Archive for category: Pavestones Newsletters

BY SEUN TIMI-KOLEOLU AND ENIOLA SOGBESAN

Introduction.

On Tuesday, August 5, 2025, the Nigerian President, Bola Ahmed Tinubu signed into law the Nigerian Insurance Industry Reform Act (NIIRA or the “Act”) 2025. The Act represents a significant milestone in the development of a robust regulatory framework designed to support the goal of growing the Nigerian economy to the tune of one trillion US dollars by 2030. The Nigerian Insurance sector faces a historic transition as the Act replaces old regulations and unifies disparate insurance laws into a single, contemporary framework.

This newsletter highlights key provisions of the Act such as scope and license categorization, capital requirements, consumer protection and regional policy integration through the introduction of the ECOWAS Brown Card Scheme.

A. Scope & License Categorization

The Act is applicable to all insurance businesses and insurers in Nigeria except:

1. an association of persons with no share formed for the purpose of aiding its members or their dependents;
2. a corporate or unincorporated body whose business is established outside Nigeria and engaged solely in re-insurance transactions with insurers licensed under the Act;
3. deposit insurance carried out by the Nigerian Deposit Insurance Corporation under the Nigerian Deposit Insurance Corporation Act.

Furthermore, the Act broadly provides for two (2) license categories – life insurance and non-life insurance. While the life insurance license category is divided into four (4) classes which are: individual life assurance, group life assurance, annuity and health insurance businesses’, the non-life insurance license include: fire insurance, general accident insurance, motor vehicle insurance, marine and aviation insurance, energy (oil, gas and power) insurance, engineering insurance, bonds credit guarantee and suretyship insurance and agricultural insurance other than those covered by the Nigerian Agricultural Insurance Corporation Act.

Notwithstanding the above, the Act authorizes the National Insurance Commission (the “Commission”) to publish additional insurance classes in the Federal Government Gazette.

B. Capital Requirements

To improve operators’ financial stability, the Act stipulates the minimum share capital requirement for insurers licensed under the Act. This new share capital requirement is the first recapitalization in over two decades in the insurance industry.

The minimum capital requirements are listed below:

1. Non-Life Insurance Business: The higher of fifteen billion naira (N15,000,000,000) or the risk-based capital determined by the Commission.
2. Life Insurance Business: The higher of ten billion naira (N10,000,000,000) or the risk-based capital determined by the Commission.
3. Reinsurance Business: The higher of thirty-five billion naira (N35,000,000,000) or the risk-based capital determined by the Commission.

Also, the Act requires all insurers registered before the commencement of the Act to comply with the minimum share capital requirements within 12 months of the commencement of the Act. Furthermore, the Act empowers the Commission to require an insurer to increase its capital beyond the minimum capital requirement where the Commission considers appropriate having regard to the nature, size and complexity of the insurance business of the insurer.

C. Regulatory Filings

The Act requires every insurer not later than June 30 of each year, to submit in writing to the Commission its duly audited financial statements, revenue account and statement of investments before presentation at its annual general meeting. Following the approval of the Commission; the insurer must publish its general annual statement of financial position, statement of profit or loss and other comprehensive income in at least two widely circulated newspapers in Nigeria. The Act also requires all insurers to submit quarterly returns in the form prescribed to the Commission not later than 10 days after the last day of each quarter or such other interval as the Commission may specify.

D. Consumer Protection Mechanisms

Section 212 of the Act introduces the Insurance Policyholders’ Protection Fund (the “Fund”) to give policyholders financial security in the event that an insurer goes bankrupt or is unable to fulfill its responsibilities.

The Fund shall comprise of:

1. 0.25% of the gross premium of income of every insurer and reinsurer; and
2. 0.25% of the balance standing in the Security and Insurance Development Fund as of December 31 of the preceding year.

The goal of the Fund is to safeguard consumers, preserve stability in the insurance sector, and boost public trust by ensuring that legitimate claims are paid in the event of an insurer’s default. Other funds in the Act include Fire Services Maintenance Fund and Road Accidents Victims Compensation Fund.

E. ECOWAS Brown Card Scheme

To ensure Nigeria’s seamless integration into the Economic Community of West African States Brown Card Scheme (the “Scheme”), the Act creates the National Bureau on the ECOWAS Brown Card Scheme (the “Bureau”). The Scheme is a motor insurance scheme that provides prompt and fair compensation to victims of motor accidents caused by visiting motorists. In line with objectives of the Scheme, the Bureau is responsible for maintaining claims for cross-border auto accidents in West Africa, ensuring adherence to ECOWAS procedures and implementing the Scheme.

