Nigeria prepares to adopt a law which could be the first African country to regulate artificial intelligent across all sectors of the economy.
This move is a response to the rapid expansion of global technology companies in Africa’s digital market, which has often been done without a strong legal framework.
The National Digital Economy and E-Government Bill, as proposed, would grant regulators new powers over data algorithms and digital platforms.
The aim is to also close the regulatory gap which has been present since Nigeria released a draft AI Strategy in 2024.
The bill is expected to be approved by lawmakers before the end of the month.
Nigerian AI Law targets dangerous systems
This bill will introduce a tighter inspection of AI systems that are higher risk, such as those in the finance sector, government administration, surveillance and automated decisions.
AI has the potential to shape how people access money, services and opportunities. It can also have a wider impact on these areas if it is faulty or biased.
The developers of these systems will be required to submit annual impact analyses.
The reports will cover risk, mitigation, and performance. This gives regulators an easier way to monitor how AI tools perform once deployed.
New regulator powers
The National Digital Economy and E-Government Bill will give regulators greater authority to request information from AI service providers and issue directives for enforcement.
The regulators can also suspend or limit AI systems that they deem unsafe or not compliant.
The rules proposed are intended to establish a baseline that is more clear for the market. This will be especially important as AI becomes increasingly commonplace in government and private sectors.
This shift in Nigeria signals the transition from an informal to more structured adoption, where AI and digital platforms may be subjected to greater scrutiny.
AI Providers are under pressure to comply with the law after receiving fines
The bill allows regulators to fine AI providers up to 10,000,000 naira (about $7,500) per year or 2%.
Although the proposal doesn’t specify how fines would be calculated, it still poses a compliance risk to companies that operate in this country.
The firms that build or deploy tools on a large scale are likely to be the ones most affected by this enforcement mechanism.
This could influence the way international technology companies in Nigeria structure their policies, systems and reports, especially when their products are classified as higher risk.
Standardized testing and risk-based tests
Kashifu Abdallahi, director general of National Information Technology Development Agency, said that Nigeria will regulate AI in advance rather than retrospectively, as the adoption increases across the finance sector, government services and private businesses.
The law, if passed, would make Nigeria the first African nation to adopt an economic-wide AI regulatory structure.
Abdullahi said that other countries such as Mauritius Egypt and Benin have AI strategies but not full laws.
This proposed legislation sets out ethical standards for transparency, accountability, and fairness.
The framework also adopts a similar risk-based strategy to that of Europe and some parts Asia. This could reshape the way companies like Google or Chinese cloud providers work in Africa’s largest nation.
This bill includes the creation controlled AI environments that allow startups and institutions test new technology under regulatory oversight.
It is important to encourage innovation, while maintaining safeguards. This will make it simpler to detect and limit harmful AI uses.
The post Nigeria to introduce AI laws to reign in digital platforms that are growing fast may change as new information is revealed.
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