Financial Services – Goldsmiths Solicitors Nigeria

Investing in Nigeria 2026: A Strategic Legal Roadmap for Foreign Businesses

Shola Adekunle — Fri, 04 Sep 2026 12:44:00 +0000

Introduction

As of 2026, Nigeria’s regulatory landscape has undergone its most significant transformation in over two decades. With the enactment of the Nigeria Tax Act (“NTA”) 2025 and the Nigeria Tax Administration Act (“NTAA”) 2025 which took effect on 1 January 2026, companies can no longer easily exploit legal loopholes. For foreign investors, the message is clear: success in the Nigerian market now requires compliance-by-design rather than addressed only when regulatory issues arise. The new architecture, anchored by the NTA, NTAA and the Investments and Securities Act (“ISA”) 2025, moves Nigeria toward a unified and digitally integrated regulatory strategy. This article highlights six important legal considerations every foreign business should understand before establishing or expanding operations in Nigeria in 2026.

Market Entry and Corporate Structuring

Foreign investors intending to establish business in Nigeria are required to determine the appropriate corporate structure through which their business activities will be undertaken. The appropriate structure will depend on the nature of the proposed business, the extent of the investor’s physical presence in Nigeria, applicable sector-specific requirements and the tax implications of the proposed activities. Under the Companies and Allied Matters Act 2020 (“CAMA”), a foreign company incorporated outside Nigeria that intends to carry on business in Nigeria is generally required to incorporate a separate Nigerian entity before commencing business activities in Nigeria, subject to applicable statutory exemptions. A foreign investor may therefore establish a Nigerian subsidiary through which its business activities will be conducted. Following incorporation, a company with foreign participation is required to register with the Nigerian Investment Promotion Commission (“NIPC”) before commencing operations.

Minimum Capital Requirements

CAMA provides a general minimum issued share capital of ₦100,000 (One Hundred Thousand Naira) for private companies and ₦2,000,000 (Two Million Naira) for public companies. However, companies with foreign participation are subject to a higher minimum paid-up capital of ₦100,000,000 (One Hundred Million Naira) as mandated by the Federal Ministry of Interior’s Revised Handbook on Expatriate Quota Administration 2022, which has been actively enforced by the CAC since 2023. Notwithstanding the foregoing, the applicable minimum capital requirement may also depend on the nature of the proposed business. Companies operating in regulated sectors, including banking, insurance, aviation and capital markets, may be subject to significantly higher minimum capital requirements prescribed by the relevant sector regulator. Investors should therefore determine the applicable minimum capital requirements before incorporating the Nigerian entity, and ensure that the company’s capitalisation is consistent with the requirements applicable to its proposed business activities.

Tax Compliance and Incentives

Nigeria operates a multi-layered tax system spanning federal, state and local obligations. The Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, and the Nigeria Revenue Service (Establishment) Act 2025 centralised the federal tax collection to reduce fragmented administration.

Corporate taxes are within the remit of the Federal Government and administered by the Nigerian Revenue Service (NRS). It is therefore important for companies upon incorporation to register with NRS for corporate tax purposes and obtain their Tax Identification Number (TIN) and remit their taxes including value added tax (VAT), Companies Income Tax (CIT), etc. as at when due to avoid regulatory sanctions.

Non-resident companies planning to operate in Nigeria should begin by carefully assessing whether their proposed activities will create a permanent establishment or significant economic presence, as this determines Companies Income Tax liability and the need for registration with the Nigeria Revenue Service. They must also identify potential withholding tax obligations on payments, VAT requirements and transfer pricing considerations, while checking possible relief under applicable double tax treaties, so that the correct compliance framework is established from the outset.

To achieve proper tax compliance, intending companies should register promptly, maintain accurate records of all transactions, and meet statutory filings and payment deadlines. Engaging a qualified local tax adviser early in the process is the most effective way to navigate NRS requirements, stay updated on any legislative changes, and ensure smooth, penalty-free operations once business activities commence.

Nigeria continues to offer a range of incentives available for investments in specific sectors or businesses which are designed to encourage capital inflows and industrial development, including Economic Development Incentive, Free Trade Zone incentives, Export Expansion Grant schemes, sector-specific fiscal incentives, and investment protection under applicable bilateral investment treaties. Alongside these incentives, foreign investors and businesses should develop appropriate legal risk management strategies, effective dispute resolution mechanisms, and comprehensive due-diligence practices before committing capital or commencing operations in Nigeria.