F. Quicker Claim Assessment and Disbursement

The Act aims to improve the responsiveness of insurers in claims disbursement by setting out strict deadlines to ensure that policy holders promptly receive financial relief, which is often critical in emergencies such as accidents or property losses. In more specific terms, Section 210 of the Act requires all insurers to settle all claims in writing by the insured or entitled parties within the timelines specified in the Commission’s Service Charter, not later than 60 days of notification. The failure by any insurer to comply with these requirements will attract a penalty in addition to compound interest on the claim amount.

G. The Insurtech Guidelines and the Act.

In our newsletter on the Guidelines for Insurtech Operations in Nigeria, we highlighted the regulatory framework governing insurtech operations in Nigeria. While the Guidelines set out the minimum requirements for insurtechs’, the Act expands their regulatory compliance obligations. Therefore, both regulations serve as the regulatory framework for Insurtech’s in Nigeria.

H. Sanctions

Where a person transacts insurance business without holding a valid license, the Act prescribes a penalty of twenty-five million Naira (N25,000,000), two years imprisonment or both for individuals.  While in the case of companies, firms or such other combination of persons, each principal officer of the company, firm or such other combination of persons responsible shall be sanctioned to pay a fine of fifty million Naira (N50,000,000), two years imprisonment or both.

Conclusion

With the enactment of the Nigerian Insurance Industry Reform Act 2025, the Nigerian insurance industry is about to experience a massive transformation. The Act provides the much-needed regulatory clarity by establishing comprehensive consumer protection procedures, precise claim processing timelines, and stricter regulatory standards. However, the onus of compliance and enforcement of the Act rests with insurers and the Commission

Their ability to enforce compliance, embrace innovation, and deliver on the overarching objectives of the Act will ultimately determine whether the Act achieves its goal of building a stronger, more inclusive, and trustworthy insurance sector in Nigeria.

Seun Timi-Koleolu and Eniola Sogbesan

Introduction

In furtherance of its regulatory powers, the National Insurance Commission (the “Commission”) in its circular dated July 30, 2025 issued the Guidelines for Insurtech Operations in Nigeria 2025 (the “Guidelines”). The Guidelines provide a comprehensive regulatory framework for the safe, responsible, and efficient deployment of Insurtech solutions by licensed insurance entities and technology-driven firms operating in Nigeria.

Effective August 1, 2025, these Guidelines introduce key provisions—including licence categorization, minimum capital requirements, and the scope of permissible activities. which this newsletter sets out.

1.    What is Insurtech?

The Guidelines define Insurtech as follows – “Insurtech is a combination of the words “insurance” and “technology”. Insurtech refers to an institution that uses technological innovations to provide insurance services efficiently and effectively”. Accordingly, it may be inferred from the Guidelines that where technology is actively used in the delivery of insurance services, such service provider may be considered to be an Insurtech service provider.

2.   License Categorization and Permissible Activities

The Guidelines require all Insurtech service providers to obtain a license from the Commission. Under the Guidelines, Insurtech licenses are categorised into two namely; Standalone Insurtech and Partnering Insurtech.

1. Standalone Insurtech: These are entities that operate independently and offer insurance products or services directly to consumers. The Guidelines permit Standalone Insurtech to provide certain types of insurance including Health insurance, Term assurance, Motor insurance, Agric insurance and such other insurance that may be specified in its licence. The Guidelines, however, specifically exclude special risk products such as Oil and Gas Insurance, Marine and Aviation Insurance, Retire Life Annuity, and Insurances of Government Assets and Liabilities for Ministries, Departments, and Agencies from the permissible activities of Standalone Insurtech.
2. Partnering Insurtech: A Partnering Insurtech is a corporate entity that collaborates with insurance institutions to improve or complement existing operations. The scope of permissible activities for a Partnering Insurtech under the Guidelines include the following:

1. marketing and distribution of insurance products and services
2. customer services
3. policy administration
4. product management
5. claims management
6. insurance business aggregation
7. crop cutting, data collection and yield calculation
8. such other services as may be stipulated by the Commission from time to time.

