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Nigeria stands at a critical juncture in its technological journey with the introduction of its proposed Artificial Intelligence (AI) legislation. As global AI advancements surge and local innovators strive to make their mark, this bill aims to establish a regulatory framework that could shape the trajectory of AI within Africa’s most populous nation. However, beneath its ambitious objectives lies a heated debate: will this law nurture homegrown talent or inadvertently erect obstacles that stifle innovation?
Examining the bill alongside expert interviews, policy critiques, and international comparisons-including insights from the Alliance4AI-reveals a law caught between two conflicting priorities. On one hand, it seeks to shield Nigeria from the dangers of automated decision-making, algorithmic discrimination, and data misuse. On the other, it aspires to leverage AI as a catalyst for economic growth, empowering Nigerian developers, startups, and researchers to compete on the global stage. The balance struck between these aims will ultimately determine whether the legislation acts as a springboard or a stumbling block for Nigeria’s digital advancement.
Regulation vs. Innovation: A Delicate Balance
At first glance, the AI Bill appears to be a progressive step toward responsible governance-introducing measures to oversee high-risk AI applications, enforce accountability, and prevent misuse. Its language echoes that of the European Union’s AI Act and other international regulatory frameworks. Yet, a deeper dive reveals a framework heavily skewed toward control, granting expansive authority to government bodies that currently lack the expertise and infrastructure to manage such oversight effectively. The licensing requirements embedded in the bill could impose prohibitive costs on local innovators, potentially sidelining them from the market.
Anda Usman, CEO and Co-founder of Datum Africa, warns, “Nigeria risks repeating the fintech sector’s over-regulation mistakes-burdening startups with compliance and creating excessive bureaucratic layers. Premature and heavy-handed regulation risks turning Nigeria into a consumer rather than a creator of technology.”
Unlike the U.S., which prioritizes innovation-friendly policies, Nigeria’s approach mirrors the EU’s more stringent regulatory style. Notably, the EU itself is reconsidering its tough stance, with plans to simplify the General Data Protection Regulation (GDPR) and adjust AI-related provisions as of November 2025, reflecting a global trend toward balancing regulation with innovation support.
Challenges of Licensing and Compliance for Local Innovators
A central point of contention is the bill’s licensing framework. Developers aiming to create or deploy certain AI systems must secure licenses that entail fees, extensive documentation, third-party audits, and continuous monitoring. While multinational corporations can absorb these expenses, Nigerian startups, academic institutions, and independent developers often lack the financial and operational capacity to comply.
This raises a critical question: who truly benefits from this legislation?
Proponents argue that licensing safeguards Nigerian citizens from unsafe or exploitative AI technologies. John Wambugu, a digital industries leader, supports the establishment of an AI Council, emphasizing its role in fostering trust, coordination, and standard-setting. “Transparency, audits, and oversight are vital for responsible AI deployment,” he notes.
Conversely, critics fear that the high compliance costs will push local innovators out, leaving Nigeria dependent on foreign AI providers who may operate with less scrutiny. This dynamic risks transforming Nigeria into a market for imported AI solutions rather than a hub for homegrown innovation.
Regulatory Gaps: Foundational AI Models Left Unaddressed
One significant shortfall of the bill is its failure to explicitly address foundational AI models-large-scale systems like GPT-4, Claude, or emerging Nigerian large language models (LLMs). Globally, foundational models are subject to intense scrutiny regarding safety, transparency, computational demands, and downstream risks. Nigeria’s legislation, however, lumps all AI systems into broad categories, leaving classification decisions to regulators on a case-by-case basis.
This ambiguity creates uncertainty for developers planning infrastructure investments and model training strategies. Local innovators, already grappling with limited GPU access, unreliable electricity, and costly cloud services, face disproportionate challenges. Meanwhile, foreign companies can operate remotely, treating Nigeria merely as a consumer market and circumventing domestic constraints.
Absence of Incentives to Foster Local AI Development
Perhaps the most glaring omission in the bill is the lack of provisions to actively support Nigerian AI innovation. Unlike the European Union, which pairs regulation with billions in research funding, or nations like the UAE and Singapore that invest heavily in innovation sandboxes and national computing resources, Nigeria’s bill offers no grants, tax breaks, or infrastructure support for AI startups and researchers.
There are no initiatives to provide open government datasets, encourage collaboration between academia and industry, or develop ethical AI education programs. The bill also neglects to establish fellowships, scholarships, or cloud computing subsidies that could nurture the country’s AI talent pool.
As Alex Tsado, founder of Alliance4AI, succinctly puts it, “Nigeria is regulating without enabling, controlling without empowering.” In an ecosystem dominated by resource-constrained startups and young developers, this lack of supportive measures represents a critical vulnerability.
Concerns Over Centralized Regulatory Authority
The bill also centralizes significant power within a newly formed regulatory agency, granting it broad discretion to classify AI systems as “high-risk,” set licensing conditions, approve providers, and enforce penalties. Without robust checks and clear operational mandates, this concentration of authority raises concerns about potential regulatory overreach or bureaucratic gridlock.
“Innovation that requires prior approval becomes fragile,” warns Tsado. Lengthy approval processes and regulatory delays could force startups to scale back ambitions or relocate to countries with more agile frameworks.
Foreign Firms’ Competitive Edge
A troubling consequence of the bill is the inherent advantage it grants to foreign companies. Multinational tech giants like Google, Meta, and OpenAI are accustomed to rigorous compliance regimes, maintaining dedicated teams for safety assessments, legal documentation, and third-party audits across multiple jurisdictions. Nigerian startups, by contrast, often lack these resources and institutional capacities.
John Wambugu emphasizes, “Compliance requirements should be streamlined for startups to prevent stifling the ecosystem.”
This disparity risks entrenching foreign dominance in Nigeria’s AI landscape, turning the country into a net importer of AI technologies rather than a developer. Tsado advocates for a tiered regulatory approach: minimal oversight for academic and pre-commercial local projects, coupled with stringent safety and tax regulations for large foreign AI models operating within Nigeria.
Navigating Nigeria’s AI Future: A Defining Moment
The fundamental question is not whether Nigeria should regulate AI-global consensus affirms the need-but how it should do so.
Will Nigeria adopt a balanced framework that safeguards its citizens while fostering a vibrant local AI ecosystem? Or will it implement a restrictive regime that favors foreign players and sidelines domestic innovators?
The path chosen will shape Nigeria’s position in the global AI arena for years to come.
