Pavestones Newsletters – Page 4

USE OF EMERGING TECHNOLOGIES IN DATA PROCESSING: LEGAL AND REGULATORY CONSIDERATIONS IN NIGERIA

January 16, 2026/in Pavestones Newsletters /by Pavestones Legal

BY ADERONKE ALEX-ADEDIPE AND PROMISE ITAH

Introduction

Businesses are increasingly adopting the use of Emerging Technologies to improve efficiency and decision-making. While these technologies offer clear commercial benefits, they also involve the processing of Personal Data and therefore raise important legal and regulatory considerations.

This newsletter outlines key legal and regulatory issues businesses should consider when using Emerging Technologies to process Personal Data in Nigeria.

What Are Emerging Technologies?

Emerging Technologies are new or fast-developing digital tools that change how organisations collect, store, analyse, and use data. In the context of data processing, common examples include:

Artificial intelligence (AI) and machine learning – systems that analyse data and make predictions or decisions, such as automated loan assessments or product recommendations.
Cloud computing and software-as-a-service platforms – online systems used to store data or run business applications, including cloud-based email, payroll, or customer management tools.
Biometric technologies – tools that use physical characteristics to identify people, such as fingerprint scanners or facial recognition systems.
Internet of Things (IoT) devices – connected devices that collect data on an ongoing basis, including smart meters, CCTV systems, or vehicle tracking devices.
Advanced data analytics and automated decision-making tools – technologies that analyse large data sets or make decisions with little human involvement, such as fraud detection or employee monitoring systems.

Inherently, the use of Emerging Technologies can increase privacy and data protection risks, including unauthorised access, misuse of data, or unfair outcomes for individuals.

What are Key Legal and Regulatory Considerations?

In Nigeria, Personal Data processing is primarily regulated by the Nigeria Data Protection Act, 2023 (NDPA). The General Application and Implementation Directive (GAID) issued by the Nigeria Data Protection Commission (NDPC) provides additional guidance on how organisations should apply the law in practice, particularly with respect to the use of Emerging Technologies (Articles 43 and 44 of the GAID). In addition to the above, sector-specific rules may apply, particularly in regulated industries such as banking, telecommunications, healthcare, and fintech.

The following are some of the considerations when deploying Emerging Technologies in data processing:

a. Lawful Basis for Using Data

Businesses must have a valid legal basis for collecting and using Personal Data. Common lawful bases include consent, contractual necessity, and legal or regulatory obligations.

Emerging Technologies often make it easy to reuse data for new purposes, such as analytics, product development, or AI training. However, data collected for one purpose should not be used for a different purpose unless:

the new use is compatible with the original purpose, or
additional consent is obtained or a legal basis is justified.

Businesses should therefore clearly explain to data subjects how data collected will be used.

b. Automated Decision-making

Many Emerging Technologies rely on automated decision-making, for example in credit scoring, fraud detection, employee monitoring, or targeted advertising.

The law does not prohibit automated decisions, but it requires businesses to:

be transparent about how decisions are made,
ensure decisions are fair and not discriminatory, and
put safeguards in place where decisions significantly affect individuals.

The GAID specifically provides that such tools should be designed to respect data subject rights, including the right not to be subject to solely automated decisions, and to allow data subjects to exercise the right to be forgotten where feasible.

c. Assessment of Risks Before Deploying New Technologies

Where the use of technology may pose higher risks to individuals, businesses are expected to assess those risks in advance. This is commonly done through a Data Protection Impact Assessment (DPIA).

DPIAs are particularly relevant when using:

AI or machine learning systems,
biometric technologies such as facial recognition,
large-scale monitoring or profiling tools, or
new or untested technologies.

Conducting a DPIA helps identify potential risks early and mitigate against those risks prior to deployment. It also demonstrates responsible data governance. DPIAs should be carried out in controlled environments, with repeated adjustments if risks are identified, and the completed assessments filed with the NDPC as part of compliance audit report.

d. Management of Cloud and Cross-Border Data Transfers

Many technology solutions involve storing or processing data outside Nigeria, especially through cloud service providers.

Under the NDPA, a person or entity that determines the purposes and means of processing Personal Data ( a Data Controller), remains responsible for compliance even where third-party or foreign service providers are engaged for processing. Businesses should therefore:

understand the location where data is stored and accessed;
ensure appropriate safeguards are in place for cross-border transfers, and
include clear data protection obligations in vendor contracts.

e. Strong Security and Governance Measures

Emerging Technologies can increase cybersecurity and data breach risks. Businesses are expected to implement security measures that are appropriate to the nature of the data and the technology used.

This includes:

securing systems and networks,
carefully selecting and monitoring technology vendors,
clearly assigning data protection responsibilities, and
training staff on responsible data handling.

The GAID reinforces that the more complex, sensitive or high-risk the technology, the stronger the expected safeguards.

f. Plan for Regulatory Developments

Nigeria’s digital and data protection landscape continues to evolve, including ongoing discussions around AI and digital governance. Businesses should adopt a privacy-by-design approach, ensuring data protection considerations are built into technology decisions from the outset.

Conclusion

Emerging Technologies can deliver significant value to businesses, but they must be deployed responsibly. While the issues highlighted above are not exhaustive, organisations that understand and comply with applicable laws—including the NDPA, the GAID, and relevant sector-specific regulations—will be better positioned to manage legal risk, build trust, and innovate confidently within Nigeria’s growing digital economy.

THE IMPLEMENTATION OF THE NIGERIA TAX ACT 2025 – PRACTICAL GUIDANCE FOR BUSINESSES

January 9, 2026/in Pavestones Newsletters /by Pavestones Legal

BY SEUN TIMI-KOLEOLU AND ENIOLA SOGBESAN

Introduction

The year 2025 marked a pivotal period in Nigeria’s regulatory and business landscape, with notable reforms introduced across the insurance, capital markets, and tax sectors. Given that the Nigeria Tax Act 2025 (the “Act”) became effective from January 1, 2026, it is important that businesses and individuals are aware of the provisions of the Act and how it applies to their businesses.

In our previous newsletters, we examined key provisions of the Act and the compliance obligations of businesses and individuals alike. As the implementation of the Act has now commenced, the newsletter builds on our previous newsletters by providing practical insights and guidance which individuals and businesses may adopt towards ensuring effective tax planning in 2026.

Business Classification and Tax Exposure

The Act classifies companies into two categories –

Small companies: These are businesses (excluding businesses providing professional services) with gross annual turnovers not exceeding ₦100 million and fixed assets below ₦250 million. These category of companies are exempt from the payment of Corporate Income Tax (CIT), Capital Gains Tax (CGT), and Development Levy.
Large companies: These are businesses with annual turnovers exceeding ₦100 million and fixed assets above ₦250 million. Large companies are subject to payment of Corporate Income Tax (CIT), Capital Gains Tax (CGT), and the Development Levy. However, they may benefit from reduced CIT rate from 30% to 25%, subject to an order issued by the President on the advice of the National Economic Council.

In the light of the business classification under the Act, large companies may assess whether restructuring into smaller entities or special purpose vehicles could unlock the exemptions available to small companies under the Act. This assessment should be considered having regard to the anti-avoidance rules under the Tax Administration Act. To read our previous newsletters on how businesses may restructure for tax efficiency, please click here.