While a Partnering Insurtech license is valid for 4 years, the Guidelines are silent on the duration of the license of a Standalone Insurtech. It is hoped that the Commission will proffer clarity in this respect.

3. Impermissible Activities

The Guidelines expressly prohibit an Insurtech from engaging in the following activities:

1. unlicensed insurance operations.
2. ineligible insurance business.
3. unapproved products and pricing models.
4. unsupervised automated claims rejections.
5. misleading marketing and sales practices.
6. crypto based transactions.
7. data privacy violations.
8. unapproved cross-border digital sales.
9. manipulative platform design.
10. physical marketing of insurance products and other activities that may be prohibited by extant regulations and directives of the Commission.

4. Minimum Share Capital Requirements & Annual Levy

a. Standalone Insurtech

Under the Guidelines, a Standalone Insurtech is required to maintain a minimum share capital of, the higher of:

1. N1,500,000,000 per category of general or non-life insurance business or risk-based capital determined from time to time by the Commission
2. N1,000,000,000 per category of life insurance business or risk-based capital determined from time to time by the Commission; or
3. such other amount as may be prescribed by the Commission from time to time.

b. Partnering Insurtech

In accordance with the Guidelines, a Partnering Insurtech must maintain a minimum share capital of:

1. N10,000,000 as at the date of application and shall continue to maintain the same throughout the license period and
2. professional Indemnity of not less than N100,000,000 or as may be prescribed by the Commission from time to time.

c.  Annual Levy

In addition to the share capital requirements, upon approval by the Commission, a Standalone Insurtech is required to pay an annual levy of 1% of its annual gross premium income or N5,000,000 whichever is higher. While a Partnering Insurtech is required to pay an annual levy of 1% of its annual gross commission income and remuneration fee or N500,000 whichever is higher.

5. Corporate Governance Requirements.

In line with global best practices, the Guidelines outline specific educational and professional qualifications required of senior management of Insurtechs.

a. Managing Director/Chief Executive Officer

In more specific terms, the Managing Director/Chief Executive Officer of a Standalone Insurtech is to have the following qualifications:

1. first degree in insurance or Computer Science or related fields from a recognized academic institution, or
2. proficiency certification in technology or related field from accredited training institutions, or
3. professional qualification in insurance from a recognized institution, and
4. 5 years cognate work experience or as the Commission may prescribe from time to time.

In addition, the MD/CEO is to satisfy the conditions of fit and proper persons set by the Commission and the appointment of the MD/CEO is subject to the prior approval of the Commission.

b. CTO/COO/Executive Director, Technology

The CTO/COO/Executive Director, Technology of a Standalone Insurtech is to satisfy the following qualifications:

1. hold a recognized professional qualification in insurance with not less than 10 years post qualification experience in the insurance industry, 7 of which must be at a senior management level, or
2. hold a first degree or its equivalent from a recognized institution and with not less than 15 years post qualification experience, 10 of which must be at senior management level in the Technical Department of an insurance or reinsurance company.

Additionally, the CTO/COO/ED. Tech is to fulfil the conditions of fit and proper persons set by the Commission and the appointment is subject to the prior approval of the Commission.

6. Remedial Measures & Sanctions

In accordance with its regulatory powers, the Guidelines empower the Commission to undertake remedial measures against an erring Insurtech. In more specific terms, some remedial measures the Commission may take include – intervention measures, inspection and investigation.

The Commission is also empowered to sanction any Insurtech that is in violation of the Guidelines. Some sanctions the Commission may take include:

1. cancellation of the licence granted to an Insurtech on the observation of any infraction or non-compliance with the Guidelines.
2. imposition of administrative sanctions on an Insurtech for inappropriate actions/inactions or corporate misconduct.
3. in cases of violation of the provisions of extant laws, impose administrative penalties depending on the nature and gravity of the infraction.
4. initiation of criminal proceedings against an Insurtech or any insurance institution who partners with an unlicensed Insurtech.

7. Additional Requirements

In addition to the foregoing, the Guidelines make robust provisions on matters related to standards for computer network and internet, prudential and market conduct requirements, business obligations, financial reporting and customer complaints redress mechanism.  The continuous compliance with these requirements is essential for an Insurtech to maintain its license with the Commission.

Conclusion

By recognizing the expanding role of technology and innovation in the delivery of insurance services, the Guidelines represent a proactive regulatory approach in addressing potential market expansion opportunities. With appropriate interaction between the Commission and prospective Insurtech companies, it is hoped that the Guidelines will fulfill the overarching objective of supporting Nigeria’s digital ecosystem, business and economy.

