Nigeria is on the verge of becoming a trailblazer in Africa, set to implement a comprehensive legal framework to govern artificial intelligence (AI) with the impending approval of a landmark technology law. This significant move by the National Assembly, aiming to pass the National Digital Economy and E‑Governance Bill before the end of March, signifies a pivotal shift from voluntary AI guidance to formal, enforceable regulation within West Africa's largest economy.

Should the bill receive approval, it will establish mandatory standards for AI usage, granting authorities extensive powers to oversee critical aspects such as data utilization, algorithmic systems, and the digital platforms that increasingly shape both public and private sector activities. The proposed legislation adopts a risk-based approach, meaning that higher-risk AI applications — particularly those deployed in sensitive areas like finance, public administration, and automated decision-making systems — will be subjected to more rigorous scrutiny and oversight.

Under the new framework, developers of AI systems will be mandated to conduct and provide annual impact assessments. These assessments must detail their strategies for mitigating risks and outline key performance metrics, ensuring accountability and transparency. Concurrently, regulators will be empowered with the authority to request pertinent information, issue compliance directives, and even suspend systems that are deemed unsafe or non-compliant with the established standards.

The bill also introduces clear penalties for non-compliance, marking a significant step towards legal accountability in the AI sector. Providers found in violation could face substantial fines, reaching up to ₦10 million naira (approximately $7,000 USD) or up to 2% of their annual revenue generated within Nigeria. This provision is particularly notable as it represents one of the first instances where AI deployments in the country could lead to direct financial consequences for developers and providers.

This legislative initiative aims to bridge a critical regulatory void that has existed since Nigeria unveiled its draft national AI strategy in 2024. Proponents of the bill assert that this framework could profoundly influence the operational strategies of major technology companies, ranging from US-based giants like Google to prominent Asian cloud providers, especially as digital services continue their rapid expansion across Africa's most populous nation. Furthermore, the bill judiciously incorporates the establishment of regulatory sandboxes. These sandboxes are designed to enable local startups and institutions to safely test their AI systems under supervised conditions, thereby fostering innovation even as stringent oversight mechanisms are put into place.

While several other African nations, including Mauritius, Egypt, and Benin, have already published their respective AI strategies, very few have progressed towards developing enforceable legislation. Nigeria's proactive and risk-based model aligns with contemporary regulatory frameworks being adopted in regions such as Europe and parts of Asia, emphasizing core principles of transparency, fairness, and accountability throughout the entire AI life cycle. This positions Nigeria at the forefront of AI governance on the continent, potentially setting a precedent for future regulatory developments across Africa.