Foreign Exchange Compliance:

Foreign investors should give careful consideration to Nigeria’s foreign exchange requirements when bringing capital into the country. A foreign company investing in Nigeria must bring in its capital through an authorised dealer bank and ensure the bank issues a Certificate of Capital Importation (CCI) for every inflow. The CCI is the official document that confirms the capital was imported in accordance with Central Bank of Nigeria’s (CBN) foreign-exchange regulations. It is also particularly important for facilitating the repatriation of eligible capital, dividends, profits and other returns through the Nigerian banking system, subject to applicable foreign exchange rules and documentation requirements. The company must therefore open or maintain an account with a licensed bank, submit all required supporting documents, and insist that the bank processes and issues the CCI promptly (usually within 24 to 48 hours) after the funds or assets arrive.

Read the full update or download the PDF here.

What The Virtual Assets Coordination Order Means For Digital Assets Operators

Shola Adekunle — Mon, 24 Aug 2026 08:34:42 +0000

INTRODUCTION

The coming into force of the Investments and Securities Act 2025, which repealed the Investments and Securities Act 2007, marked significant changes to the regulatory framework applicable to virtual and digital assets in Nigeria. Virtual and digital assets are now recognized as securities, and the businesses involved in activities relating to such assets falls within the regulatory purview of the Securities and Exchange Commission (SEC). The implications of this reclassification for issuers, exchanges and the wider public have been discussed in previous articles. It has, however, become clear that this is only one aspect of the evolving regulatory framework applicable to digital-asset businesses in Nigeria. Three separate regulatory tracks, an executive coordination order, an increase in the capital requirements prescribed by the SEC, and a bill currently before the Senate have, over the past eighteen months, further shaped the regulatory framework applicable to digital asset businesses in Nigeria.

A SINGLE INSTRUCTION: WORKING FROM THE SAME PLAYBOOK

On 17 July 2026, the Nigerian president signed the Executive Order on Virtual Assets Coordination 2026, which took effect immediately. Rather than establishing a new regulator, the Order provides for greater coordination, among the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) and the newly constituted Nigeria Revenue Service in relation to the licensing, supervision and enforcement of virtual asset activities through a Virtual Asset Council, chaired by the CBN, with a Virtual Asset Office established within the CBN to serve as its secretariat. The Order is intended to address regulatory gaps that may be exploited by fraudsters and unlicensed platforms and to strengthen measures relating to money laundering, terrorism financing and tax compliance, without imposing an additional licensing requirement on operators beyond the requirements under the Investments and Securities Act 2025 and the SEC’s applicable rules. For operators, the Order further emphasises the need for regulatory compliance across the various applicable regulatory frameworks, particularly as increased information sharing among the CBN, SEC and tax authorities may result in inconsistencies in regulatory filings, banking records and anti-money laundering monitoring being identified and acted upon.

Two further workstreams under the Council remain relevant to the evolving regulatory framework.

The Central Bank of Nigeria has now opened applications for Cohort 2 of its Regulatory Sandbox Programme between (12–31 August 2026). The programme includes a dedicated Virtual Asset Service Provider (VASP) track that enables eligible operators to test virtual-asset, stablecoin, custody, wallet and related payment solutions under regulatory supervision before full deployment. Participation does not constitute a licence or authorisation to operate outside the approved testing parameters.
In parallel, the Nigeria Revenue Service has issued detailed Guidelines on the Taxation of Virtual Assets 2026. The guidelines establish a clear administrative framework intended to facilitate voluntary compliance and provide greater visibility into revenue derived from digital asset activities.

Operators developing product roadmaps for the next financial year should take both developments into account. While the sandbox and tax guidelines provide greater clarity than previously available, further regulatory guidance and refinements are still expected.

THE REVISED MINIMUM CAPITAL REQUIREMENTS FOR DIGITAL-ASSET OPERATORS

The January 2026 Circular preceded the above Order. In January 2026, SEC issued Circular No. 26-1, which revised the minimum capital requirements applicable to participants in the capital market and significantly increased the capital requirements applicable to digital-asset operators. Digital Asset Exchanges and custodians are now required to maintain a minimum capital of ₦2 billion, representing an increase from the previous threshold of ₦500 million. Digital Asset Offering Platforms are required to maintain a minimum capital of ₦1 billion, while ancillary virtual asset service providers are required to maintain a minimum capital of ₦300 million. Affected operators have until 30 June 2027 to comply with the new capital requirements. The revised capital requirements are intended to strengthen the financial capacity of firms involved in activities relating to digital assets and enhance the protection of client assets.

