Nigeria though a developing nation has experienced the massive growth of Artificial Intelligence [AI] in almost every industry. More particularly, AI is increasingly becoming embedded in Nigeria’s financial-services ecosystem, especially in fraud detection, customer onboarding, risk modelling and credit assessment.
While Nigeria has no standalone artificial intelligence statute, and with none in view to address the growing AI concerns especially as it pertains to people’s rights, the Nigeria Data Protection Act 2023 [NDPA], the NDPA General Application and Implementation Directive 2025 [GAID], and the FCCPC’s Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025 [“DEON Regulations”] serve as guides and regulators to the use of AI to limit the breach of people’s right and to ensure fairness especially fair lending in the financial eco-system.
AI deployment in high-impact sectors such as finance raises concerns relating to ethics, bias, transparency and privacy, and it is very important that a human-centred approach is adopted to ensure that AI systems are fair and accountable.
Sections.17, 18, & 163 of the Federal Competition and Consumer Protection Act [FCCPA] 2018 provides for the functions and Power of the Federal Competition and Consumer Protection Commission to make regulations to protect consumers’ interest and ensure market fairness.
The FCCPC have therefore established the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025 [DEON Regulations] to regulate AI-assisted lending including any lending to consumers either by way of cash, airtime, data, cashback, services, barter in exchange for specific or verifiable monetary value, wherever the transaction occurs by digital, electronic, online, or non-traditional means [Regulation 12 of the DEON Regulations].
Regulation 17 [a] of the DEON Regulations, 2025 provides that:
“17- To promote transparency and enhance disclosure practices in the provision of the Consumer Lending Services, the Lender/Service Provider shall ensure the following:
[a] that the terms of the Lending Service provided to the Consumer (including interest rates, repayment terms, and any associated fees) are fully disclosed to consumers before any transaction is completed, and that such terms are made available to the consumers in clear, legible and simple English Language comprehensible to the average consumer, and in such manner that shall not be misleading or deceptive;…”
Therefore, the unavailability of an AI legislation is not an excuse for unfair lending in the financial services eco-system.
Regulation 18 [a] of the DEON Regulations, 2025 further provides that:
“18- The Lenders/Service Providers shall comply with the following provisions to ensure the fair treatment of consumers-
[a] “treat each and every consumer equitably and fairly without discrimination, exploitation or bias…”
Therefore, while many financial services deploy the use of AI to ascertain the credit worthiness, they must ensure that it is not unfairly adopted to discredit prospective lenders.
The Regulations do not prohibit technological credit assessment. Infact, Regulation 19(i) expressly requires a lender, before granting credit, to “profile or assess the capability to repay in a sustainable manner” through proper credit assessment, due diligence and creditworthiness assessment.
However, this permission to assess creditworthiness is accompanied by a substantive consumer-protection constraint which is highlighted above in the provision of Regulation 18.
Consequently, an AI credit-scoring system cannot be treated merely as a technological tool whose output automatically determines the applicant’s fate. Its deployment remains subject to the lender’s underlying obligation of fair treatment.
This is particularly important because an AI model may derive a credit decision from large quantities of personal or behavioural data and identify statistical correlations which are not necessarily transparent to the applicant.
A model may therefore produce systematically different outcomes for particular groups even where discriminatory characteristics are not expressly included in the model. The legal concern is consequently not limited to whether the lender intentionally discriminated; it extends to whether the deployment of the system produces a prohibited discriminatory or biased outcome.
The GAID expressly addresses Artificial Intelligence as an “Emerging Technology”. Article 43 provides that a controller or processor deploying AI for processing personal data must consider the NDP Act, public policy and the GAID, and establish technical and organizational parameters for the processing. These parameters must take account of, among other matters, the right of a data subject not to be subject to a decision solely based on automated processes or algorithms, safeguards for vulnerable groups, and privacy by design and by default.
