How Nigeria Made $600m Transactions In 2 Years Via Mobile Money

This figure, according to the Minister of Communications Technology, Dr. Omobola Johnson was attained from 11 million transactions.

Johnson, while making a presentation at the American Business Council in Lagos, noted that there are over 18 mobile money operators registered in Nigeria by the Central Bank of Nigeria since commencement of operations with over one million subscribers and about 67,000 registered agents across the country.

The minister, who said Nigeria’s eCommerce sub-sector is gain much traction from both local and foreign investors and has subsequently created over 15, 000 jobs, informed that mobile money is currently mostly used to buy airtime. She however, said the initiative has the potential to serve as a platform for drawing more people into formal financial services.

Statistically, she said 57.8 per cent of registered mobile money users use it to buy airtime; 49. 2 per cent used it to send money; 38.2 per cent used it to receive money; 30.5 per cent used it to pay bills while 5.3 per cent used it for other functions.

According to her, Nigeria’s bourgeoning electronic commerce (eCommerce) market, whose worth was $35 million as at 2012 has grown to $550 million within the last two years.

She said with a market potential expected to reach $10 billion soonest, the eCommerce, which does 1000 orders per day two years ago, now do 15,000 with a projection of 300,000 orders soonest.

The minister, who informed that wholesale and retail trade sector accounted for 17 per cent of the country’s Gross Domestic Product (GDP) in 2013; making it the third largest contributor to GDP, said among the factors driving eCommerce in Nigeria is the demographic characteristics of demand, saying that almost 40 million Nigerians are in consuming class households.

She also said that the large population of urban, tech-savvy young people, which are supported by government funded initiatives; growing innovation / ideation ecosystem, which is fuelling a growing number of local ecommerce companies.

Johnson also observed the Lagos advantage, stressing that the the coastal "mega city", has created a natural trade and commerce centre acting as springboard for consumers.

The minister also said the option of buying from international markets available and the entry of international payment firms increasing access of consumers to international merchants.

The challenge of delivery time, according to Johnson is followed by poor Internet connection; lack of security; lack of options with 28.36 per cent; 23.55 per cent; 6.30 per cent and 10.45 per cent respondents respectively.

Already, analysts are optimistic that the growth in online sales will not recede. This, they added, is because electronic commerce companies are increasingly channelling their energies and resources towards providing locally-relevant solutions to Nigerian customers.