Introduction of Development Levy

The introduction of a 4% development levy on the assessable profits of all companies (except small companies and non-resident companies) is a novel introduction of the Act. The Development Levy consolidates multiple taxes such as the Tertiary Education Tax (TET), Information Technology Levy (IT), the National Agency for Science and Engineering Infrastructure (NASENI) levy and the Police Trust Fund (PTF) levy. The harmonization of this development levy helps businesses address the often unclear and multiple levies imposed under previous tax regimes. It also helps ease the burden of computing various levies and interfacing with multiple government agencies.

Minimum effective tax rate affecting Multinationals

Where a company with a minimum aggregate turnover of N20 billion or is a member of a multinational group declares tax which is less than 15% of its profits, the tax authorities are empowered to adjust the tax payable to 15% of the company’s profits.

Capital Gains Tax on indirect transfer of shares

The Act increases the Capital Gains Tax (CGT) rate from 10% to 30% and introduces the payment of CGT on indirect transfer of shares in Nigerian companies. This means that where shares are sold in offshore holding companies, a Nigeria CGT is triggered (subject to treaty exemptions). Also, the tax exemption threshold for the sale of shares in Nigerian companies will be applicable where the disposal is less than NGN150million and the chargeable gains do not exceed NGN10million in any 12 consecutive months. To read our previous newsletters on this issue please click here.

From a practical standpoint, multinational and investment holding groups should carefully review their offshore structures. Where required, shifting asset ownership to Nigeria or a restructuring may be necessary to reduce exposure under the new tax rules.

Introduction of Economic Development Incentive

The Act replaces the pioneer status incentive, with an economic development incentive. This incentive introduces a tax credit of 5% per annum for 5 years on qualifying capital expenditure purchased by eligible companies in designated priority sectors (electrical equipment, electronics, renewable energy, music production etc.) If a company has unused tax credits or qualifying capital expenses, it can carry them forward for another 5 years. However, any tax credits still unused after this timeline will expire.

Businesses that plan to invest in these sectors may consider channeling their funding through eligible entities or joint ventures to maximize access to tax credits. It is equally important to conduct due diligence on the entities and maintain proper supporting documentation. This is essential not only to claim the credits but also to safeguard such businesses during regulatory reviews.

Progressive Personal Income Tax (PIT) regime

The Act changes the income brackets and applicable tax rates for each bracket. Individuals earning NGN800,000 or less per annum are exempt from tax on their income and gains, while higher income earners will be taxed at a higher rate up to 25%. The Act also increases the tax exemption threshold for compensation for loss of employment or injury from NGN10million to NGN50million.

Accordingly, companies and individuals alike should consider the personal income tax rates when negotiating fees, salaries or other income which is subject to personal income tax.

Exemption from Value Added Tax

The Act provides a comprehensive list of items and supplies that are exempted from Value Added Tax (VAT) or chargeable to VAT at 0%. These items include oil and gas exports, baby products, land etc. Businesses engaged in the production or supply of these products should realign their fees to exclude this tax as it is no longer applicable to the nature of their business operations.

Compliance and Banking Integration

The Act makes a Tax Identification Number (TIN) mandatory for all taxable persons. Banks and other financial institutions are now required to verify TINs before opening or maintaining accounts, and failure to comply could restrict access to banking services.

Businesses must immediately verify that all group entities, directors, and beneficial owners are properly registered with the Nigeria Revenue Service. A compliance audit at this stage will prevent operational disruptions and reputational risks once enforcement begins.

Conclusion

The Tax Act is a major step by the Nigerian government towards achieving a unified and transparent tax system. As the tax authorities begin to implement its provisions, the effect of the Act will be better appreciated. It is important that both local and foreign companies operating in Nigeria carry out a comprehensive review of their tax strategies and processes to ensure compliance.

The content of this newsletter is, however, not exhaustive and should not be taken as legal or financial advice. Businesses and individuals are encouraged to seek tailored professional guidance to understand the specific impact on their operations.

THE NCC INTERNET CODE OF PRACTICE 2025: IMPLICATIONS FOR STAKEHOLDERS AND THE REGULATION OF ONLINE COMMUNICATION PLATFORMS

December 19, 2025/in Pavestones Newsletters /by Pavestones Legal

BY ADERONKE ALEX-ADEDIPE AND HILLARY OKOROTIE

Introduction

The Nigerian Communications Commission (NCC) recently published a draft Internet Code of Practice (the “Code”), aimed at promoting a safer and more responsible internet environment for consumers.

The importance of the internet in the modern business environment cannot be overstated. Commercial transactions are increasingly conducted online, and digital services are continuously rendered to businesses and individuals, including minors. The Code is intended to provide guidance on the operation and regulation of online and digital communications platforms and Internet Access Service Providers (IASP) in Nigeria. While the Code is currently under review, we have highlighted in this newsletter some key provisions of the Code and their potential implications for stakeholders.

Who is the Code Applicable to?

The Code applies to IASPs licensed by the NCC to provide internet access services, as well as online and digital communications platforms that offer communication services, whether directly or through intermediaries.

In addition, the Code extends to all entities operating under the regulatory purview of the NCC, ensuring a broad and uniform application across Nigeria’s communications ecosystem.

What are the Obligations of Online and Digital Communications Platforms and IASPs?

-Protection of Minors and other Vulnerable Persons

The Code requires IASPs and online and digital communication platforms to implement parental control tools that are simple to enable, including content filtering and usage monitoring features, to allow parents and guardians effectively monitor and control the use of internet services and digital communications platforms by minors. The Code further requires the implementation of clear rules in their terms and conditions or terms of use that protect children and vulnerable persons, in compliance with applicable laws and regulations in Nigeria.

In addition, IASPs must implement appropriate measures to block unlawful content[1] and establish a clear and accessible mechanism for reporting such content to the NCC.

– Implementation of Data Privacy and Cybersecurity Measures

Further to the Code, IASPs are required to comply with the provisions of the Nigeria Data Protection Act 2023 and the NCC Consumer Code of Practice Regulations 2024 in the management of personal data. In the event of a data breach resulting in the exposure of consumer data, the Code mandates that affected consumers be notified within 48 hours of the breach, and that the NCC also be notified within 48 hours of the occurrence of the breach.

The Code also prohibits the harvesting of consumer data by an IASP or any third party without the prior approval of the NCC. In relation to cybersecurity, the Code requires all IASPs to implement a cybersecurity framework to be issued by the NCC.

– Governance Rule/Guideline

The Code requires online and digital communications platforms to implement community rules or guidelines governing the moderation of use by consumers of their platforms, in line with the Nigerian Communications Act 2003, to ensure that network services or applications are not used for any unlawful purpose. Such community rules or guidelines must be submitted to NCC within 6 months of the issuance of the finalised Code. The Code further provides that the NCC may, from time to time, issue additional requirements for adoption by online and digital communications platforms.

IASPs are also required to incorporate clear rules in their Terms of Use prohibiting the use of internet access services for spamming or other unsolicited communications.

