AI in Business: What Nigerian Companies Must Know About Data and Ethics Laws

If you walk into any Nigerian office today, whether it’s a tech hub in Yaba, a law firm in Abuja, or even a small bakery in Ilorin, you’ll hear somebody saying, “Abeg, ask AI to draft it jare.”

AI has quietly become the new unpaid intern. But as sweet as these tools are, many business owners don’t realise that the same AI they rely on can put them on the wrong side of Nigerian data protection rules. Imagine yourself running a logistics outfit found this out the hard way when a foreign AI chatbot you used for customer replies accidentally leaked part of your client database. Even if nobody sue him, the panic alone is enough to humbled you.

So before your business dives deeper, here’s the honest, simplified version of what Nigerian companies must know.

1. Nigerian Data Protection Law Is Now Serious Business

The Nigeria Data Protection Act (NDPA 2023) is no longer silent theory, companies have actually started receiving compliance warnings.

If your business uses AI for any of these:

• analysing customer behaviour
• storing personal data
• generating automated emails
• processing payments
• employee performance tracking

…then, whether you like it or not, you are handling personal data, and NDPA rules follow you everywhere you go.

The main expectations are simple:

• Get consent before feeding people’s info into AI tools.
• Tell people what tool you’re using and why.
• Don’t store unnecessary personal data “for later.”
• Don’t send data to foreign AI services you can’t control.

If your AI tool is hosted outside Nigeria (which most are), you must ensure the country has adequate data protection standards. Failure can lead to fines that genuinely hurt.

2. AI Can Discriminate, And the Law Will Hold Your Business Responsible

This is the part many CEOs overlook.

If your AI tool rejects job applicants, ranks customers, recommends pricing, or approves/declines credit, you must ensure zero discrimination based on ethnicity, gender, age, disability, or religion.

Even if the AI did it by mistake, your business will still be the one to explain. For instance, a fintech founder recently complained online that his automated loan model was “behaving like it has tribalism.” The joke went viral, but behind the humour is the real risk: algorithmic bias is a legal and reputational bomb.

Before deploying any AI decision-making, Nigerian businesses must:

• Review outputs manually
• Keep records of decisions
• Offer customers a way to appeal automated decisions
• Avoid “AI-only” final decisions on sensitive matters

The NDPA actually calls this Automated Decision-Making (ADM), and it’s regulated.

3. Transparency Is Now a Legal Expectation, Not a Favour

Many businesses hide the fact that AI is doing the work. But the law says you must inform people if:

• AI is interacting with them
• AI is making decisions that affect them
• Their data is being analysed automatically

For example, if you use AI to screen CVs, your job advert should mention that an automated system is part of the process. It sounds small, but regulators take these things seriously now.

Customers, too, are becoming sharper. One guy recently blasted a bank on Twitter, claiming their “AI” declined his request without explanation. Whether true or not, the narrative stuck because the process wasn’t transparent.

4. Don’t Feed AI Sensitive Information, It Never Forgets

Most AI tools store and reuse training data. That means if you casually paste:

• employee records
• customer complaints
• BVNs
• medical or financial histories
• internal memos

…you may be feeding confidential information into a global model that will never forget it.

The simple rule many Nigerian companies now follow:

If you can’t paste it on a public billboard, don’t paste it into AI.

5. Ethical AI Isn’t Just Law, It’s Good Business

The truth is, ethical AI doesn’t slow you down. It protects you. Businesses that use AI responsibly tend to:

• gain customer trust
• avoid embarrassing data leaks
• reduce compliance risks
• make better decisions
• scale faster with fewer scandals

CONCLUSION

AI is no longer the future, it’s the present reality for Nigerian businesses. But the more we embrace it, the more we must pay attention to data rights, transparency, and ethical use.

Your business doesn’t need to fear AI; you only need to use it with sense and compliance.

The companies that do this right will be the ones customers trust the most in this new digital era.