Overview:
National Focus: Government Digital Economy/Growth/Transformation Plans or Strategies
With a population of over 220 million, Nigeria accounts for roughly half of West Africa’s population. It has one of the largest demographics of youth in the world and is estimated to become the third-most-populous nation on the planet in the coming decades. The Nigerian Bureau of Statistics (NBS) reports that the Information and Communications Technology (ICT) sector contributed about 20 percent growth to Nigeria’s real Gross Domestic Product (GDP) in Q2 2024. The expansion of the digital technology industry in recent years demonstrates the strong potential to serve as a catalyst for economic growth especially as the Government of Nigeria seeks to diversify Nigeria’s economy away from reliance on the oil and gas industry, traditionally the mainstay of the economy.
The Government of Nigeria recently released the National Digital Economy Policy and Strategy 2020-2030 document, which seeks to reorient the Nigerian economy to capitalize on the numerous opportunities that digital technology offers. This strategy intends to leverage digital technology to drive growth in every segment of the economy. Nigeria’s Digital Economy Policy and Strategy program is based on eight pillars: Developmental Regulation; Digital Literacy and Skills; Solid Infrastructure; Service Infrastructure; Digital Services Development and Promotion; Soft Infrastructure; Digital Society and Emerging Technologies; and Indigenous Content Development and Adoption.
Digital upskilling of local Nigerian talent is a priority for both the United States and Nigerian governments, in collaboration with the private sector. Major U.S. technology firms have launched their own training programs. For example, in 2021 Microsoft entered into a national partnership with the Nigeria government to train five million youth across the country in technical skills. Google participated in several programs in Nigeria, including the Google Africa Developer Scholarship program, which provides training in mobile and web development. Google also offers digital skills training to young Nigerians, equipping them with the tools they need to flourish in the digital age. There is also the Digital Skills for Africa program, which is larger and aims to provide important digital skills. The program provides free training in internet marketing, web design, and data analytics. In May 2023, Cisco signed a deal with Nigeria’s National Information Technology Development Agency (NITDA) to bridge Nigeria’s digital divide and launched a new EDGE (Experience Design Go-to-market Earn) Center in Lagos that provides incubation programs for SMEs. The Cisco Network Academy, which is available at over 200 Nigerian tertiary institutions, has helped over 200,000 people improve their skills.
Projected Digital Economy Growth (identifiable trends, competitive environment, major players)
Though the oil/gas and agricultural sectors contribute much of Nigeria’s revenue, the ICT industry has remained buoyant despite recent economic volatility, as it benefitted from medium- and long-term economic development policies accentuating investments in infrastructure by telecom operators (Telcos). Nigeria has Africa’s largest mobile market, with about 219 million subscribers, as recently announced by the Nigerian Communications Commission (NCC), achieving a teledensity of 101.16%. As of March 2024, more than 163 million Nigerians had internet access because of the growth of broadband mobile networks, the launch of affordable data plans, and a broadband penetration of 43.5 percent. Nigeria’s major ICT players comprise four activities: Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording, and Music Production; and Broadcasting.
The NBS reports that the telecom industry was the third-largest contributor to real GDP in Q2 2024, following agricultural production and trading industries, which generated 20.35% and 16.39%, respectively. Within the country’s digital economy space, the telecom industry, dominated by mobile network operators including MTN, Globacom, Airtel, 9mobile, as well as other Internet Service Providers (ISPs) serves to stimulate activities in every other area of the economy.
Nigeria has four major players in the GSM category: MTN, Globacom, Airtel, and 9mobile. MTN is the largest mobile operator in the country in terms of the number of users, with a market share of 37.35%, followed by Airtel (28.93%), Globacom (28.40%) and 9mobile (5.32%). The buoyancy of Nigeria’s mobile telecommunications industry has been spurred by the country’s large population thereby making the ICT sector a much-needed boost for an economy that is overweighted towards oil revenues.
Other international power players active in Nigeria give U.S. technology companies stiff competition in the Nigerian market. For example, the Nigerian Federal Ministry of Information and National Orientation in 2022 reported that the Government of Nigeria had signed a Memorandum of Understanding with China’s Huawei on an “ICT for Change” Training Program to provide capacity building for Nigerian youth and federal civil servants. The Japan International Cooperation Agency (JICA) has also launched the JICA-Nigeria ICT Program, in which JICA works with Nigerian government entities to offer ICT training and technical assistance. This includes capacity-building initiatives designed to improve the ICT abilities of public sector staff.
