Nigeria’s legislative process continues to see a flurry of new bills aimed at formally regulating the country’s rapidly growing technology and green mobility sector.
There is a lot of activity going on in artificial intelligence (AI), fintech, electric vehicles, and more. While the government’s intention to monitor and encourage local industry is clear, the proposals have evoked mixed feelings of optimism and concern among industry experts concerned about the potential complications.
AI’s new gatekeeper
Nigeria is taking a major step towards regulating artificial intelligence with a new bill that will require registration and licensing of AI developers and users. The proposed law aims to establish a National Artificial Intelligence Council to serve as the highest regulatory authority.
This council will have the power to manage, supervise and approve all AI-related activities in the country. It would issue guidelines, set standards and enforce compliance. A key part of the bill is a risk-based system, meaning that AI used in sensitive areas such as healthcare and finance will face stricter rules.
The bill also addresses ethical issues. AI systems are required to be safe and fair. If an AI is going to make a decision that has a significant impact on someone, such as hiring or credit scoring, that person needs to be informed that they are interacting with an AI. They should also have a way to appeal the decision.
But some people are cautious. Defining too broadly what constitutes an AI system can inadvertently insert many fundamental digital tools into complex regulatory webs. There are also concerns that the registration process can become a bureaucratic hurdle, especially for startups with limited resources.
Possible new ruler of fintech causes disruption
In the financial technology sector, a bill has been proposed to create a National FinTech Regulatory Commission (NFRC). The idea is to have a single authority overseeing all fintech activities, which supporters argue could simplify the current fragmentation.
Dr. Austin Okpagu, country director at cross-border payments fintech Verto, sees potential in this idea. He said a unified regulator could be very beneficial if designed to consolidate existing supervisory functions.
“In my view, the proposed National FinTech Regulatory Commission could be highly beneficial if designed as a single harmonized body that consolidates existing oversight functions,” opines Dr. Okpagu.
“If the Commission simply adds another layer on top of the existing structure without clear integration, it risks creating complexity and delaying market entry.”
He also pointed to an even bigger opportunity. Such a board could enable regulatory passporting, allowing fintechs licensed in Nigeria to seamlessly operate in other African markets.
However, the proposal has faced pushback. A key point of contention is that the Central Bank of Nigeria (CBN) already performs most of the functions the new committee wants to take over. The CBN already licenses and supervises payment service providers and sets rules on consumer protection and fraud.
Critics say the bill was proposed by Prime Minister Boris Johnson. Faadh Kayode Laguda, I feel like you are in a hurry. Tech analyst Olumuyiwa Olowogboyega noted that the bill appears to be a copy-paste of the Telecommunications Act and includes a strange reference to fintechs paying for spectrum, a radio frequency concept rather than financial services.
One section states that even if you already have a license from the CBN, you cannot provide any kind of fintech services without a license from the new commission. This raises concerns about overlapping regulations and potential turf wars, which could confuse the industry rather than provide clarity.
Electric vehicle bill with big fines and big ambitions
Meanwhile, the Nigerian Senate is moving forward with the Electric Vehicle Transition Bill and the Green Mobility Bill. The proposed law is one of the most comprehensive in Africa and focuses on building local manufacturing.
The bill includes ambitious local content regulations. The bill requires foreign automakers to partner with Nigerian assemblers and source at least 30% of vehicle parts locally by 2030. Additionally, an assembly plant must be established within three years of the start of operations.
Sam Farai, CEO of SAGLEV, Nigeria’s only large-scale electric vehicle assembler, strongly supports the bill. He called this “at least 30 years behind the times,” explaining that Nigeria once had a thriving automobile assembly industry, but it has since collapsed. “All the imported used cars are taking value out of the economy instead of creating jobs here,” he says.
The most controversial part of the bill is the hefty fine of 500 million naira per shipment for unlicensed importers. Some worry that such large fines could discourage startups and stifle innovation before the industry matures. Others disagree, arguing that fines are a necessary deterrent to encourage players to invest locally rather than cut corners.
The bill also mandates the installation of EV charging points at all petrol stations in Nigeria. Although it’s a bold idea, experts question its feasibility given the unreliability of the country’s power grid.
A common concern with all three bills is the potential for regulatory duplication and bureaucratic complexity. The AI bill risks clashing with existing agencies such as the National Information Technology Development Authority. The fintech bill directly overlaps with central banks. Since multiple government agencies are responsible for oversight of the EV bill, implementation may be delayed.
The next few months will be critical as these bills are debated. While the government’s ambition to guide and develop these key sectors is clear, serious concerns remain that Nigeria is choking the very sectors it aims to grow.
Featured image credit: Stockholm Freedom Center