– Compliance and Reporting Requirements

IASPs are required to submit biannual reports to the NCC containing operational details, whether any takedown orders or content removal requests have been received from consumers, the extent of compliance with the Code, and details of collaboration with other relevant entities. Online and digital communications platforms are also required to submit biannual reports in the format prescribed by the Code. Such report should include, among other details, the type of service provided, whether any takedown requests have been made, the actions taken in response to such requests, and the outcomes of those actions.

The Code further provides that online and digital communications platforms, IASPs, and other relevant entities must, upon request by the NCC, submit compliance reports or any additional information necessary to demonstrate compliance with the provisions of the Code.

What are the rights of Consumers under the Code?

As provided under the Code, consumers have the right to create, share, and access information that is not unlawful under any law in Nigeria. Where content is lawful, such content shall not be subject to discrimination by an IASP. While providing internet access services, IASPs are required to ensure transparency in the management of internet traffic, including clear disclosure of how such traffic management practices may affect consumers, as well as any network optimisation measures implemented. IASPs must also ensure that there is no deliberate degradation of internet traffic.

Conclusion

Although the Code is not finalized, it potentially provides streamlined guidance on the obligations and operational requirements applicable to IASPs and online and digital communication service providers. The Code seeks to balance innovation in the use of the internet with consumer protection and safety particularly for minors. It is therefore important for relevant stakeholders to assess their existing systems, policies, and operations in contemplation of the finalisation of the Code.

[1] Unlawful content is defined in the Code as any content that is in violation of an existing law in Nigeria.

THE CENTRAL BANK OF NIGERIA REGULATORY UPDATE: REVISED CASH POLICIES AND AUTHORISED PUSH PAYMENT FRAUD GUIDELINES

December 12, 2025/in Pavestones Newsletters /by Pavestones Legal

BY SEUN TIMI-KOLEOLU AND OMODELE FATODU

Introduction

The Central Bank of Nigeria (“CBN”) has recently issued two regulatory communications: (i) the Revised Cash-Related Policies, effective 1 January 2026; and (ii) the Draft Guidelines for Handling Authorised Push Payment (“APP”) Fraud. Both documents introduce new operational requirements for financial institutions and provide guidance for customers, lenders, and payment service providers.

1. REVISED CASH-RELATED POLICIES – Key Changes

Removal of Cash Deposit Limits – The CBN has abolished previously applicable cash-deposit limits. Under the former regime, customers were subject to cumulative deposit limits and charges for excess cash deposits. These thresholds and associated fees have now been completely removed.
Upward Adjustment of Withdrawal Limits – Individuals may now withdraw up to ₦500,000 weekly, while corporate entities may withdraw up to ₦5 million. Withdrawals exceeding these limits will attract processing fees of 3% for individuals and 5% for corporate entities.
Elimination of Special Withdrawal Authorisations – The requirement for customers to seek special CBN approval for unusually large cash withdrawals (previously ₦5 million for individuals and ₦10 million for corporate entities) has been discontinued.
Enhanced Obligations for Financial Institutions – Banks are required to ensure that ATMs remain adequately funded and stocked with various denominations. They must maintain a designated account for processing fees charged on withdrawals above the stipulated limits. Banks are also required to submit specified periodic reports, including returns on cash withdrawals above the specified limit and returns on cash deposits to the CBN to support ongoing compliance and supervision.

2. CBN DRAFT GUIDELINES ON APP FRAUD

What is APP Fraud?

APP fraud occurs when a customer is tricked into voluntarily initiating a payment to an account controlled by a fraudster. Although the customer authorises the transfer, it is done under false pretences through deception, manipulation, impersonation, or other fraudulent means.

Key Highlights

Standardised Reporting Framework for Fraud Incidents – Customers are required to report suspected or actual APP fraud to their financial institution within 24 hours, with allowance for reporting within 72 hours where reasonable justification is provided. The guidelines state that “reasonable justification” may include, but is not limited to, circumstances beyond the control of the customer such as illness, force majeure events, time of becoming aware of the fraud, security constraints, or demonstrable unavailability of reporting channels. Upon receiving a report, the institution must acknowledge receipt within 24 hours, open a case file, and begin processing the complaint in line with the guidelines.
Mandatory Inter-Bank Notification within 30 Minutes – Where an APP transaction involves more than one financial institution, the institution that first receives the complaint must notify the other insitiution within 30 minutes of receiving the customer’s complaint.
Defined Timelines for Customer Refunds – Where a customer is entitled to a refund, the responsible institution must complete it within 48 hours after concluding the investigation. In cases involving multiple institutions, refunds must be completed within 16 working days of the complaint.
Strengthened Fraud-Prevention and Consumer-Protection Duties – Financial institutions must provide 24/7 fraud-reporting channels and implement an early warning system to prevent and detect APP fraud in a timely manner. They are required to ensure that customers are aware of available reporting channels and receive clear, accessible, and ongoing education on APP fraud risks and reporting procedures. Financial institutions must also carry out quarterly APP fraud awareness campaigns across multiple media and languages, and ensure that any information shared with other institutions complies with the Nigerian Data Protection Act 2023.
Customer Refund Eligibility – Refund eligibility is subject to the following conditions:
- The customer authorised the transaction under false pretence and had no reason to suspect fraud;
- The customer reported the fraud within 72 hours and cooperated with the investigation;
- There is no evidence of negligence, collusion, or criminal intent by the customer; and
- The financial institution failed to implement appropriate fraud detection, warning, or verification protocols that could have prevented the transaction.
Financial institutions are not obligated to reimburse where:
- The customer acted fraudulently or negligently;
- The customer delayed reporting beyond 72 hours without reasonable justification; and
- The transaction occurred before the effective date of the guideline, unless the institution voluntarily applies it retroactively.

Conclusion

CBN’s Revised Cash-Related Policies and Draft Guidelines on APP Fraud introduce updated operational requirements that affect both financial institutions and customers. Banks and payment service providers should review these documents to ensure compliance ahead of the effective dates, while customers should familiarise themselves with the reporting procedures and eligibility criteria to protect their interests in cases of APP fraud.

CORPORATE COLLAPSE AND CREDITOR REMEDIES – NAVIGATING NIGERIA’S INSOLVENCY FRAMEWORK

December 5, 2025/in Pavestones Newsletters /by Pavestones Legal

BY ADERONKE ALEX-ADEDIPE AND ENIOLA SOGBESAN

Introduction

Corporate finance is a fundamental aspect of commercial transactions and plays a critical role in the fulfillment of contractual obligations. However, where a company becomes insolvent and is unable to fulfil its contractual obligations, it may collapse and consequently trigger creditor rights. Additionally, the doctrine of corporate personality and liability limiting clauses in contracts may affect the enforcement of creditors’ remedies under a contract. For creditors, this poses a significant challenge and navigating this landscape requires an understanding of the options available to the creditors. In this newsletter, we examine the implications, options, and rights available to creditors under Nigerian law in recovering outstanding debts during an insolvency process.

Implications of Corporate Insolvency

The Companies and Allied Matters Act (CAMA /the “Act”)[1] refers to insolvency as a situation where a company is unable to pay its debt. Also, an insolvent person is defined in CAMA as “any person in Nigeria who, in respect of any judgment, Act or court order against him, is unable to satisfy execution or other process issued in favour of a creditor, and the execution or other process remains unsatisfied for not less than six weeks[2]”

On this premise, CAMA makes comprehensive provisions on the implications that would be triggered in the event of corporate insolvency for both the company and its creditors, all of which are geared towards the protection of the creditors. These include:

Suspension of Directors’ powers – this is one of the first events that arises in the event of corporate insolvency. This involves the surrendering of the decision-making powers of the directors to either a liquidator, receiver or administrator.

