(Bloomberg) -- Nigeria is set to pass a law that would place it among the first African countries to regulate artificial intelligence, tightening oversight of one of the continent’s fastest-growing digital markets after years of largely unchecked expansion by global technology firms.

The National Digital Economy and E-Governance Bill would give regulators new powers over data, algorithms and digital platforms, filling a vacuum that has existed since Nigeria published its draft AI strategy in 2024.

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The bill, which lawmakers expect to approve by the end of March, would subject higher-risk AI systems — including those used in finance, public administration, surveillance and automated decision-making — to closer scrutiny, requiring developers to file annual impact assessments on risks, mitigation measures and performance.

The proposal also allows regulators to levy fines of as much as 10 million naira ($7,000) or 2% of an AI provider’s annual gross revenue from Nigeria. It doesn’t set out how penalties would be assessed.

Early Regulation

The legislation seeks to regulate AI early — rather than retroactively — as adoption accelerates across finance, public services and the private sector, Kashifu Abdullahi, director general of the National Information Technology Development Agency, said in an interview.

If passed, it would make Nigeria one of the first African nations to adopt an economy-wide regulatory regime for AI, Abdullahi said. Other countries, including Mauritius, Egypt and Benin, have AI strategies, but lack comprehensive legislation.

The law would also set ethical standards for transparency, fairness and accountability, and apply a risk-based approach similar to frameworks emerging in Europe and parts of Asia, potentially reshaping how companies from Google to Chinese cloud providers operate in Africa’s most-populous nation.

“In the area of governance, we need to put the safeguards and guardrails in place to make sure the AI we are building is within that guardrail,” Abdullahi said. “That way, if there are bad actors, you can easily detect and contain them.”

The proposed law also grants the regulator powers to demand information, issue enforcement directives and suspend or restrict AI systems deemed unsafe or non-compliant. The bill further provides for controlled AI environments where startups and institutions can test new technologies under regulatory supervision, in a bid to promote innovation.

“You cannot be ahead of innovation,” Abdullahi said, “but regulation is not just about giving commands. It’s about influencing market, economic and societal behavior so people can build AI for good.”

--With assistance from Julius Domoney.

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