To read more on related articles, click here.

BY SEUN TIMI-KOLEOLU AND MARK IMONITIE

Introduction

Telemedicine refers to the delivery of healthcare services such as diagnosis, treatment, and prevention remotely with the use of Information and Telecommunication Technology.

The wide acceptance and adoption of telemedicine in global healthcare was accelerated by the COVID-19 pandemic. Additional factors contributing to the growth of telemedicine include technological advancement such as the increasing use of cloud technology, remote conferencing and artificial intelligence.

Telemedicine holds significant value, potential to enhance accessibility to health care services, and improving the quality of medical service delivery in Nigeria. In this newsletter, therefore, we highlight the key legal considerations that governs the practice and use of Telemedicine in Nigeria.

Regulatory Landscape

There is currently no exclusive legislation dedicated solely to telemedicine in Nigeria. Telemedicine practice intersects with multiple laws regulating healthcare, technology, data protection, licensing, and professional conduct.

The following laws regulate the practice and use of Telemedicine in Nigeria:

1. The Constitution of the Federal Republic of Nigeria (1999) [“Constitution”]

Section 37 of the Constitution provides privacy protection for all citizens in respect of their homes, correspondence, telephone conversations, and telegraphic communication.

Therefore, medical practitioners who adopt telemedicine for medical services such as consultation, diagnosis, treatments and prescriptions are obligated to ensure that utmost privacy is maintained in service delivery. Medical records, health information and the line of treatment of a patient must be kept private and confidential.

2. The Nigeria Data Protection Act 2023 (“NDPA” or “Act”)

The NDPA is a comprehensive law that provides a legal framework for the protection of personal information including the personal data of patients. The NDPA safeguards sensitive and non-sensitive patients’ data, such as medical history, laboratory test result, treatment information, clinical notes and demographic information. Healthcare service and telemedicine platform providers must therefore process the personal data of patients in accordance with the Act.

In providing telemedicine services, medical service providers are expected to comply with the NDPA by ensuring transparent data processing, and regulating cross-border transfer of patient’s data. Additionally, by the provisions of the NDPA, telemedicine platforms must register with the Nigeria Data Protection Commission (NDPC) and submit periodic compliance audits to demonstrate compliance with the law.

3. National Health Act 2014 (NHA)

The NHA provides a comprehensive framework for the regulation, development, and management of Nigeria’s healthcare system. Section 29 of NHA mandates health establishments to implement preventive control measures to prevent patients’ health records from unauthorized access. Therefore, telemedicine service providers must put adequate security measures in place to prevent unauthorized access or breach to patients’ records. Section 27 of the NHA also provides for the legal basis for which a health service provider may process the personal data of a patient.

4. Code of Medical Ethics in Nigeria 2008 (the “Code”)

The Code expressly recognizes telemedicine in Nigeria. Appendix 5 of the Code recommends the use of encryption as a security measure for the transfer of patients’ personal data. Additionally, the Code urges medical professionals to exercise caution to avoid potential legal pitfalls, particularly in areas such as maintaining patient confidentiality.

5. The Medical and Dental Practitioners Act 2004 (MDPA)

The MDPA includes measures for discipline of medical and dental practitioners found culpable of misconduct. Such misconducts may include breach of data protection rights of a patient, negligence leading to data breach or such other infractions committed while adopting telemedicine in consultation, diagnosis or treatment of patients in Nigeria.

Strategies for Ensuring Compliance in Telemedicine

To navigate Nigeria’s complex telemedicine regulations effectively, platform providers should:

• regularly update policies including implementing NDPA-compliant data privacy policies and operational documents, with clear patient consent, terms of use etc.;
• enhance data privacy and security by investing in security, registering with the Nigeria Data Protection Commission (NDPC), conducting mandatory annual audits, and filing audit reports as required;
• perform routine audits, risk and impact assessments to identify and address compliance gaps;
• train staff thoroughly on privacy rights, security protocols, and telemedicine-specific issues;
• implement risk mitigation via encryption, pseudonymization, and anonymization to protect patients’ data;
• maintain robust patient record systems to efficiently handle consultations, prescriptions, and referrals; and
• timely submit all regulatory filings, including company annual returns to the Corporate Affairs Commission (CAC) and tax returns with the Federal Inland Revenue Service (FIRS).