BANKING ACCESS AND SEC LICENSING REQUIREMENTS

None of the above developments changes the regulatory position that has applied since December 2023, under which digital-asset businesses are required to obtain a SEC licence before accessing banking services in Nigeria. The CBN’s Guidelines on the Operation of Bank Accounts for Virtual Assets Service Providers, which reversed the CBN’s earlier prohibition on banks servicing crypto businesses, permit banks to open designated accounts only for SEC-licensed operators and subject to conditions including dedicated settlement accounts, transaction limits and enhanced customer due diligence. Such operators also remain subject to the applicable anti-money laundering requirements. The coordination mandate of the Virtual Asset Council further strengthens this regulatory framework, particularly as banks may be required to ensure that the SEC licensing and capital requirements of digital-asset operators remain valid and up to date.

Read the full update or download the PDF here.

After The Extension: A Data Protection Playbook For Banks & Fintechs

Shola Adekunle — Mon, 17 Aug 2026 06:30:54 +0000

Data protection compliance in Nigeria has moved beyond simply having a privacy policy or obtaining consent from customers. The Nigeria Data Protection Act 2023 (NDPA) established the Nigeria Data Protection Commission (NDPC) and created a comprehensive statutory framework for the protection of personal data. The General Application and Implementation Directive 2025 (“GAID” or “Directive”), which took effect on 19 September 2025, turned this Act into the documented, auditable programme that now governs every Data Controller and Processor of Major Importance in the country. For banks and FinTechs, data protection compliance is therefore not simply another legal or IT issue. It is a governance, operational and reputational issue that should be receiving attention across all leadership cadres.

The Compliance Deadline

The NDPC originally set 31 March 2026 as the deadline for filing the 2025 Compliance Audit Return (CAR), the annual filing through which Ultra-High and Extra-High Level registrants demonstrate to the Commission that their data protection framework is actually operating rather than merely documented. Following representations from stakeholders, the Commission extended that deadline to 30 May 2026^[1]. That extended deadline has now also passed. The GAID requires the audit process to address matters including lawful bases for processing, legitimate-interest assessments, data-subject rights, data-security measures, cross-border transfers and breach notification.

For organisations that filed their CAR on time, the filing should not be treated as the end of the compliance exercise. Rather, the audit trail submitted in May is now the baseline the NDPC will measure future conduct against. For organisations that missed the deadline, the issue should not simply be left unresolved. The GAID provides for an administrative penalty for late filing, in addition to the applicable CAR filing fee.

The practical approach is therefore to assess the reason for the delay, determine the applicable consequences and take steps to regularise the organisation’s compliance position.

Rethinking Consent

One of the most common data-protection mistakes financial institutions make, is treating consent as the default lawful basis for processing personal data. Consent is important, but it is not the only applicable or appropriate legal basis for every processing activity. The NDPA recognises several lawful bases for processing personal data. These include consent, performance of a contract, compliance with a legal obligation, protection of vital interests, performance of a task carried out in the public interest and legitimate interests. The GAID also provides guidance on legitimate-interest assessments and expects organisations relying on legitimate interests to properly assess and document that basis. Financial institutions are required to identify the lawful basis that genuinely supports each processing activity rather than merely asking for or relying on consent because it is familiar. This requires financial institutions to move beyond generic privacy notices and actually map their processing activities to the appropriate lawful bases.

The Role of the Data Protection Officer

The Directive mandates the appointment of a Data Protection Officer (DPO). The DPO is expected to have appropriate independence, access to relevant processing activities and sufficient resources to perform the role effectively. Banks and Fintechs are advised against folding this role into an existing legal or compliance title without giving it the independence or the resourcing the Directive actually requires. A DPO who is responsible for identifying data protection failures must have sufficient independence to raise those concerns and sufficient access to understand how personal data is actually being processed within the organisation. The GAID also provides for an annual credential assessment process for DPOs, including continuing professional development and inclusion in the Commission’s relevant database.

Cross-Border Data Transfers

Modern banking and FinTech operations rarely operate entirely within one country. As a result, Nigerian customers’ personal data may be transferred to, accessed from or processed in another jurisdiction. . The NDPA and GAID regulate cross-border transfers of personal data and provide recognised mechanisms and lawful grounds for such transfers. The practical problem for many institutions is not necessarily that there is no legal basis for a particular transfer. The problem is that the organisation may be unable to clearly explain what that basis is and where the supporting documentation is. An institution using offshore cloud hosting for its core banking platform, or routing customer data through an international payment processor, should therefore not wait for a regulatory enquiry before being able to clearly explain what the legal basis for a particular data transfer is and where the supporting documentation is.