Impact on Shareholders – where the company is limited by shares, the liability of the shareholders to the company’s creditors is limited to the amount unpaid in respect of the shares held by them in the company.

Review of Prior Transactions – Corporate insolvency may lead to an examination of the company’s previous transactions, particularly those carried out at gross undervalue[3], without consideration, or those that amount to a fraudulent preference of certain creditors[4].
Business Rescue Options – Under the Act, companies experiencing insolvency may explore various business rescue arrangements such as the use of administration procedures and voluntary arrangements to restructure and recover their business as described below.

Corporate Insolvency Options under the Companies and Allied Matters Act 2020

The Act provides various insolvency mechanisms options to both creditors and companies that may be utilized in the event of a corporate insolvency. The option to be used is largely dependent on the peculiarities of each case and the overall objective of the creditors/companies. Some corporate insolvency options available to creditors/companies under the Act include –

Administration – The primary objective of an administration is to (i) rescue the company as a going concern, (ii) to achieve better results for the company’s creditors as a whole, than would be likely if the company were wound up and (iiv) realizing property in order to make a distribution to one or more secured or preferential creditors[5]. An administrator may be appointed by the court, the company or its directors or the holder of a floating charge. The appointed administrator takes over management of the company’s affairs, and during this period, no creditor actions may be taken against the company without the consent of the administrator or permission of the court.

Company Voluntary Arrangements – This insolvency option serves as a contractual restructuring arrangement. It is utilized by companies to negotiate arrangements with creditors for the settlement of debts[6]. This option is used where a company does not have sufficient funds to pay its debts but can offer other forms of consideration to the creditors as full and final settlement of its obligations. Where this option is approved by the requisite majority of the company’s creditors, such arrangement would bind the creditors.

Receivership – Receivership is an insolvency mechanism in which creditors with secured interests or debentures appoint a receiver or receiver/manager to take control of the company’s assets. The primary objective is to take possession of and protect the assets, receive rents, profits and discharge all outgoings and realize the assets for the benefit of the creditors.[7]

Liquidation (Winding-Up) – This is the most drastic corporate insolvency option and should only be adopted where the objective is the dissolution of the company. This procedure may be initiated by either the company’s creditors, members or regulatory authorities by filing a petition before the court. The objective of this procedure is to appoint a liquidator to take account and manage the assets of the company for the purpose of settling the company’s liabilities.

Creditor Rights in Corporate Insolvency

The rights of a creditor is dependent on the type of debt owed and the corporate insolvency option adopted for the recovery of such debts. Some creditor rights under corporate insolvency include –

Commencement of Corporate Insolvency Proceedings: The creditors of a company are the principal parties entitled to initiate any corporate insolvency option against the company. This includes the right to appoint receivers, administrators, or commence winding up proceedings against the company for inability to pay its debt.

Control of Insolvency Process: Given that the creditors are primarily responsible for initiating insolvency proceedings against a company, it follows that they also control the process. In a creditor’s voluntary winding up, the liquidator is appointed or approved by the creditors and the actions of such liquidator are controlled by the creditors.[8] The liquidator is expected to act in accordance with the directions of the creditors and in the interest of the creditors in the management of the company.

Priority Rights – Priority rights refer to the procedure and rankings with which the debts of the company will be settled. In this regard, the nature of each creditor’s debt will determine their priority rights and how they rank. Creditors that are secured by fixed charges rank the highest[9] followed by the preferential debts (taxes, rates, salaries and charges) which rank higher than company’s creditors secured by floating charges.[10].

Inspection of Corporate Books – Creditors of a company in insolvency have the right to examine the company’s corporate records, including the register of charges, register of debenture holders, and trust deeds securing debentures[11]. Additionally, during a court-ordered winding-up, creditors may access the liquidator’s records and receive the liquidator’s statements on the status of the liquidation.

Conclusion

While corporate insolvency often signals financial distress, it does not always mark the end of a company’s existence. Under the Nigerian legislative framework, corporate insolvency is a structured process with legal implications for both the insolvent companies and their creditors.

Depending on the preferred insolvency option, there may be opportunities for restructuring, debt compromise, or even business rescue. For creditors, the law provides a wide range of rights as highlighted above. These rights are designed to ensure transparency, while balancing the interest of other stakeholders.

Conclusively, the most effective insolvency option is largely dependent on the peculiarities of each case, the type/amount of debt owed and the objectives of the creditors/the company. The ultimate decision made by a creditor whether to pursue liquidation, accept a voluntary arrangement, or support administration, can significantly affect recovery prospects.

[1] S.625 CAMA

[2] S. 868 CAMA

[3] S. 659 CAMA

[4] S. 658 CAMA

[5] S.444 CAMA

[6] S. 434 CAMA

[7] S. 556 CAMA

[8] S.590 CAMA

[9] S.207 (4) CAMA

[10] S. 657 (4) CAMA

[11] S.683 (2) CAMA

REGULATORY UPDATE: 2025 DIGITAL, ELECTRONIC, ONLINE, OR NON-TRADITIONAL CONSUMER LENDING GUIDELINES – NAVIGATING COMPLIANCE

November 28, 2025/in Pavestones Newsletters /by Pavestones Legal

BY SEUN TIMI-KOLEOLU AND MARK IMONITIE

Introduction

In furtherance of its regulatory powers, the Federal Competition and Consumer Protection Commission (the “Commission”) on November 18, 2025 issued the Digital, Electronic, Online, or Non-Traditional Consumer Lending Guidelines, 2025 (the “Guidelines”). The Guidelines aim to contextualize, clarify, and enhance the provisions outlined in the Digital, Electronic, Online, or Non-traditional Consumer Lending Regulations 2025 (the “Regulations”) issued by the Commission in July 2025.

The Guidelines which became effective on November 18, 2025, introduce key provisions affecting digital lenders—such as approval of lending applications, transition for previous license holders, and pilot lending programme.

In this newsletter, we examine some of the key provisions introduced by the Guidelines, which improves on the provisions of the Regulations as discussed in our newsletter earlier written.

Scope of the Guidelines

The Guidelines apply to all individuals, entities, or institutions involved in providing, facilitating, or managing digital, electronic, online, or other non-traditional consumer lending services within the Federal Republic of Nigeria. This includes those operating directly or through digital platforms, agents, or other intermediaries, as well as Nigerian citizens residing both inside and outside Nigeria.

Furthermore, the Guidelines extend to cross-border digital consumer lending services offered to consumers in Nigeria, as well as corporate bodies or government agencies engaged in commercial lending or holding controlling interests in such activities.

However, the Guidelines do not apply to:

financial institutions duly licensed and regulated by the Central Bank of Nigeria;
lending arrangements between employers and employees conducted strictly under an employment relationship; and
cooperative societies that are duly registered, licensed, and operating in accordance with relevant laws.

Approval of Lending Applications

Prior to the Guidelines, the Commission was not obligated to review or approve the mobile or web applications used by lenders in delivering their lending services.