Licensing and Regulatory Compliance Requirements for Operating a Telemedicine Platform in Nigeria

To operate a telemedicine business in Nigeria, compliance requirements include:

1. Company Incorporation Incorporate a local company with the Corporate Affairs Commission (CAC) per the Companies and Allied Matters Act (CAMA). Foreign-owned businesses must also register with the Nigerian Investment Promotion Commission (NIPC) and obtain a business permit from the Federal Ministry of Interior.
2. .Registrations and Licensing
   Healthcare practitioners must hold valid licenses and qualifications as required by relevant Nigerian health laws. Additional permits may be needed from the Federal Ministry of Health, NAFDAC, and others based on the telemedicine model. Telemedicine facilities in Lagos State must annually register with the Health Facility Monitoring and Accreditation Agency (HEFAMAA).
3. Data Privacy and Protection
   Comply with the Nigeria Data Protection Act (NDPA), 2023 including registering with the Nigeria Data Protection Commission (NDPC) as a data controller/processor. The NDPA mandates security measures such as encryption and anonymization to protect patient data and regulate cross-border data transfers.
4. Technology Transfer
   Register any foreign technology transfers, including patents related to telemedicine, with the National Office for Technology Acquisition and Promotion (NOTAP).

Conclusion

Telemedicine substantially advances healthcare delivery in Nigeria. However, achieving sustainable growth with Telemedicine requires not only innovation but also a thorough understanding of the legal framework and regulatory requirements. By addressing the key legal considerations outlined in this newsletter, businesses and innovators can develop platforms that are both compliant with regulations and capable of making a meaningful societal impact.

Please note that the information provided herein is for general purposes only, is not exhaustive on the topic and does not constitute professional advice. For professional advice or legal counsel, please contact info@pavestoneslegal.com

BY SEUN TIMI-KOLEOLU AND PROMISE ITAH

INTRODUCTION
Nigeria faces a significant infrastructure gap across various sectors such as power, transportation, and energy. It is estimated that the country will require over $3 billion annually for the next 30 years to effectively close this gap and meet development goals. Given the limitations of public funding, project finance has emerged as a key instrument for mobilising capital to finance large-scale infrastructure projects by leveraging future revenue streams, rather than depending on public budgets or sponsor balance sheets.

At its core, project finance is predominantly structured around debt, which is sourced from different sources including commercial banks, development finance institutions (DFIs), and institutional investors.

In this newsletter, we highlight the key legal considerations for lenders involved in project finance transactions in Nigeria.

1.     Eligible Lending Licences Under Nigerian Law

Under Nigerian law, various financial licences may permit an entity to issue loans or extend credit within the country. These include state-level licences such as money lenders licence. However, in the context of project finance transactions, the requisite licenses required by institutional lenders are primarily regulated by the Central Bank of Nigeria (CBN) pursuant to the Central Bank of Nigeria Act, 2007 and the Banks and Other Financial Institutions Act (BOFIA), 2023. Common licence types include commercial banking licences, microfinance bank licences, and finance company licences, among others. For a detailed overview of the requirements for obtaining these licences, please see our newsletter here.

2.     Key Legal Considerations for Lenders

A major concern in project finance transactions is the timely repayment of loans advanced to the project. Various risks that can threaten financial recovery include construction delays, regulatory uncertainty, and operational disruptions. In view of this, it is important that lenders pay attention to certain legal and contractual considerations to mitigate these risks and safeguard loan repayment. Some of these considerations include:

a.     Foreign Exchange Controls: Foreign currency debt must comply with Central Bank of Nigeria (CBN) regulations on foreign exchange. Lenders should endeavour to obtain Certificates of Capital Importation (CCI) to ensure repatriation of repayments.

b.     Acquisition of Necessary Licenses and Permits: Securing the appropriate licenses and permits is essential for the successful implementation of most projects. Without these licenses, operations may be hindered, jeopardizing the project’s ability to generate sufficient revenue streams required to service and repay loans. Additionally, relevant planning and building approvals must be obtained for the project site to ensure full compliance with regulatory and zoning requirements.

c.      Perfection and Enforcement of Security Interests: Security interests—such as charges over assets, receivables, and contractual rights—must be duly perfected in accordance with the Companies and Allied Matters Act (CAMA) by registration at the Corporate Affairs Commission (CAC) within ninety (90) days from the date of creation of the charge. Where land is offered as collateral, additional requirements under applicable state and federal land registration laws must be complied with.

