDA as the regulatory body responsible for the development of framework of rules for the governance and monitoring of the exchange of data and conduct of transactions online. Prior to its mandate NITDA has, since its creation in 2007, issued a number of guidelines for the purpose of regulating the e-commerce industry, an example of a constructive regulation issued by NITDA is its Guidelines on Data Protection (September 2013).

  • NATIONAL ELECTRONIC COMMERCE COUNCIL (NECC):

The council governs all electronic commerce affairs in Nigeria and facilitates International trade through an e-commerce infrastructure.

Other regulatory agencies include;

  • Corporate Affairs Commission
  • Federal Inland Revenue Service
  • Cyber Security and Data Protection Agency.

PROCEDURES FOR SETTING UP E-COMMERCE BUSINESS IN NIGERIA

The procedures for setting up an ecommerce in Nigeria are as follows;

  • Register your business name with the Corporate Affairs Commission (CAC):

The first step to take after conceiving a name for the proposed business is to conduct an availability search on the CAC portal and reserve the name, after which you can proceed with the registration of the business name.

When choosing a name, it is advisable to pick a name that best explains what your business is about. So that, with just a glance, your prospective clients can tell the product you sell or the services you offer.

It is important to note that registering a business gives you the credibility to own a corporate account through which clients can transact business with you. A learned client would only want to pay into a corporate account considering the online scam rate. And, there’s no way you can open a corporate account without tendering your business registration certificate.

  • Create Your Online Store:

An online store is a major requirement if you want to start an e-commerce business because you need an online space where customers can transact with you. If you cannot afford the price of a web developer, you can begin with a Word Press free site, then as time goes by, you can upgrade to a paid version.

Additionally, there are other platforms like WooCommerce, Shopify. Jumia, konga, kara  that helps you set up an online store without you having prior knowledge of web designing. So, you may want to consider that. These platforms give you access to everything you need to get started including marketing and other logistics.

Creating Terms & Conditions on the website.

Terms and conditions covers a whole wide range of issues, ranging from data privacy, return & refunds, indemnity, trademarks, copyrights, terms of sale, use of website and mobile applications, use of contents, and a whole lot more.

This legal opinion is by no means exhaustive, it is advised, you visit a legal consultant to guide you through the process of setting up your e commerce site.

Written By Veronica Kiele & Eni Christaina Ukpai

For: Starlion Legal

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