Digital Trade Law and the Rise of E-Commerce in Nigeria

Nigeria’s digital commerce has expanded exponentially over the last few years, which has demanded a new digital commerce law framework in Nigeria. With increasingly more consumers purchasing online, the government has implemented landmark legislation on the rise and governance of the business. Such legislations as the Nigeria Startup Act (2022) and the Nigeria Data Protection Act (2023) provide official guidance on startup formalities on tech startups and data protection. Internet marketing consumer protection falls within the Federal Competition & Consumer Protection Commission (FCCPC) purview. At the regional level, Nigeria leads the rise within the African Continental Free Trade Area’s (AfCFTA) digital guidelines. In 2025 the AU even awarded Nigeria its “Digital Trade Champion” status by facilitating the mediation of the breaking of the AfCFTA digital trade. Such legislations and accords strive towards balancing the booming online business in Nigeria with customer protections and cross-border norms.

Chief Digital Commerce Laws

Nigeria Startup Act (2022): Creates the official “Startup Label” in young startups and incentivizes them. Tax exemption for startups (under 10 years) accredited, export counseling, grant and capital initiatives on innovation endeavors are provided. More citizens are attracted to internet business startups in Nigeria.

Nigeria Data Protection Act (2023): Signed into legislation in June 2023, the NDPA establishes strict data privacy guidelines for all online platforms. The Act widely defines “personal data” and places obligations on data controllers and processors analogous to GDPR (such as consent, security and data breach notifications). The Act established the Nigeria Data Protection Commission as the enforcer for the protection of privacy rights, enhancing consumer confidence in online commerce.

Consumer Protection (FCCPA 2018): Regulation by the FCCPC, the Federal Competition and Consumer Protection Act provides for clear product description by internet businesses, warranties and unambiguous refund arrangements. The FCCPC regulation on e-business especially requires clear disclosure and prominent liability provisions in internet business terms. Nigerian consumers are thereby protected by the act from fraud (false advertising, non-delivery, etc.) in business on the internet.

AfCFTA and Cross-Border Digital Trade

Africa’s new trade deal also touches on e-commerce. The Digital Trade Protocol (adopted Feb 2024) of the AfCFTA provides a common framework for digital business across borders. The areas covered range from digital identification to cross-border data movement, rules on encryption/source code, online security and fintech collaboration. Nigeria has been at the vanguard in these negotiations. In February 2025 the African Authority formally declared Nigeria its “Digital Trade Champion”, in praise of Nigeria’s role in getting the protocol implemented. The officials in Nigeria record that the protocol, “a game changer”, will potentially generate millions of jobs as well as invigorate the digital economy in Africa. In essence, the Nigerian e-trade businesses will in the near future potentially be able to sell more freely in other African markets through these normalized rules.

Market Leaders in E-Commerce and Fintech

• Local players and fintechs dominate the digital marketplace in Nigeria. Retail is headed by Jumia, “Africa’s Amazon”. But it lists over half a million products; it even spawned the delivery arm recently. In 2025, the Jumia Delivery from Nigeria was launched by Jumia with one of the biggest fleets of dispatch vehicles in a bid to transform the last-mile.
• Konga (merged with Zinox/Yudala) is another giant marketplace. Konga invested in KOS logistics and same-day delivery infrastructure way back in 2016 in a bid to expedite shipping for the customer in Nigeria.

On the paying side, the ecosystem is led in Nigeria by the fintechs. Paystack (acquired by Stripe), for instance, offers the online payment gateway being consumed by over 200,000 companies in Nigeria. Flutterwave in the same manner facilitates companies receiving card and mobile money payments from all over Africa. Such fintechs assure the e-shopping websites will facilitate the local mode of payment (bank deposits, USSD and mobile wallets), gaining the confidence of the consumers in Nigeria. In short, local companies such as Jumia and Konga provide the retail and logistics infrastructure, and Paystack, Flutterwave and others provide the digital underwriting in payment on which the online business in Nigeria is facilitated.

Challenges

Despite all these accomplishments, merchants and platforms still face difficulties. Key trends and challenges are:

Logistics & Delivery: The last-mile delivery remains the chokepoint. While there are new entrants like Jumia Delivery, highway congestion in Nigeria and uneven terrain discourage shipping. Courier penetration is insufficient in the rural regions and the handling fees are expensive. Businesses invest in more 3PL partners and distribution centers but still have areas where customer satisfaction falls through the cracks.

Digital Payments: Fintechs exist in Nigeria and have driven the increase in ecommerce. Local transaction processors (such as Flutterwave, Paystack) simplifying integration into businesses has minimized transaction hassles. (Paystack even has over 200,000 merchants on the platform in Nigeria.) Nonetheless, cash-on-delivery or regular mode of transaction remains the preference of the consumers. Digital financial inclusion and trust in the efficacy of e-payments are continually on the rise.

Data Protection: With broader public purchasing over the internet comes the expanded need for the protection of consumers’ information. The NDPA 2023 brings compliance (data audits, data-breach fines, consumers’ rights) into global data-protection standards for Nigeria. That builds confidence but will see small businesses invest in compliance too. Businesses now regularly perform privacy-impact analyses and appoint Data Protection Officers for bigger-than-average data-sets in the statute.

Regulatory Issues: E-business in Nigeria is complex. All digital online adverts should have prior approval by the regulator, for instance, and large user-base websites should actively censor content (stripping illegal adverts). Consumer laws should likewise demand liability-limiting terms in any Contract prominently set out in full on customers. Compliance with above rules may slow launches by new service providers.

Taxation: Internet sales have been taxed by the government. Foreign internet businesses earning more than ₦25 million in Nigeria are coerced by a “sizeable economic presence” directive into registration by the tax authorities and payment of corporate tax. An amendment in 2019 in the Act on Companies Income has essentially implemented a digital services tax in the sense that nonresident internet businesses are taxed in Nigeria. That adds more cost and complexity for internet businesses selling over borders.

Consumer Confidence: The norm is gaining confidence and the exception is the negative. Security has been fortified by the authorities. E-transaction fraud is punishable by Nigeria’s Cybercrimes Act (2024), and payment gateways should now be encrypted. The FCCPC actively urges consumers to purchase on credible websites and pay safely. All the same, instances of fraud or non-successful deliveries still discourage some consumers. E-merchants thus emphasize guarantees, easy return procedure, and compliance with FCCPC regulation in the quest for consumers’ confidence.

Conclusively, as the digital market in Nigeria develops further, the innovation and legislation will have more influence on the business environment. In the meanwhile, business-savvy companies are the ones utilizing the nation’s vibrant financial technology ecosystem and transportation networks, besides regulation in e-commerce in Nigeria, and observing consumer protection and data protection guidelines.