The perfection of security interests over land typically involves a three-step process: (i) payment of stamp duties, (ii) obtaining the Governor’s consent in accordance with the Land Use Act, and (iii) registration of the instrument at the relevant land registry.

Depending on the nature of the asset, security interests must also be registered at the appropriate specialized registries. For example, a mortgage over trademarks must be registered at the Trademarks Registry, while a mortgage over a vessel must be registered with the Registrar of Ships.

Perfection of security is critical to ensuring enforceability in the event of default.

d.     Adequate Contractual Provisions: Lenders must ensure that project finance agreements are meticulously structured to secure adequate oversight, risk protection, and contractual enforceability—while still allowing sponsors operational flexibility necessary for project execution. Key contractual considerations include:

• Covenant Packages: Financial and operational covenants in financing agreements should be designed to give lenders oversight while preserving the sponsor’s flexibility to manage and grow the project effectively.
• Intercreditor Agreements: Where financing structures involve multiple layers of debt—including senior, mezzanine, and subordinated facilities—an intercreditor agreement should be executed to clearly delineate the respective rights and obligations of each creditor class. The agreement should comprehensively address critical provisions such as enforcement rights and payment subordination.
• Cash Waterfall Arrangements: A transparent and enforceable mechanism should be established in the financing and project agreements to govern the allocation of project revenues. This arrangement will prescribe the order of priority for disbursements, typically as follows: (i) payment of statutory obligations, including taxes and approved operating expenses; (ii)servicing of debt obligations as per the financing agreements; (iii) funding of reserve accounts, particularly the Debt Service Reserve Account (DSRA); and (iv) distribution of residual funds to sponsors, subject to compliance with financial covenants and minimum reserve thresholds.
• Step-in Rights and Account Controls: The project documentation, including the direct agreements, financing agreement, construction contract, and operations and maintenance contract, should comprehensively outline the lender’s enforcement mechanisms and any limitations to them. These may include clearly defined step-in rights, escrow arrangements, and controls over reserve accounts.

Conclusion

As Nigeria continues to pursue large-scale infrastructure development, project finance remains a powerful tool for mobilising private capital to bridge the country’s financing gap. However, the success of any project finance transaction depends on the ability to effectively structure and manage legal and regulatory risks—particularly those that impact lenders’ rights and repayment certainty. While this newsletter outlines key legal considerations, it is not exhaustive. Lenders are therefore encouraged to seek tailored legal advice suited to the specific risks and dynamics of each project.

BY SEUN TIMI-KOLEOLU AND OMODELE FATODU

Introduction

Real estate is one of the most lucrative sectors in Nigeria, with property values in parts of Lagos appreciating by as much as 10% annually. Yet, the sector remains plagued by bureaucratic inefficiencies, lack of transparency, and widespread fraud. In a bid to combat these prevalent issues, the Lagos State Government has announced plans to tokenise real estate assets. This initiative aims to improve transparency, curb fraud, and broaden access to land ownership through digital tokens and fractionalised interests.

This initiative builds upon earlier reforms such as the development of the Electronic Geographic Information System (E-GIS) portal, which has digitised key land administration processes including title searches, land applications, and Governor’s consent. Together, these reforms reflect a strategic push by the Lagos State Government to modernise land governance and address long-standing inefficiencies and fraud within the property market.

However, while the initiative is commendable in its ambition and potential benefits, it raises some key points of interest. This article examines the key legal and regulatory considerations arising from the Lagos State tokenisation initiative.

1.     The Legal Status of Tokenised Land

Tokenisation refers to the process of converting rights to a physical asset such as land or property into a digital token that can be stored, transferred, or traded on a blockchain. These tokens may reflect full or fractional interests and can be transferred via smart contracts.

However, under the Land Use Act 1978 (LUA), all land in each state is vested in the Governor, who may grant rights of occupancy subject to consent and registration requirements. A valid transfer of an interest in land must be evidenced by registered instruments such as Certificates of Occupancy or Deeds of Assignment, duly recorded at the appropriate land registry.

Current Nigerian law does not recognise digital tokens as valid instruments for proving title or transferring proprietary interests in land. Governor’s consent and formal registration remain mandatory, and the LUA does not accommodate tokenised instruments as substitutes for traditional title documents.