However, under the Guidelines, in addition to the registration requirement for digital lenders outlined in paragraph 15 of the Regulations, applicants are now required to submit the mobile or web application intended for lending services to the Commission for approval.

The Guidelines further require intending digital lenders to provide:

evidence of compliance with relevant standards for mobile applications, data messaging, information security, data quality, and secure authentication, as set by the International Organization for Standardization (ISO);
proof of ownership of intellectual property rights in the lending application or a valid, active license to use it;
confirmation that the lending application complies with the Nigeria Data Protection Act, 2023, and other applicable laws and guidelines of the Nigeria Data Protection Commission; and
any additional information or documentation the Commission may request.

If an applicant fails to disclose any lending application used or intended for consumer lending services, the Commission may refuse approval. If approval was already granted before this nondisclosure is discovered, the Commission may revoke approval or impose a penalty on such applicant. The Commission may also order any application marketplace or digital platform to delist such lending application for violating the Regulations or Guidelines.

The aim of this requirement is to ensure that digital lending platforms meet regulatory standards for security, intellectual property, and data protection before approval, thereby safeguarding consumer interests and maintaining compliance with relevant laws.

Furthermore, the non-refundable approval fee of One Million Naira (N1,000,000) as provided under the Regulation, shall entitle an applicant to register up to two (2) lending applications. Where an applicant seeks to register additional lending applications such that the total number exceeds two (2), the applicant shall pay an additional fee of Five Hundred Thousand Naira (N500,000) per application. In any case the maximum registrable number of applications shall not exceed five (5).

Transition for Previous License Holders

The Guidelines establish the requirements for transitions by digital lenders who were registered under the Digital Lending Guidelines, 2022. It provides that entities registered with the Commission under the 2022 Guidelines and before the 2025 Regulations came into effect, will be regarded as Deemed Licensees.

It is understood that such Deemed Licensees hold a deemed license to offer consumer lending services until June 30, 2026, and Deemed Licensees wishing to continue providing consumer lending services beyond this date must apply to the Commission for approval at least sixty (60) days before the expiration.

Under the Guidelines, a Deemed Licensee is not required to obtain immediate approval from the Commission to provide Consumer Lending Services pursuant to the Regulations. Nevertheless, Deemed Licensees must submit the following to the Commission:

a schedule of loan books and transactions;
the financial statements for the previous financial year;
details of the lending applications used by the Deemed Licensee for digital lending services;
evidence of compliance with annual returns filing as required by the Companies and Allied Matters Act, relevant sector-specific laws and regulations; and
any other information the Commission may request.

If the Commission determines that there has been a significant change since the date of registration—such as changes in the Deemed Licensee’s details, ownership structure, or business nature—the Deemed Licensee will be required to formally apply for approval under the Regulations.

Pilot Programme

The Guidelines introduced new provisions for entities seeking to provide consumer lending services under a Pilot Programme. The Pilot Programme is meant to cater for entities who wish to test the digital lending market prior to full registration, and is a proactive step towards meeting FCCPC’s comprehensive regulatory expectations.

Under the Guidelines, a Pilot Programme means a limited, trial implementation of consumer lending services for the purpose of evaluating performance, functionality, and feasibility in a controlled environment, prior to a full-scale commercial deployment or implementation.

To apply under the Pilot Programme, amongst other information requested by the Commission, an applicant is required to submit: (i) a board resolution approving application and participation; (ii) Certificate of Incorporation; (iii) company profile, organogram, and contact details; (iv) MEMART and updated Status Report; (v) CVs of directors and management staff; and (vi) AML/CTF policy.

The Commission may approve a Pilot Programme if the consumer lending exposure does not exceed One Million Naira (N1,000,000) and onboards less than one hundred (100) unique customers. Other considerations by the Commission include: the sufficiency of resources and expertise to manage risks and losses; the level of innovation and likelihood to enhance accessibility, efficiency, security, quality, or fill market gaps; and the viability of business plan for post-pilot deployment.

The Pilot Programme is valid for a period of ninety (90) days, and is renewable once for an additional period of ninety (90) days upon request. Applicants intending to obtain a full license must apply in writing at least fourteen (14) days before expiration of the Pilot Programme and the Commission may grant full license based on the entity’s performance during the Pilot Programme.

Conclusion

The Guidelines represent a significant step forward by the Commission in enhancing the regulatory framework for digital lending in Nigeria. Implementation of the Guidelines would ensure operational integrity, strengthen consumer protection, foster transparency and accountability within the digital lending ecosystem, and support the sustainable growth of fintech innovations in Nigeria.

THE LEGAL AND REGULATORY FRAMEWORK FOR PRIVATE DEBT FUNDS IN NIGERIA

November 21, 2025/in Pavestones Newsletters /by Pavestones Legal

THE LEGAL AND REGULATORY FRAMEWORK FOR PRIVATE DEBT FUNDS IN NIGERIA

BY ADERONKE ALEX-ADEDIPE AND PROMISE ITAH

Introduction

Many small- and mid-sized businesses struggle to access traditional bank financing due to strict lending requirements, high collateral demands, and limited credit availability. At the same time, investors seeking stable, predictable returns have few reliable options in the public markets.

Private debt, or private credit, helps bridge this gap by enabling non-bank lenders to provide capital directly to businesses, offering flexible terms for borrowers and steady interest income for investors. Globally, private credit has become a rapidly growing alternative asset class, with the market valued at USD 1.5 trillion in 2024 and projected to reach USD 2.6 trillion by 2029.

To scale this model, private debt funds have emerged. In Nigeria, the launch of locally denominated funds, including the pioneer FCMB-TLG Private Debt Fund Series 1, demonstrates growing investor interest and a regulatory environment that increasingly supports private debt.

In this newsletter, we highlight the legal and regulatory frameworks for private debt funds in Nigeria.

What are the Legal Frameworks for Private Debt Funds in Nigeria?

Private debt funds are pooled investment vehicles that raise capital from institutional and high-net-worth investors to lend directly to businesses. Private debt funds in Nigeria typically operate through collective investment schemes (CIS). structured as a trust and incorporated fund vehicle (or in the case of private, unregulated funds as limited partnerships and unincorporated joint ventures).

These fund structures as mentioned above, operate within the legal scope of the Investment and Securities Act (ISA) 2025, particularly Sections 150–197 (the Rules on Collective Investment Schemes, and other subsidiary rules and regulations issued by the Securities and Exchange Commission (SEC)), which govern collective and alternative investment schemes. Under this framework, the following participants play essential roles:

Fund Manager: The fund manager is the central operator of a private debt fund, responsible for developing and executing the fund’s investment strategy, originating and structuring loan transactions, and overseeing the performance of the portfolio companies. In addition to managing investments, the fund manager acts as the fund’s sponsor, submitting the registration application to the SEC and ensuring full compliance with all regulatory requirements under the ISA 2025 and the relevant SEC rules.

Trustees: The trustees are fiduciaries acting on behalf of investors. They monitor the fund’s operations, enforce compliance with governing documents and SEC rules, and safeguard investor interests by providing independent oversight.

