Nigeria Introduces AI Regulation Bill with Mandatory Licensing and Ethical Oversight

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In a landmark move to harness the power of artificial intelligence while safeguarding national interests, Nigeria has introduced a groundbreaking bill that mandates registration and licensing for all AI developers and users within its borders. The legislation, officially titled “A Bill for an Act to Ensure Proper Control of Usage of Artificial Intelligence (AI) Technology in Nigeria and for Related Matters, 2023”, was sponsored by Honourable Sada Soli, the representative for Jibia/Kaita Federal Constituency in Katsina State. 

The bill received its first reading in the House of Representatives on November 22, 2023, signalling Nigeria’s intent to establish a structured governance framework for this transformative technology. Should the bill become law, it would create Nigeria’s first comprehensive legal and institutional architecture for AI oversight, embedding principles of ethical deployment, rigorous supervision, and robust accountability amid a rapidly digitising economy.

Central to this proposed framework is the establishment of a National Artificial Intelligence Council, positioned as the apex regulatory body overseeing every facet of AI development and application across the nation. This council would wield authority to govern, monitor, and sanction AI activities, issuing detailed guidelines, enforcing ethical and technical benchmarks, performing periodic audits, and imposing penalties or operational halts on violators.

With an expansive mandate, the council could greenlight or prohibit AI innovations, whether born from local ingenuity or imported from international shores. This creates a fair environment where both Nigerian startups and multinational corporations must obtain registration and approval to implement AI-driven solutions in the market.

Far from a purely punitive role, the council is envisioned to champion the responsible advancement of AI, ensuring alignment with core values such as human rights protection, public welfare, and bolstered national security.

Tech Cabal reports that at the heart of the bill lies a stringent mandate: every individual or entity involved in developing, importing, distributing, or deploying AI systems in Nigeria must register with the council and obtain formal licensure before any rollout or use.

This requirement, however, makes exceptions for regular users who utilise available AI platforms, such as ChatGPT or Claude, for personal, educational, or work-related purposes without generating income from them. The focus sharpens on creators, vendors, and integrators who embed AI into marketable products or services, sparing casual users from bureaucratic entanglements under the draft’s provisions.

Introducing a nuanced risk-tiering mechanism, the bill categorises AI applications from minimal to elevated risk levels. High-risk areas, like healthcare diagnostics, financial algorithms, public administration tools, and security systems, will be closely examined, requiring developers to conduct detailed impact assessments, disclose where their data comes from and how their algorithms work, and undergo regular checks to ensure

Similar to licensing regimes in sectors such as telecommunications and banking, non-compliance could result in hefty fines, operational suspensions, or the termination of AI functionalities. As clarified in the bill: “The requirement mainly targets those who build, sell, or integrate AI systems into commercial products or services.”

The law goes further than just granting permission; it encompasses critical ethical principles and mandates transparency in the management of AI throughout its development and use. Systems must demonstrate safety, impartiality, and non-discrimination, steadfastly avoiding infringements on human rights or sovereign priorities. Operators are obligated to maintain meticulous logs that encompass design methodologies, data pipelines, and deployment records, all of which are open to council scrutiny.

In scenarios where AI drives consequential automated choices, affecting credit approvals, recruitment decisions, or policing outcomes, individuals must be explicitly notified of the AI’s involvement. Furthermore, mechanisms for explanation and appeal are mandated, tackling the notorious opacity of “black-box” algorithms.

To fortify traceability, comprehensive audit trails become compulsory, enabling the detection and rectification of biases or errors that could cause harm.

Harmonising with the Nigeria Data Protection Act of 2023, the bill insists on adherence to the principles of legality, equity, clarity, and targeted data usage in AI operations.

AI practitioners must source and handle personal data in strict compliance, implementing safeguards against biases associated with attributes such as gender, ethnicity, or religion.

The goal of this synergy is to integrate AI governance into Nigeria’s developing digital regulatory framework, potentially collaborating with organisations like the Nigeria Data Protection Commission (NDPC) and the National Information Technology Development Agency (NITDA). However, the specific institutional placement of the council is still unclear.

Echoing key protections: “In cases where AI systems make automated decisions that significantly affect individuals, such as in credit scoring, hiring, or law enforcement, users must be informed that they are interacting with an AI system.”

A pivotal section targets extraterritorial AI: any foreign-developed system intended for deployment in Nigeria requires council registration and endorsement.

This gives authorities the power to limit or ban foreign AI systems that don’t follow the rules and could harm security or society, which may alter how large international companies provide generative AI, chat services, or analytics in Nigeria without adhering to regulations.

The council’s enforcement arsenal includes probes into grievances, revocation of approvals, and administrative sanctions, with the ability to dismantle offending systems entirely.

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Direct complaint channels to the council promise investigations and remedies, including mandated reparations, for those adversely impacted by AI outputs.

Complementing controls, the bill advocates for AI skill enhancement, research initiatives, and educational programs through public-private partnerships and academic collaborations, all within the framework of supervised innovation.

Provisions prioritise equity, aiming to bridge digital gaps and ensure AI access for women, remote communities, and vulnerable populations.

Despite its ambitions, the bill has sparked debate over its expansive AI definition, which encompasses software, hardware, or hybrids employing autonomous techniques, potentially ensnaring everything from simple scripts to sophisticated neural networks, thereby imposing undue hurdles on progress.