The Nigerian digital ecosystem also plays host to the EU-Nigeria Digital Economy Package (2021-2024). Under the Global Gateway program, the EU announced it would invest at least €820 million in Nigeria’s digital transformation by providing assistance for Nigeria’s digitization plan through a mix of €160 million in grants and €660 million in loans. This assistance includes investments in digital infrastructure, the digitalization of public services, digital entrepreneurship, digital skills, and digital governance.
These collaborations are part of the Nigerian government’s broader endeavor to capitalize on foreign experience and resources to establish a strong digital economy, which is viewed as critical to the country’s economic growth and global competitiveness.
Market Challenges
Regulatory environment
Data privacy. The Nigeria Data Protection Regulation (NDPR), enacted by the National Information Technology Development Agency (NITDA) in 2019, serves as the primary regulatory framework for data privacy. U.S. companies operating in Nigeria must comply with these requirements and regulations. The rule applies to all Nigerian citizens and residents, as well as companies that process personal data in Nigeria or on behalf of Nigerian citizens and residents, regardless of location. The essential requirements include consent, data subject rights, breach notification, data protection officers, and cross-border data transfers. A lack of clarity around the enforcement of and compliance with data protection regulations in Nigeria may create market challenges for U.S. companies.
Data localization
The Nigeria Data Protection Regulation (NDPR) does not establish strict criteria for data localization, but it does set guidelines for how personal data should be processed and handled, which may indirectly promote data localization. The NDPR allows for cross-border data transfers and recognizes tools to facilitate data transfers such as, Standard Contractual Clauses (SCCs), Binding Corporate Rules (BCRs), Certifications, and Codes-of-Conduct. However, the NDPR does include robust consent requirements, which include data being freely offered, the subject being aware and informed, the objective and intent being indicated, and the ability of the subject to withdraw consent. The NDPR encourages local data hosting, especially for government and critical national data.
Cybersecurity
Cybersecurity regulation in Nigeria is becoming increasingly important as the country embraces digital technology and faces rising cyber threats. The Nigerian government has enacted various legislation and policies to improve cybersecurity, safeguard key infrastructure, and ensure the security of digital transactions. There is, for example, the Cybercrimes (Prohibition, Prevention, etc.) Act of 2015 and the National Cybersecurity Policy and Strategy (NCPS) 2021. Vital government entities who provide cybersecurity guidelines include the Central Bank of Nigeria (CBN) for banking and financial services, the Nigerian Communications Commission (NCC) for telecommunications and internet services, and the Office of the National Security Adviser (ONSA).
Standards development
The Standards Organization of Nigeria (SON) is the country’s national standardization, quality assurance, and certification authority. The agency’s primary responsibilities include standards development, certification, quality assurance, and metrology. SON’s operations encompass all industries, including sector-specific standards in ICT, energy and the environment, agriculture and food, and manufacturing. The agency has been hampered by logistical challenges, proliferation of counterfeited products and inadequate resources.
Market entry
U.S. investors interested in Nigeria’s digital economy can find success, especially given the country’s remarkable list of possible partners/resellers, tech talent, and distributors. However, finding the right partners can be difficult, and any market-entry strategy should include face-to-face meetings, as Nigerians value personal relationship building. Partnerships with local distribution/reseller firms are the most dependable way to enter the industry. Major distributors have outlets with countrywide reach and a huge network of merchants, which help to speed market coverage.
Public sector procurement
Nigeria is not a signatory to the World Trade Organization (WTO) Agreement on Government Procurement. Foreign companies incorporated in Nigeria receive national treatment in government procurement. Government tenders are published in local newspapers and a tender’s journal is sold at local newspaper outlets. The Bureau of Public Procurement (BPP) is the regulatory agency in charge of Nigerian public procurement, established by the Public Procurement Act of 2007. The BPP generates specific rules and guidance to enforce the Public Procurement Act. Its tasks also include creating procurement regulations, issuing recommendations, and ensuring compliance with the Act. These include the Standard Bidding Documents, the Procurement Procedures Manual, and guidelines for various procurement procedures. The Public Procurement Act of 2007 established the Bureau of Public Procurement (BPP) as the regulatory authority responsible for the monitoring and oversight of public procurement in Nigeria. However, Nigerian Government agencies do not always follow procurement guidelines, despite the requirement that no procurement proceedings be formalized until the procuring entity has ensured that funds are available to meet the obligations and has obtained a “Certificate of ‘No Objection’ to Contract Award” from the BPP. Although U.S. companies have won contracts in many sectors, difficulties in receiving payment are common and can discourage firms from bidding.