Custodian: The custodian is charged with holding the fund’s assets — whether cash, securities, or collateral pledged by borrowers — in safe custody. Custodians ensure segregation of assets and prevent misuse, thereby protecting investor capital.

Registrar: The registrar maintains accurate records of investors, processes subscriptions and redemptions, and facilitates communication with unit holders. This role ensures transparency and proper documentation of investor rights.

Auditors: The auditors independently review and certify the fund’s annual accounts. Their work provides credibility to financial statements and reinforces investor confidence in the fund’s governance.

Investment Committee: The investment committee oversees the fund’s investment decisions, ensuring that transactions align with the fund’s objectives, risk management policies, and overall strategy. It balances the discretion of the manager with structured oversight.

Legal Advisers: The legal advisers draft and review the fund’s documentation — including the trust deed, prospectus, and partnership agreements — and ensure compliance with the Investments and Securities Act and SEC rules.

Investors: The investors, whether institutional or high-net-worth individuals, provide the capital that fuels the fund. In return, they receive fixed-income returns through interest payments and rely on the governance framework and disclosures mandated by the SEC to protect their investments.

All of the participants listed above, other than the investors, must be registered with the SEC as capital market operators.

What are the Regulatory Requirements for Establishing and Operating a Private Debt Fund in Nigeria?

To establish and operate a private debt fund, the fund must obtain registration and authorization, or a no-objection certificate, from the SEC and comply with all ongoing regulatory requirements under the ISA 2025 and the relevant SEC rules.

What are the Registration Requirements for Private Debt Funds in Nigeria?
To obtain authorization to establish and operate a private debt fund, the following must be submitted to the SEC:
- Application to the SEC using relevant SEC Forms
- Fund Information Memorandum/Prospectus (two copies)
- Trust Deed or Limited Partnership Agreement (two copies)
- Certificate of Incorporation of the Fund Manager
- Sworn undertaking to file quarterly returns
- Evidence of payment of authorization fees
- Notarized Certificate of Compliance
- Full and consistent disclosure across all documents
What are the Ongoing Compliance Requirements for Private Debt Funds in Nigeria?
Private debt funds in Nigeria are subject to ongoing compliance requirements under the ISA) 2025 and the SEC rules governing collective investment schemes and alternative investment vehicles. These obligations are designed to ensure transparency, investor protection, and market integrity. Some key regulatory obligations include:
- Maintenance of annual audited financial statements
- Regular investor meetings
- Quarterly reporting to the SEC
- Periodic independent valuation of fund assets
- Establishment and maintenance of an investment committee
- Filing of registration documents and offering circulars
- Compliance with applicable SEC rules and regulations.
Conclusion

Given the challenges businesses face in accessing debt financing from traditional lenders, private debt funds are well-positioned to transform Nigeria’s financing landscape. The ISA 2025 and SEC rules provide a solid legal and regulatory framework for fund establishment, governance, investor protection, and market transparency. With growing private capital activity and the successful launch of Nigeria’s first local-currency private debt fund, the sector is positioned for substantial growth and increasing impact on the economy.

REGULATORY FRAMEWORK AND INVESTMENT OPPORTUNITIES FOR CLEAN ENERGY PROJECTS IN NIGERIA

November 14, 2025/in Pavestones Newsletters /by Pavestones Legal

BY SEUN TIMI-KOLEOLU AND OMODELE FATODU

As the 30th United Nations Climate Change Conference (COP30) convenes in Belém, Brazil, it presents an opportunity to examine Nigeria’s legal and policy measures relevant to clean-energy and climate-aligned activities. Key developments include the approval of the National Carbon Market Framework, the establishment of the Climate Change Fund under the Climate Change Act 2021 (“CCA”) and growing regulatory attention on renewable-energy and waste-to-energy projects.

For investors, and companies, these developments affect project structuring, licensing, environmental compliance, and participation in carbon markets. Understanding the legal and regulatory landscape is essential to identify opportunities, ensure compliance, and mitigate risks in Nigeria’s evolving clean-energy sector.

KEY DEVELOPMENTS AHEAD OF COP30

National Carbon Market Framework: Approved in October 2025, this framework provides formal rules for the registration, issuance, and verification of carbon credits. It establishes a national carbon registry, mandates monitoring, reporting, and verification (MRV) protocols, and enables benefit‑sharing mechanisms for community and ecosystem-based projects. This framework lays the foundation for Nigeria’s structured participation in carbon markets.

Climate Change Fund (the “Fund”): Established under the CCA, the Fund channels both public and private climate finance into mitigation and adaptation initiatives. The Fund is expected to support clean-energy projects, ecosystem restoration, and other climate-aligned interventions by leveraging grants, public contributions, and potential carbon-related revenue. In November 2025, at COP30, the Vice-President, Senator Kashim Shettima, stated that through the National Carbon Market Framework and the Fund, the government aims to mobilise up to $3 billion annually in climate finance. This will be reinvested in projects such as community-led reforestation, blue carbon projects, and sustainable agriculture.

National Council on Climate Change (NCCC): Created under the CCA, the NCCC coordinates Nigeria’s climate strategy, oversees the Climate Change Fund, and sets national priorities for mitigation and adaptation. It plays a central role in approving projects eligible for carbon credit registration and ensuring alignment with national climate‑change objectives.

Nature-Based Climate Solutions: Under S.27 of the CCA, the NCCC is required to promote and adopt nature-based solutions to reducing greenhouse gas emissions and mitigating climate change issues in Nigeria. In 2025, the NCCC adopted “Amplifying Nature-Based Climate Solutions” as its theme for the year, with a technical site visit to mangrove forests in the Niger Delta to assess restoration and conservation opportunities. The Climate Change Act also provides for the establishment of a REDD+ registry for forest carbon projects.

Clean-Energy Deployment: Nigeria’s Renewable Energy Master Plan establishes targets for solar, wind, biomass, and other renewable technologies, aiming to significantly increase the share of renewables in electricity consumption by 2025. In addition, the Revised National Energy Policy and the Energy Commission of Nigeria encourage the deployment of biomass and waste-to-energy technologies as part of a circular economy strategy. These frameworks collectively promote diversified renewable-energy development beyond traditional solar and wind, encompassing distributed generation, biomass, and waste-to-energy solutions.

REGULATORY AND LEGAL CONSIDERATIONS FOR CLEAN-ENERGY PROJECTS

As Nigeria’s regulatory landscape for clean-energy and climate-aligned projects becomes more increasingly structured, and understanding the applicable frameworks is critical for project development and investment. Key considerations include:

The Nigerian Electricity Regulatory Commission (NERC): The Electricity Act 2023 clarifies licensing obligations for electricity generation, including waste-to-energy and other renewable-energy facilities. Developers are required to obtain approvals at both federal and state levels, particularly when projects involve grid interconnection or the sale of electricity to industrial off takers. The NERC regulates licensing, metering, data reporting, and tariff approval. Compliance with NERC regulations is increasingly a prerequisite for financing, especially when projects involve power sales to utilities or industrial clients.

Environmental & Social Compliance: Waste-to-energy projects and other energy generation projects can have significant environmental and community impacts. Developers are required to conduct Environmental Impact Assessments (EIAs) and prepare Environmental and Social Management Plans (ESMPs), ensuring alignment with standards such as the IFC Performance Standards.