In conclusion, Fintech lenders should not regard an algorithmic decision as an unreviewable substitute for institutional responsibility. Where an applicant is rejected, the use of AI should not extinguish the consumer’s rights to transparency, fair treatment, complaint handling and appropriate redress. Equally, lenders should ensure that model
development, validation, deployment and monitoring are sufficiently documented to demonstrate compliance with applicable regulatory obligations.
Every acquisition begins with an attractive story. A thriving customer base, a recognisable brand, a strong balance sheet, a market position worth paying for. It can be genuinely persuasive, which is why it deserves a second look. What a seller presents is rarely the whole picture, and the gap between the story and the reality is where most acquisition regret is born.
Beneath the numbers, a business may be carrying unpaid taxes, unresolved lawsuits, undisclosed debts, property with questionable title, regulatory breaches, staff entitlements that were never settled, or intellectual property it uses freely but does not actually own. None of this usually appears in a pitch deck. It surfaces, if it surfaces at all, through due diligence.
Due diligence is simply the discipline of finding out what is actually being bought, legally, financially, commercially and from a regulatory standpoint, before the transaction closes. Done well, it comes down to one question worth sitting with: what exactly is this business, once the story is set aside?
In Nigeria, that question has grown more complex in recent years. Reforms to tax law, data protection, competition regulation and the capital markets mean that acquisition risk can now arise from several directions at once. The following considerations outline what a prospective buyer should examine.
Determine the Transaction Structure
Before any investigation begins, the structure of the proposed transaction must be clear. Is the buyer acquiring the company itself, its shares and everything that comes with them, or is it acquiring specific assets from the business?
The distinction carries real weight. In a share acquisition, the company retains its existing obligations, and the buyer takes on its full legal history. In an asset acquisition, the buyer can be more selective about what it takes on and, depending on structure, may leave certain liabilities behind with the seller. This decision shapes the entire due diligence exercise and should be settled at the outset rather than worked out afterwards.
Confirm Ownership and Control
A seller’s assurance that it owns the business is not sufficient on its own. Ownership should be verified against records held by the Corporate Affairs Commission [CAC], including incorporation documents, shareholding structure, share transfer history, registered charges and persons with significant control. Under the Companies and Allied Matters Act 2020, shares may only be transferred and registered in specific ways, and registration may be refused in defined circumstances. Where the documented position does not match what the buyer has been told, that discrepancy deserves further scrutiny.
Examine the Financial and Tax Position
A business can appear profitable while carrying substantial liabilities. Financial due diligence should extend beyond headline revenue figures to examine debts, guarantees, contingent liabilities and related party dealings.
Tax matters merit particular attention. With the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 now shaping the federal tax framework, buyers should review registration status, filing history, outstanding assessments, pending audits or disputes, and any incentives the business currently relies on. A clean set of accounts offers little comfort if an undisclosed tax exposure exists beneath them, since that exposure passes to the buyer the moment control changes hands.
Look Beyond Active Litigation
Pending litigation is straightforward to identify. The more difficult risks are those that have not yet crystallised into formal proceedings: a breached contract no counterparty has pursued, a regulator raising quiet concerns, an employee grievance that has not reached a tribunal. A thorough review should map not only current proceedings but the liabilities that could reasonably emerge after completion.
Verify the Target’s Assets
A business may list land, equipment, receivables, licences and inventory among its value, but ownership must be confirmed rather than assumed. This involves checking title to property, identifying mortgages or registered charges (which CAMA governs), and establishing whether key equipment is owned outright or subject to financing arrangements. If the purchase price reflects an asset, the seller must be able to demonstrate that it can actually transfer it.
Distinguish Ownership from Use of Intellectual Property
For many modern businesses, real value resides in the brand, the software or proprietary technology rather than in physical assets. Using an asset, however, is not the same as owning it. Buyers should examine trademark and patent registrations, copyright ownership under the Copyright Act 2022, and, importantly, whether intellectual property created by employees or external developers was properly assigned to the company. It is not unusual for a business to have built considerable value around technology that, on closer inspection, partly belongs to someone else.
