The National Digital Economy and E-Governance Bill, which includes comprehensive AI regulation, is expected to pass by March 2026. This will make Nigeria one of the first African countries with a dedicated AI legal framework.
Key Provisions
Risk-Based Classification
Similar to the EU AI Act, Nigeria's framework will classify AI systems by risk level:
Unacceptable Risk
Examples: Social scoring, manipulative AI
Status: PROHIBITED
High Risk
Examples: Healthcare, finance, employment AI
Requirement: Strict compliance mandatory
Limited Risk
Examples: Chatbots, recommendation systems
Requirement: Transparency obligations
Minimal Risk
Examples: Spam filters, games
Requirement: Voluntary codes only
Compliance Requirements
- Impact Assessments: Annual assessments required for high-risk AI systems
- Data Governance: Strict requirements for training data quality and bias mitigation
- Transparency: Users must be informed when interacting with AI systems
- Human Oversight: High-risk decisions must have human review mechanisms
Penalties
Non-compliance can result in fines up to NGN10 million or 2% of annual revenue, whichever is higher. Severe violations may lead to operational restrictions.
Regulatory Sandboxes
The law provides for regulatory sandboxes that allow startups to test innovative AI applications under supervised conditions. This is designed to balance innovation with consumer protection.
Implications for Tech Investors
Opportunity: Companies that achieve early compliance will have a competitive advantage in Nigeria's growing AI market.
Challenge: Compliance costs may be significant for smaller companies, potentially favoring larger players.
I-STRATA Advisory
We help tech companies navigate Nigeria's evolving regulatory landscape. Our services include regulatory analysis, compliance planning, and engagement with relevant government agencies.