Climate Legislation and Carbon Markets: Under the CCA, corporate actors in the clean-energy space must consider national climate‑risk strategies and long‑term carbon planning. Projects that feed into, or derive benefit from, Nigeria’s carbon-market framework must align with the planning and reporting processes overseen by the NCCC. These include securing a No‑Objection Certificate from the NCCC before carbon credits can be issued or transferred and registering projects in the national carbon registry. Developers must implement benefit-sharing mechanisms, clarify carbon ownership rights, and include dispute-resolution processes in contracts. Failure to comply can result in credit revocation or financial penalties.

Data Protection and Monitoring: Projects that use digital platforms or remote monitoring fall under the Nigeria Data Protection Act 2023 (“NDPA”). Under the NDPA, Companies must implement safeguards for operational and personal data, including privacy-by-design, cross-border transfer compliance, and cybersecurity measures.

OPPORTUNITIES IN NIGERIA’S CLEAN-ENERGY TRANSITION

Nigeria’s regulatory and policy shifts open up several opportunities in the clean-energy space. Waste-to-energy, solar, and other distributed renewable solutions are gaining traction as commercially viable options. Waste-to-energy projects address multiple challenges simultaneously by supporting electricity generation, improving urban waste management, and contributing to emissions reduction.

By converting waste into electricity and generating carbon credits, such projects address pressing urban challenges while generating multiple revenue streams. Waste-to-energy initiatives contribute to strong ESG outcomes by reducing environmental impacts, improving urban waste management, and contributing to emissions reduction. Integrating regulatory compliance and carbon-market participation into such operations strengthens project viability and investment appeal, particularly when attracting socially responsible investors, as such projects promote ecological integrity, transparency, and alignment with national climate goals.

Key avenues for creating value include:

Diversified Revenue from Waste-to-energy: Companies can generate revenue by selling electricity to industrial off takers or distribution companies, receiving tipping fees for processing waste, and generate additional revenue from the sale of carbon credits.

Carbon Projects and Finance: Companies can generate revenue by registering eligible projects and issuing carbon credits that can be sold once verified. Access to concessional finance or blended funding can further improve project returns.

Strategic Partnerships: Companies can secure steady income by collaborating with government authorities on waste management, renewable energy, or nature-based initiatives.

Solar and Distributed Renewables: Companies can generate revenue from Power Purchase Agreements (PPA) with commercial and industrial users, solar farms, rooftop and off-grid generation, and embedded generation solutions.

CONCLUSION

COP30 provides a backdrop to Nigeria’s evolving regulatory and policy framework for clean-energy and climate-aligned projects. Understanding the legal and regulatory environment is essential for investors, companies, and legal advisers to structure projects effectively, comply with applicable laws, and capitalise on emerging opportunities.

Decoding the Insurance Reform Act: New Rules, New Realities for Intermediaries

November 7, 2025/in Pavestones Newsletters /by Pavestones Legal

BY ADERONKE ALEX-ADEDIPE AND HILLARY OKOROTIE

Introduction

On August 5, 2025, the Nigerian Insurance Industry Reform Act (the “Act”) was signed into law, reforming the regulatory framework for insurance companies and other entities providing services within the insurance industry. For intermediaries such as insurance agents, brokers, loss adjusters and other stakeholders the new Act seeks to streamline and reform their operational obligations as well as their licensing requirements.

In this newsletter we highlight some key provisions of the Act as they relate to insurance intermediaries, their licensing requirements, penalties for noncompliance and other notable provisions of the Act.

Licensing Requirements for Insurance Intermediaries and Penalties for Noncompliance

Insurance Agents

Insurance agents are typically licensed to market, negotiate, or sell insurance products on behalf of an insurance company.

The Act provides that individuals or entities who intend to carry on business as insurance agents must first be licensed by the National Insurance Commission (the “Commission”). Where an individual is seeking to be licensed by the Commission, the Act requires that such an individual must possess a certificate of proficiency issued by the Chartered Insurance Institute of Nigeria. Where the agent is a company, one of its principal officers must possess the certificate of proficiency, as well as 10 years experience working in an underwriting company.

In addition, the applicant must not have been convicted of an offence involving fraud or dishonesty. Upon approval of the application by the Commission, the licence shall be due for renewal after a period of 3 years. Previously, agents were required to renew their licenses every year.

Individuals or entities operating without a license are liable to imprisonment for a term of 6 months or a fine of N500,000 or both. The entity or individual may also be required to issue a refund of any payment collected for services rendered while acting as an insurance agent. For licensed insurance companies transacting business with unlicensed insurance agents, such companies shall be liable to a sum five times the premiums received in relation to insurance transactions as penalty.

Insurance Brokers

In contrast to insurance agents, insurance brokers act on behalf of the policyholder. They assess risks, negotiate coverage, and assist policyholders throughout the insurance transaction.

An entity intending to operate as an insurance broker is required to be registered under the Companies and Allied Matters Act(“CAMA”). In addition, a partner or the chief executive officer of such a company must be a member of the Chartered Insurance Institute of Nigeria, belong to a recognized body of registered insurance brokers, and possess relevant cognate insurance experience.

Any person or entity that operates as an insurance broker without registration and licensing by the Commission is liable to a fine of N10,000,000 in the case of a corporate entity, or N5,000,000 or imprisonment for a term of 12 months in the case of an individual. Furthermore, any licensed insurance company that transacts business with an unlicensed insurance broker, or with an insurance broker whose licence has expired, shall be liable to pay as a penalty the commission due to it on such transactions.

Furthermore, to operate as an insurance broker, the entity must provide comprehensive risk assessment in respect of the insurance policy. The Act also provides that no insurance broker shall engage in the business of reinsurance brokering without the prior approval of the Commission. In addition, an entity licensed to operate as an insurance and reinsurance brokering firm shall neither directly nor indirectly hold more than 10% interest in any insurance company or loss-adjusting company.

An insurance broker is also required to maintain a professional indemnity cover of not less than N100,000,000 or 50% of its preceding year’s annual brokerage income, whichever is higher, among other regulatory requirements. Under the Insurance Act 2003, insurance brokers were only required to maintain a professional indemnity cover of 10,000,000 or 50% of their annual income for the preceding year.

Loss Adjusters

Loss adjusters are intermediaries who assess or investigate the compensation due to a policyholder in the event of an insurance claim. This category of intermediaries operates on behalf of the insurance company to determine the extent of the loss or damage and to verify the validity and value of the policyholder’s claim. Similar to insurance brokers, loss adjusters are required to be registered under the CAMA. The chief executive officer or executive director of a loss adjusting firm must be a member of the Chartered Insurance Institute of Nigeria as well as a recognized body of loss adjusters. In addition, no partner or director of a company engaged in loss adjustment services shall be concurrently employed by another insurance entity. Upon approval, a loss adjuster’s licence shall be renewed every 5 years. In addition, under the Insurance Act 2003, loss adjusters were required to maintain a professional indemnity cover similar to that required of insurance and reinsurance brokers. However, under the Act, this is no longer a requirement.

Any person or company operating as a loss adjuster without a valid licence commits an offence and shall be liable, on conviction, to a penalty of N500,000 in the case of a company, or N250,000 and imprisonment for a term of twelve (12) months in the case of an individual.