Account for Employment Obligations
Employees carry obligations of their own: unpaid salaries, unresolved disciplinary matters, restrictive covenants and pension contributions among others. The Pension Reform Act 2014 sets minimum contribution requirements, and shortfalls in this area can accumulate quietly into a genuine liability. A workforce with unresolved entitlements is a workforce the buyer is about to inherit.
Review Material Contracts Closely
Many businesses depend on a small number of critical relationships: a major customer, a key supplier, a lease, a financing facility. These contracts should be examined for how they treat change of control, assignment and termination. A customer or lender may hold the right to withdraw, or to renegotiate terms, the moment ownership changes. Discovering this after signing is considerably more costly than discovering it beforehand.
Consider the Regulatory and Competition Landscape
Different sectors carry different licensing requirements, and not every licence transfers automatically with a change in ownership. Separately, the Federal Competition and Consumer Protection Commission has stated, as recently as April 2026, that qualifying transactions must be notified for prior review and approval before implementation. Where a public company or capital markets element is involved, the Investments and Securities Act 2025 may also apply. These are not procedural afterthoughts; they can determine the entire transaction timetable.
Treat Data Protection as a Deal Issue
Where the target holds customer or employee data, the buyer is inheriting responsibility for how that data has been managed. Under the Nigeria Data Protection Act 2023, buyers should examine what categories of data are processed, the legal basis relied upon, the security measures in place and any history of breaches. A data protection weakness rarely stays contained; it can lead to regulatory action and reputational harm well after completion.
A Problem Discovered Is Not a Reason to Abandon the Deal
Finding an issue during due diligence does not automatically mean walking away; it means the buyer now has leverage. Price can be renegotiated, the seller can be required to resolve the problem before completion, specific indemnities or warranties can be sought, funds can be held in escrow, or the affected asset can be excluded from the transaction. The purpose of due diligence is to allow these decisions before the risk becomes the buyer’s problem.
The Central Point
The most useful question in any acquisition is not simply how much the business costs. It is what exactly is being acquired, what liabilities accompany it, and what protection is needed before completion. A properly conducted due diligence process, one that feeds directly into how the transaction documents are drafted, is what turns those questions into answers and a risky purchase into an informed one.
Engaging experienced legal advisers early in the process does not delay a transaction. It ensures that the agreement ultimately signed reflects the business actually being acquired.
This second part of the video articles on intellectual property law highlights IP as it related to Nigeria’s Real Economy.
What is real economy sector?, Examples of real economy, Significance of IP in real sector: Innovation Protection, Competitive Edge, Legal Security, Attracting Investment, Revenue Generation and Fostering Innovation Culture.
This second part of the video articles on intellectual property law highlights IP as it related to Nigeria’s Real Economy.
What is real economy sector?, Examples of real economy, Significance of IP in real sector: Innovation Protection, Competitive Edge, Legal Security, Attracting Investment, Revenue Generation and Fostering Innovation Culture.
This first part of video articles on intellectual property law explains in simple terms the following:
What is intellectual property?, Intellectual property rights, Importance of Intellectual Property Types of Intellectual Property, Intellectual Property Laws in Nigeria, Role of Lawyers in Securing Intellectual Property, Challenges in IP Protection.
SECTION 134 (1) of the 1999 CONSTITUTION provides that in order to be declared the winner of an election, a candidate running for the office of the President of Nigeria must:
a. Have majority of the votes cast in the election; and b. He has not less than one-quarter of the votes [25%] cast in each of at least two-third of all States of the Federation [24 States] and the Federal Capital Territory, Abuja.