Digital Trade Barriers
Technology barriers
A stable supply of power is one of the biggest challenges for many investments in Nigeria. As a workaround, investors may consider establishing a growing partnership with a local power distribution company and/or building a captive power solution. Many users must rely on their own diesel generators, which can be costly especially in running data centers and in other tech-related industries.
Policy and regulatory changes also form barriers for technology investments. The Government of Nigeria periodically reviews and adjusts policies that had been established by current or previous administrations. In addition to creating compliance challenges, this may lead to higher production costs and disrupt supply chains. According to the 2024 National Trade Estimate, Nigeria’s National Information Technology Development Agency (NITDA) Guidelines require information and communications technology companies to use Nigerian businesses for the provision of at least 80 percent of all value-added services on their networks. These NITDA Guidelines define “value-added service” vaguely, creating uncertainty for businesses seeking to comply with the measure. Though the NITDA Guidelines seem rarely to be enforced, periodic threats of repercussions for non-compliance remain a concern.
Digital Trade Opportunities
Artificial Intelligence
In August 2024, the Nigerian Minister of Communications, Innovation and Digital Economy Bosun Tijani released the draft of the country’s National Artificial Intelligence Strategy (NAIS) document with the aim of achieving ethical use of AI for national development. U.S. tech companies had the opportunity to help develop and provide input into the strategy during its drafting. According to the NAIS, the country has some of the most unique and compelling issues and possibilities that AI can solve, from optimizing agriculture in various climates to strengthening public health infrastructure. It is anticipated, however, that adopting a domestic AI strategy that provides Nigeria with a clear path for AI application will catalyze relevant innovation and help to rebalance power structures. The Government of Nigeria recognizes that developing a national AI plan is a significant, strategic undertaking that spans the entire value chain, including socio-economic levers. The draft NAIS strategy notes that the national AI ecosystem is designed to align with the country’s strategic priorities, strengths, and weaknesses and with core advantages and assets that can be leveraged at the national and international levels. Also, the strategy prioritizes addressing the challenges of developing and deploying local AI solutions in Nigeria, including improving public education, developing a robust data ecosystem, and fostering public ownership for shared prosperity. The public review period for the NAIS closed on August 27, after which the Federal Executive Council to review and officialize the strategy.
Internet access, 5G and 6G, sub-sea cables
The Nigerian Communications Commission (NCC) has awarded 5G operational licenses to selected telecommunication companies - MTN, Mafab Communications, and Airtel. Licensees have started to roll out 5G services in selected locations. Deploying 5G across major cities in Nigeria requires investments in infrastructure, including the installation of multiple small cell sites, fiber optic connections, and base stations. Nigeria’s current telecommunications infrastructure outlay requires substantial improvement to enable nationwide 5G service. Nigeria is linked to many major undersea cables that connect it to Europe, the Americas, and other regions of Africa. This includes the SAT3 cable, WACS cable, MainOne cable, Glo1 cable, Equino (Google), and ACE cable.
While there have been local initiatives to boost the digital economy, U.S. technology companies operating in Nigeria have also played a crucial role in expanding the nation’s access to reliable and secure internet and fostered inclusive participation in the digital economy. Part of the initiatives by the Government of Nigeria has been the 3 Million Tech Talent (3MTT) program launched in October 2023, which aims to equip three million Nigerians with technical and programming skills, and has successfully completed the first phase, training 30,000 people. Two other opportunities include the “774 Local Government Areas (LGAs) Connectivity” and “Fiber Forward” infrastructure projects, launched in February and June 2024 respectively, with the goal of linking all state and local government facilities to the internet and laying 90,000 kilometers of fiber optic infrastructure throughout the country.
Specific Industry Sub-sectors:
Cloud Computing and Data Centers
Significant opportunities remain as cloud adoption rates in Nigeria lag due to an unclear local regulatory environment, questions of data sovereignty, and misconceptions about the U.S. Cloud Act. Cloud computing and data centers are growing rapidly with the government committed to building a digital economy. Investors in Nigeria’s cloud services are expected to compete favorably as commercial data centers prove to be critical to the growth of the country’s digital economy. The emergent increase in the number of open access and high-capacity subsea cables supplying fiber optic networks to the country is helping to fuel investments in this area. Most enterprise-grade data centers have reported attaining Tier III and Tier IV certification. Opportunities for prospective U.S. investors include direct investment (build and operate), partnerships, and equipment sales/deployment.
