Nigeria set to introduce AI rules to rein in fast-growing digital platforms

Nigeria is preparing to pass a new law that could make it one of the first African countries to regulate artificial intelligence across the economy.

The move comes as global technology firms have expanded rapidly in one of the continent’s fastest-growing digital markets, often without strong legal oversight.

The proposed National Digital Economy and E-Governance Bill would give regulators fresh powers over data, algorithms, and digital platforms.

It also aims to close a regulatory gap that has existed since Nigeria published a draft AI strategy in 2024.

Lawmakers expect to approve the bill by the end of March.

Nigeria’s AI law targets risky systems

The bill introduces tighter scrutiny for higher-risk AI systems, particularly those used in finance, public administration, surveillance, and automated decision-making.

These are areas where AI can shape access to money, services, and opportunities, and where errors or bias can have wider consequences.

Developers of such systems would be required to file annual impact assessments.

These reports would cover risks, mitigation measures, and performance, giving regulators a clearer way to track how AI tools behave once they are deployed.

New regulator powers

The National Digital Economy and E-Governance Bill would give regulators stronger authority to demand information from AI providers and issue enforcement directives.

It also enables regulators to suspend or restrict AI systems that are considered unsafe or non-compliant.

The proposed rules are designed to set a clearer baseline for the market, especially as AI tools become more common in both government functions and the private sector.

For Nigeria, this signals a shift from informal adoption to a more structured environment where digital platforms and AI providers may face closer checks.

Fines raise compliance pressure for AI providers

Under the bill, regulators would be able to impose fines of up to 10 million naira ($7,000) or 2% of an AI provider’s annual gross revenue from Nigeria.

The proposal does not spell out how penalties would be assessed, but it would still introduce a direct compliance risk for companies operating in the country.

This enforcement mechanism is likely to matter most for firms building or deploying tools at scale.

It could also influence how international technology companies structure their systems, policies, and reporting in Nigeria, particularly when their products fall into the higher-risk category.

Risk-based standards and controlled testing

Nigeria plans to regulate AI early rather than retroactively as adoption accelerates across finance, public services, and private companies, according to Kashifu Abdullahi, the director general of the National Information Technology Development Agency.

If passed, the law would make Nigeria one of the first African nations to adopt a comprehensive, economy-wide AI regulatory framework.

Abdullahi has said other countries, including Mauritius, Egypt, and Benin, have AI strategies, but do not yet have full legislation.

The proposed law sets ethical standards around transparency, fairness, and accountability.

It also uses a risk-based approach similar to frameworks emerging in Europe and parts of Asia, potentially reshaping how companies from Google to Chinese cloud providers operate in Africa’s most populous nation.

The bill also includes the creation of controlled AI environments, allowing startups and institutions to test new technologies under regulatory supervision.

The goal is to support innovation while keeping safeguards in place, and to make it easier to identify and contain harmful uses of AI.