The 2023 General Federal Elections conducted on the 25th of February 2023, resulted in Asiwaju Bola Ahmed Tinubu, the Presidential Candidate of the All Progressive Congress as the winner of the election. However, the results as released by the Independent Electoral Commission [INEC] shows that he was not able to win up to 25% of the votes cast in the F.C.T. This has led to a debate on whether or not, he should be declared the winner, going by the interpretation of Section 134 (b) of the Constitution. There are 2 schools of thought on this:
1. A candidate needs to score 25% of the total votes in 24 States including the F.C.T. 2. A candidate needs to score 25% of the total votes in 24 States and 25% in the F.C.T too.
Section 6 of the Constitution establishes the Judiciary as the machinery charged with the interpretation of laws. Hence the Supreme Court, being the Apex Court is burdened with this enormous responsibility. In the celebrated decision of Awolowo v. Shagari [1979] Sc 62/1979, the locus classicus which establishes the use of Literal Rule in interpretation of statutes, the Supreme Court held that laws should be given their literal interpretation, especially where there is no ambiguity of any kind.
“When interpreting statutory provisions, it is correct, as submitted by learned counsel for the appellant, that the words used must be given their natural and ordinary meaning except where, to do so would lead to absurdity.”
However, in this instance, the words of the Constitution, though look simple, are quite capable of two different interpretations. As we all know, simple punctuations can render several meanings to a sentence. In the same vein, a statute can be drafted in such a way that it is capable of having different meanings. In such a situation, what should the Courts do? In the same Awolowo v. Shagari, the Court said:
It is also relevant, we think, to point out that anybody called upon to interpret any kind of statute should not, for any reason, attach to its statutory provision, a meaning which the words of the statute cannot reasonably bear. If the words used are capable of more than one meaning, then the person interpreting the statute can choose between these meanings, but beyond that he must not go…. “Judges are not called upon to apply their opinions of sound policy so as to modify the plain meaning of statutory words, but where, in construing general words the meaning of which is not entirely plain there are adequate reasons for doubting whether the legislature could have been intending so wide an interpretation as would disregard fundamental principles, then we may be justified in adopting a narrower construction.“
The Court was basically saying whenever a provision is capable of having two meanings, it would resort to picking one in so far as it is not going beyond both of them.
Furthermore, in a plethora of cases, the Courts have said that the intention of the draftsmen should be considered while interpreting laws, hence, a statutory provision is not given a wrong meaning. The Court of Appeal in P.D.P V. Edevbie [2022] Lpelr-58656 [CA], relying on Saraki V. F.R.N [2016] 3 Nwlr [Part 1500] Page 531, stated that the main object of statutory interpretation is to discover the intention of the lawmaker, which is to be deduced from the language used. But, the question is, how can we truly know and decipher their intentions especially in this particular situation?
The interpretation of Section 134 would have been so much easier if it used the word “including” rather than “and”. In this way, the meaning would be the candidate scoring 25% of the votes in 24 states including the FCT; thereby counting the FCT as the 37th State. But, it does not. Hence, this is subject to an alternative interpretation.
The buck stops at the desk of the Supreme Court. It can elect any of the possible meanings of Section 134 and it would be deemed right. This is because the plain interpretation of the Constitution can result to more than one meaning and in such scenario, the Court is enjoined to make a choice as long as it does not go beyond the possible meanings.
As said earlier, the Supreme Court has a heavy duty to discharge here. English Language is the latest hard nut the Court must crack. A battle of interpretation. Indeed, it is Grammar versus the Gavel.
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The objective of every organized society’s government is to provide fundamental social amenities such as adequate roads, health, and security of people and property, amongst others. It is without any doubt that the government needs money to facilitate the provision of these services and taxation is the mainstay of government revenue. The law makes it compulsory for everyone to pay tax and even provides penalties for non-compliance. The payment of tax in Nigeria is backed by Section 24[f] of the 1999 Constitution of Federal Nigeria [as amended]. It provides that: “It shall be the duty of every citizen to – declare his income honestly to appropriate and lawful agencies and pay his tax promptly.”