Bureaucratic licensing could disadvantage fledgling enterprises, while jurisdictional overlaps with NITDA, NDPC, the Nigerian Communications Commission (NCC), and the Central Bank of Nigeria risk redundancy or turf wars. Critics also warn of overreach in “national interest” clauses, potentially enabling censorship of foreign tools under vague pretexts.

Nigeria’s initiative aligns with the continent’s momentum, as nations such as Mauritius, Egypt, and Kenya are advancing their AI blueprints. Mauritius leads with an enacted strategy, while Rwanda and South Africa refine theirs.

Kenya’s 2025–2030 plan emphasises ethical inclusion; Egypt targets governmental AI infusion and safeguards. Shared threads include the economic leveraging of AI with risk mitigation.

Yet Nigeria’s emphasis on preemptive licensing and oversight contrasts with that of its peers, who adopt innovation-nurturing approaches—via hubs, incentives, and partnerships, potentially prioritising control over agility.

In Nigeria, conversations about AI regulation have intensified over the past two years, driven by the technology’s rapid proliferation in sectors such as fintech, agriculture, healthcare, and e-governance. The bill’s introduction follows a series of high-profile events, including NITDA’s 2021 draft of the National AI Policy and the 2023 Data Protection Act, which laid the groundwork for data-centric oversight. 

Public discussions increased in 2024, with meetings organised by the Ministry of Communications and Digital Economy, where business leaders, researchers, and community members discussed concerns such as job loss, unfair lending practices by algorithms (as seen in local bank cases), and the misuse of deepfakes in elections. Social media buzz on platforms like X (formerly Twitter) and LinkedIn highlights concerns about stifling Lagos’ burgeoning tech hub, which is home to startups like Flutterwave and Paystack, as they integrate AI. Government rhetoric, as echoed in President Bola Tinubu’s 2024 digital economy speeches, frames regulation as essential for attracting foreign investment while curbing cyber threats. Since 2023, over 50 AI-related bills or amendments have been proposed in the National Assembly. This spate reflects a proactive stance amid global influences, such as the EU AI Act. Still, local nuances—such as Nigeria’s high youth unemployment and informal economy—amplify calls for balanced rules that foster homegrown AI talent without alienating innovators.

AI regulation could profoundly shape Nigeria’s tourism sector, valued at over $5 billion annually and employing millions, by enhancing personalised experiences while introducing compliance hurdles. Notably, licensed AI tools could power virtual reality tours of sites like Yankari Game Reserve or Obudu Cattle Ranch, predictive analytics for peak-season forecasting, and chatbots for seamless visa inquiries, potentially boosting visitor numbers from Europe and Asia by 20–30%, as seen in pilot programs. Ethical mandates against bias ensure inclusive marketing, appealing to diverse demographics and countering stereotypes in promotional algorithms.

For Africa as a whole, Nigeria’s framework may inspire harmonised continental standards under the African Union’s Digital Transformation Strategy, facilitating cross-border AI-driven eco-tourism apps for safaris that span Kenya, Tanzania, and South Africa. This could increase the continent’s 8% share of global tourism revenue by enhancing safety through AI surveillance in high-risk areas, such as wildlife poaching zones.

Negatively, strict licensing for imported AI (e.g., Booking.com’s recommendation engines) could delay adoption, increasing costs for small Nigerian hotels and tour operators by 15–25% and potentially deterring FDI in tech-tourism hybrids. Overlaps with bodies like the Nigerian Tourism Development Corporation might bureaucratise innovations like AI-guided cultural heritage apps for festivals in Calabar or Benin City.

Continentally, if emulated rigidly, it risks fragmenting Africa’s tourism tech ecosystem, slowing recovery from COVID-era losses and ceding ground to less-regulated regions like the Middle East. Ultimately, a facilitative council could position Nigeria as an AI-tourism leader, drawing tech-savvy travellers and conferences, but overreach might erode competitiveness.

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FAQs

1. What does Nigeria’s AI bill require for registration and licensing?  

The bill mandates that developers, importers, distributors, and commercial integrators of AI systems register with the proposed National Artificial Intelligence Council and obtain licences before deployment. Casual users of tools like ChatGPT are exempt.

2. How does the bill classify AI risks, and what are the implications?  

It employs a risk-based system, with high-risk AI applications in areas such as healthcare or finance requiring impact assessments, data transparency, and regular audits. This ensures tighter controls to prevent harm but may increase compliance costs.

3. Does the bill apply to foreign AI companies operating in Nigeria?

Yes, imported AI systems must be registered and approved by the council. Non-compliance could lead to restrictions, bans, or shutdowns, potentially affecting global providers that lack local regulatory alignment.

4. What ethical protections are included in the AI bill?

AI must be safe, fair, and non-discriminatory, with requirements for transparency in automated decisions, audit trails, and alignment with the Nigeria Data Protection Act to avoid biases and protect human rights.

5. How might this bill affect innovation and Nigeria’s tech sector?

While promoting accountability, concerns include bureaucratic delays, overlapping regulations with bodies such as NITDA, and the potential stifling of startups. Balanced implementation could foster ethical growth; overreach might deter investment.