Conclusion

The Act seeks to ensure that only duly licensed intermediaries operate in the insurance value chain and enhance consumer protection whilst also creating an enabling environment for the intermediaries. Ultimately, these reforms are expected to enhance public confidence and promote ethical practices within the insurance industry.

NEW REGULATORY GUIDELINES FOR ELECTRONIC INVOICING IN NIGERIA 2025 – IMPLICATION FOR FINTECHS AND ESG.

October 31, 2025/in Pavestones Newsletters /by Pavestones Legal

BY SEUN TIMI-KOLEOLU AND ENIOLA SOGBESAN
Introduction

Across the world, governments and private sector innovators are accelerating the shift from paper-based and PDF invoices to secure, structured and fully digital invoicing systems. This transformation is a foundational step towards the reduction of carbon footprints in line with ESG goals, the promotion of a greener economy and improving financial interoperability in the global digital economy.

In Brazil, the Complementary Law Project No. 68, which mandates the use of e-invoices becomes effective from January 1, 2026 for all municipalities and the Federal District. Similarly, in the European Union (EU), the adoption of the e-Invoicing Directive 2014/55/EU in April 2014 and the “VAT in the Digital Age” (ViDA) in March 2025, signified the commencement of major changes in e-invoicing within the EU and globally. Effective from 2026, mandatory B2B e-invoicing will commence in countries such as France and Belgium, while intra-EU e-invoicing will become the standard by 2028.

Effective from September 1, 2025, Nigeria now joins this global movement with the enactment of National Regulatory Guidelines for Electronic Invoicing in Nigeria 2025 (the “Guidelines”) by the National Information Technology Development Agency (NITDA). The Guidelines are designed to advance a robust digital economy by promoting electronic governance, digital transformation and ensuring alignment with global standards, while upholding data security and safeguarding user privacy.

This newsletter explores the practical implications of the Guidelines for end users, business owners and the wider technology ecosystem.

1. What is Electronic Invoicing?

Electronic invoicing, also known as e-invoicing, is the digital exchange of an invoice between a supplier and a buyer of a good or service. An e-invoice is an invoice issued, sent, and received in a structured way that makes it easy to process automatically and electronically. The Guidelines define it as a digital process that replaces paper invoices by enabling the structured exchange and processing of invoices, credit notes and debit notes between buyers and sellers through integrated electronic invoicing solutions.

2. What is the scope of the Guidelines?

The Guidelines apply to the following entities:

a. regulatory authorities seeking to implement or oversee e-invoicing systems e.g. Government Ministries, Agencies and Departments. (MDA’s);

b. service providers, including Access Point Providers and System Integrators e.g. (Remita, InterSwitch, Etranzact etc.);

c. any entity involved in the generation, transmission, processing, or utilization of e-invoices.

3. Is there a licensing requirement for providers of e-invoicing services?

Yes, the Guidelines create two license categories – System Integrators and Access Point Providers.

4. Who is a System Integrator?

System Integrators are entities that provide software or hardware solutions compliant with e-invoicing regulations and are capable of securely exchanging data via licensed Access Point Providers. These entities are required to ensure that all e-invoices issued by businesses are created in accordance with the approved e-invoice format set out in the Guidelines.

5. Who is an Access Point Provider?

Access Point Providers are responsible for the secure transmission of electronic invoices. They serve as gateways that connect business e-invoicing systems with the government-mandated e-invoicing infrastructure. They provide the technology infrastructure that ensure the effective delivery of e-invoices to the government. e.g. Interswitch, e-tranzact etc.

6. What are the requirements of obtaining a System Integrator license?

To obtain a System Integrator license, the following are required;

a. a non-refundable application fee of One Million Naira (N1,000,000) or such other amount as NITDA may specify;

b. submission of a duly completed accreditation form;

c. minimum paid-up share capital of 10 Million Naira (N10,000,000) and evidence of registration with the Corporate Affairs Commission;

d. the company’s objectives must include digital technology services;

e. a minimum of one-third of the company’s shares must be held by Nigerians;

f. evidence of compliance with the Nigeria Data Protection Act 2023;

g. detailed operations, dispute resolution, whistle-blowing and other policies;

h. evidence of organizational capacity and technical expertise to provide e-invoicing services and;

i. a minimum of one director who must have five (5) years of professional experience in digital technology services and has not been declared bankrupt or convicted of fraud.

7. What are the requirements of obtaining an Access Point Provider license?

To obtain an Access Point Provider license, the following are required;

a. a non-refundable application fee of One Million Naira (N1,000,000) or such other amount as NITDA may specify;

b. submission of a duly completed accreditation form;

c. minimum paid-up share capital of 100 Million Naira (N100,000,000) and evidence of registration with the Corporate Affairs Commission;

d. the company’s objectives must include digital technology services;

e. a minimum of one-third of the company’s shares must be held by Nigerians;

f. evidence of compliance with the Nigeria Data Protection Act 2023;

g. detailed operations, dispute resolution, whistle-blowing and other policies;

h. evidence of organizational capacity and technical expertise to provide e-invoicing services;

i. a minimum viable product suitable for e-invoicing and;

j. a minimum of one director who must have five (5) years of professional experience in digital technology services and has not been declared bankrupt or convicted of fraud.

8. What is the duration of the license?

Upon the approval of NITDA, a provisional license which is valid for six (6) months will be issued. The applicant may apply for an extension of the provisional license for a further three (3) months. The final license which is issued by NITDA is valid for two (2) years and subject to renewal after compliance with all renewal requirements that may be issued by NITDA.

9. What other technical requirements are required of a license holder?

a. all Access Point Providers must guarantee a minimum up time of 99.9% per month;

b. scheduled maintenance should be performed during off-peak hours, with not less than 48-hour advance notice to the end-user;

c. all invoices should be processed and transmitted within 24 hours;

d. any errors in processing should be resolved within 48 hours;

e. all support requests should be acknowledged within 1 hour and resolved within 6 hours for critical issues, and within 24 hours for non-critical issues;

f. dedicated support channels should be available 24 hours via email, phone and an online portal.

10. How does this affect the licensing obligations of FinTech’s and other tech entities?

With the enactment of the Guidelines, all previously unlicensed FinTech’s, who offer e-invoicing services, are now required to be licensed. This may also apply to other FinTech’s licensed by the Central Bank of Nigeria.

11. How does this affect the ESG obligations of businesses?
The Guidelines is playing a role in encouraging businesses to comply with ESG goals through the promotion of electronic invoicing and the reduction of paper usage by businesses.

With the integration of more environmentally sustainable business practices in their operations, businesses are able to reduce their carbon footprint and promote a greener economy.

Conclusion

The 2025 Electronic Invoicing Guidelines positions Nigeria alongside global economic leaders who are modernizing financial reporting and fulfilling their ESG obligations through structured digital invoicing frameworks. By embedding interoperability, data protection, and secure transmission channels within its regulatory framework, Nigeria is laying the foundation for a more transparent, efficient, and globally integrated business environment.

The Guidelines also signal a new era for the Nigerian technology ecosystem. As invoicing becomes connected to real-time payments, compliance automation, and data-driven financial services, opportunities will expand for licensed Access Point Providers, System Integrator and other technology service providers.