As a result, such tokens may, at best, reflect beneficial or contractual interests, but not confer enforceable legal ownership. Until legislative reform formally integrates digital tokens into Nigeria’s land law framework, tokenised real estate will remain largely symbolic and lack the capacity to confer legal title.

2.     Blockchain as a Tool for Fraud Prevention

Land fraud remains one of the biggest issues in Nigeria’s property sector. Incidents such as multiple sales of the same parcel, forged documents, impersonation, and disputes over unregistered interests are frequent and often lead to prolonged litigation.

Blockchain technology, if effectively integrated with state land registries, offers significant potential to address these issues. It enables the creation of tamper-proof and timestamped records of title and transaction history, making document forgery and unauthorised alterations exceedingly difficult. Blockchain also supports real-time verification of property records, allowing prospective buyers, financial institutions, and regulators to confirm ownership status without relying solely on manual registry checks.

When combined with automated smart contracts that enforce agreed transaction terms, blockchain can significantly reduce risks in land transactions, deter fraud, and foster greater confidence in Nigeria’s real estate market.

3.     Regulatory Treatment of Tokens and Virtual Assets

The Investments and Securities Act (ISA) 2025 establishes a new legal foundation for the regulation of digital and virtual assets in Nigeria. Under the Act, virtual tokens may be classified as securities, bringing them within the regulatory oversight of the Securities and Exchange Commission (SEC).

The SEC is authorised to regulate Virtual Asset Service Providers. Platforms offering tokenised real estate must comply with applicable requirements, including disclosure obligations, Know-Your-Customer (KYC) protocols, Anti-Money Laundering (AML) measures, and investor protection standards.

A crucial distinction must be made between the legal treatment of tokenised interests under property law and under securities regulation. While tokenised assets may not confer legal title to land under the LUA, they may still be treated as securities under the ISA if they represent economic interests in real estate.

As a result, tokenised real estate may be subject to investment regulation, even though it is not yet recognised as a valid form of land ownership.

4.     Smart Contracts and Legal Enforceability

Smart contracts are code-based agreements that automatically execute once predefined conditions are met. In the context of tokenised real estate, they may be used to transfer fractional interests upon verification of payment, thereby reducing transaction costs, delays, and the risk of default.

The legal enforceability of smart contracts under Nigerian law however,  remains unresolved. Unlike traditional contracts, smart contracts are typically formed without written terms, signatures, or explicit provisions for dispute resolution. This raises doubts about whether they meet the legal requirements for valid contracts, particularly in high-value real estate transactions.

Core elements such as offer, acceptance, consideration, and the intention to create legal relations may be difficult to establish where the agreement exists only in code. Furthermore, Nigerian courts and statutes have not yet recognised smart contracts as enforceable, nor is there legal precedent or guidance confirming that automated transactions satisfy the formalities required under Nigerian contract law.

5.     Coordination Across Legal and Regulatory Sectors

Tokenisation intersects with several regulatory sectors, including land administration, financial regulation, data protection, and digital infrastructure. Effective implementation will require deliberate coordination among key stakeholders. The Lagos State Lands Bureau and the Office of the Surveyor-General must work closely with the National Information Technology Development Agency and the Ministry of Science and Technology to ensure technical alignment and policy cohesion. Similarly, the Nigerian Data Protection Commission will need to address data protection risks associated with blockchain deployments, particularly under the Nigerian Data Protection Act 2023. The SEC must also play a central role in clarifying how tokenised assets are classified and regulated within the securities market.

At present, there is no unified legal framework that governs tokenised real estate. This gap results in uncertainty about whether tokenised land assets should be treated as securities, commodities, or property, and raises questions about how they interact with existing property registration laws and land use regulations.

Conclusion

The tokenisation of real estate represents a significant opportunity for Lagos State and the broader Nigerian economy. It has the potential to improve transparency, expand access to land ownership, and drive both foreign and local investments into the economy. Technology startups can build solutions around smart contract management, property trading platforms, and digital land registries while investors, both local and foreign, can enjoy new attractive investment options such as fractionalised ownership and digital property trading.

A coordinated policy approach involving legislators, regulators, and the judiciary will be essential to ensure that innovation is underpinned by enforceable rights, legal protections, and a reliable legal and regulatory framework.

Click here for our review on the Lagos State Real Estate Regulatory Law 2021