Financial Technologies
Fintech has emerged as one of Nigeria’s most active areas, causing substantial changes in delivery and access to financial services. The value chain includes digital payments, digital banking, point of sales (POS) services, lending platforms, asset/wealth management, insurance services, etc. Given Nigeria’s diverse demographics, financial inclusion of millions of unbanked and underbanked Nigerians, particularly in rural areas, has been one of the most significant benefits of Fintech’s rise in Nigeria. Other benefits include increased innovation and entrepreneurship, as well as numerous opportunities to provide solutions to cross-border payment issues.
Cybersecurity
Cybersecurity in Nigeria has continued to develop around major catalysts including the proliferation of internet usage, the availability of mobile banking and FinTech services, and ecommerce. The outlook for the country’s cyber-marketspace is bullish because of the ever-increasing scope of online banking, ecommerce, and online education, among others. The sector is expected to reach over $270m by the end of 2024. Nigeria’s 20 commercial banks and hundreds of microfinance institutions as well as FinTech organizations attribute about $500m in losses annually to cybercrime. This sector creates a haven for cyberthreats and attacks, so there is a strong market demand for robust cybersecurity solutions.
Internet of Things (IoT) and Smart Cities
The prospects of developing smart cities in Nigeria is gaining more traction as both private and public sector stakeholders work towards achieving connected spaces driven by the Internet of Things. The major backbone for the country’s smart city potential lies in the growing fiber optic and broadband market and the continued expansion of Nigeria’s international undersea cable system. There is huge potential in the country’s real estate development, especially in selected anchor cities such as Lagos, Abuja, Port Harcourt, and others. Lagos, for example, is developing the Eko Atlantic city that is expected to be largely technology-driven, with an improved transportation network, a modern healthcare delivery service, improved safety and security, and a smaller environmental impact, among other improvements.
Payment Service Banks (PSBs)
The Central Bank of Nigeria (CBN) has issued mobile banking licenses to the country’s major telecom companies enabling them to operate as payment service banks (PSBs). The mobile network operators (MNOs) are expected to use their extensive networks in facilitating mobile payments which is particularly vital in Nigeria, where 90 percent of businesses are small and medium-sized enterprises (SMEs) that account for 80 to 90 percent of all customer-to-business (C2B) payments. Following this development, there has been notable improvement in the FinTech sector as the MNOs are able to operate and reach those without traditional access to banking services. MTN Nigeria has Momo PSB and Airtel has SmartCash PSB, with Globacom owning Moneymaster PSB and 9Mobile has 9PSB. This has resulting in diversified revenue generation and employment creation, as well as the expansion of mobile financial services to a larger customer base.
Digital Health Services
In March 2024, Nigeria’s Minister of State for Health and Social Welfare inaugurated the Nigeria Digital Health Initiative (NDHI) implementation committee to help midwife data policy regulation, repository management and serve as an ombudsman to establish the digital health architecture. The committee is chaired by the Minister of Health and comprises a diverse group of individuals with extensive experience and pertinent skills in digital health, cybersecurity, ICT, healthcare administration and operations. The NDHI aims to integrate digital technologies into a cohesive system that enhances healthcare delivery across Nigeria. Its key components include the widespread adoption of electronic medical records (EMR), the establishment of a national health information exchange (HIE), and the promotion of digital health literacy. This initiative is a collaborative effort involving the Ministry of Health & Social Welfare, healthcare providers, and stakeholders (public and private) across Nigeria. By consolidating patient information and facilitating seamless data exchange, the health ministry plans to create a unified healthcare system that benefits everyone. There is significant opportunity in the delivery of digital health services (telehealth) especially to rural areas where traditional medical services are harder to deliver. Additionally, digital health services in the diagnostics and screening sub-sectors are in high demand. U.S. and international companies are positioned to fill in gaps where local testing is not available or severely lacking.
Digital Economy-related trade events
- IOT West Africa Conference & Exhibition 2024, Lagos (May 13-15, 2025)
- Lagos Startup Week (July, 2025)
- Digital Africa Conference & Exhibition, Abuja (September 3-4, 2024)
- Nigerian Fintech Week (October 8-10, 2024)
- Art of Technology Lagos (December 4-5, 2024)