The court in the case of Independent Television/Radio v. E.S.B.I.R. [2015] 12 NWLR [Pt. 1474] 442 reiterated the constitutional duty of a citizen to pay tax. It stated that: “Failure of the citizen to pay tax shall strip him of the protection afforded by section 44[1] of the Constitution.”
In Nigeria, the power of the government to impose taxes is statutory and must be anchored on the law. There are sundry legislations in Nigeria of which the major ones are the Personal Income Tax Act, Company’s Income Tax Act, and The Federal Inland Revenue Service Act, amongst others
TAX AVOIDANCE
The 8th Edition of the Black’s Law Dictionary defined Tax Avoidance as “the act of taking advantage of legally available tax-planning opportunities in order to minimize one’s tax liability.” It is a lawful means of altering a person’s taxable income in order to reduce the amount of tax owed. It is usually achieved by claiming tax deductions, tax credits, and positioning for tax incentives. By and large, tax avoidance occurs in a situation where the taxpayer arranges his financial affairs in a manner that would make him pay the least possible amount of tax without infringing the legal rules.
TAX EVASION
This is the unlawful means of concealing taxable income from tax authorities, so as not to remit taxes. It has also been interpreted to mean an illegal practice where a person, organization, or corporation deliberately evades paying their authentic tax liability by deliberately not declaring all taxable income. Some instances of tax evasion are:
False declaration of one’s financial status.
Failure to render tax returns as appropriate.
In Independent Television/Radio v. E.S.B.I.R. [2015] 12 NWLR [Pt. 1474] 442 where the taxpayer failed to render tax returns to the relevant tax authority, the court held that was “a despicable way for any taxpayer to act and it is seriously detrimental to the development of any nation.”
LEGAL DIMENSION OF TAX AVOIDANCE AND TAX EVASION
Legislators and tax authorities are very well aware of the way taxpayers seeks to avoid or evade taxes. Therefore, tax legislation and enforcement technique continue to evolve to prevent tax evasion and to ensure tax-avoidance techniques are based on real and reasonable economic activities. Here are some legal measures put in place to prevent tax evasion:
1. Imposition of Sanction: Judicial decisions have recognized deterrence as one of the goals of imposing sanctions. Without the imposition of sanctions for non-compliance with the tax laws, there would be no duty, but an admonition, to pay taxes. It is important to stress that Section 40 of the Federal Inland Revenue Service Act makes tax evasion illegal in Nigeria. Furthermore, obstructing or assaulting any authorized tax officer in the exercise of his responsibilities is a criminal offense under Section 41 of the Act. Any of these infractions attracts a fine or an imprisonment term of three years or both.
2. Tax Audit and Investigation: The law permits tax authorities to conduct tax audits and tax investigations of taxpayers.
3. Deduction at Source: There are two main methods of deducting taxes at source, the Pay-As-You-Earn scheme [PAYE] and the Withholding Tax method. Withholding tax is not a form of tax, but a method of collecting taxes in advance.
4. Reporting and Penalties: Reporting obligations on a controlled transaction or across the N300,000,000 thresholds. Failure to file the necessary disclosure or declaration forms attracts different monetary penalties.
5. The enactment and amendments of existing laws: With the enactment of the new Finance act, it is hoped that these new provisions will bring a lot of changes in the tax administration system.
CONCLUSION
The importance of tax to a nation cannot be overemphasized. It is one of the veritable ways by which the government funds its budget and in Nigeria currently, taxation is one sure way for the government to generate revenue. However, it is rare to find a taxpayer who willingly pays their taxes, and the law is very well aware of that. Hence, legal and regulatory measures are put in place to ensure that any advantages to be gained by a taxpayer over the tax authorities are not artificially induced or illegally procured. While reasons may be advanced to justify avoiding and evading taxes, there is no doubt that in both cases, the government whose anticipated revenue reduces suffers the loss which in turn passes to taxpayers through the increase in tax rates and creation of new forms of taxes.
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