Read the full update or download the PDF here.

Data Localisation: What the New Payments Circular Means for Banks & Fintechs

Colin Egemonye — Mon, 20 Jul 2026 07:45:49 +0000

Nigeria’s digital payments sector grew faster than the regulatory architecture that has been built around it. Electronic transaction volumes have increased, mobile money adoption has grown and a few switching, processing and payment solutions providers are at the center of how money moves around the country. The Central Bank of Nigeria concluded that this growth created risks that its rules were not designed to deal with and in June 2026, issued a new circular focusing on data localisation, market concentration & ownership transparency in the payments sector titled “Introduction of Market Structure Requirements, Data Localisation, Ultimate Beneficial Ownership Disclosure, and Systemic Oversight Measures in the Nigeria Payments System” (the “Circular”). The Circular is issued by the CBN Payments Systems Supervision Department and was sent out to deposit money banks, microfinance banks, mobile money operators, switching and processing companies, and other licensed participants in the digital payments sector. It imposes three different sets of obligations with their own compliance timelines and real implications for how banks & fintechs structure technology, ownership and market activity in Nigeria going forward.

Data localisation – payment transaction data must be stored in Nigeria from 1 January 2027

All entities that process payments within Nigeria are required from 1st January 2027 to store and manage payment transaction data generated in Nigeria within Nigeria in accordance with Nigerian data protection laws. The requirement hits hardest institutions that already use offshore cloud infrastructure or cross-border data processing arrangements. For many of them, full compliance will mean new local data centre relationships/renegotiated cloud contracts and a planned data migration/migration plan. The requirement has been framed by the CBN as regulatory visibility, consumer protection and lowering operational risk of offshore data storage. It supplements, not replaces, obligations imposed by the Nigeria Data Protection Act 2023.

Market structure limits – concentration caps on card issuing and merchant acquiring

The Circular introduces concentration limits intended to prevent a small number of dominant operators from controlling multiple critical functions within the payments value chain. An institution with more than 25% of the card-issuing market cannot also own more than 15% of the merchant-acquiring market – and this is in reverse. Affected institutions are required to submit a monthly market share report to the CBN, which must be in full compliance by 31st December 2026 (this is earlier than the data localisation deadline & should be treated as an earlier priority for institutions assessing exposure under the circular).

Ultimate beneficial ownership disclosure

The Circular requires that payment system participants identify the ultimate beneficial owners of large shareholders in a way that aligns the payments supervisory framework with existing anti-money laundering and counter-terrorism financing obligations. This sits alongside and reinforces beneficial ownership register requirements for Nigerian companies in general under CAMA 2020, but it applies that requirement to the CBN in its direct supervisory relationship with the payment institutions.

Enforcement

The CBN said it will monitor compliance with this Circular closely and may levy supervisory sanctions against institutions that do not meet its requirements under applicable laws, regulations and guidance. For an industry that has so far exercised relatively light-touch oversight of things like data residency and ownership transparency in particular, this is one of those more consequential infrastructure and governance initiatives the CBN has made over the last few years in the payments space.

Read the full update or download the PDF here.

DFI Lending in Nigeria: What Every Borrower Must Know Before Signing

Kingsley Anyiam — Mon, 18 May 2026 10:33:30 +0000

Lending from development finance institutions such as the International Finance Corporation, African Development Bank, Proparco, and German Development Finance Institution, DEG, and other multilateral and bilateral development finance institutions is becoming more accessible to Nigerian businesses across sectors. There may be longer tenors, attractive pricing, or even a strategic partnership that adds credibility and capital.

However, borrowers should be aware that DFI loans are not commercial bank loans. They come with conditions, obligations and consequences that many Nigerian borrowers are not prepared for when they enter the facility agreement.

In this article, we identify the five most critical areas where DFI lending most often cause problems for Nigerian borrowers and what every borrower should know before signing.

ENVIRONMENTAL AND SOCIAL COMPLIANCE

Every major development finance institution lends under an Environmental and Social (E &S) framework – IFC Performance standards are the most common and most widely used directly (for IFC loans) or by reference (for many bilateral DFIs and funds that use IFC Standards as their benchmark). Respecting the applicable E & S framework is an obligation that goes beyond drawdown alone – it is an ongoing obligation throughout the life of the facility.

Specific E & S obligations that Nigerian borrowers most commonly fail to meet are: preparation and maintenance of an Environmental and Social Management System (ESMS) meeting the relevant performance standard; community and stakeholder engagement in accordance with DFI requirements; and reporting of adverse E1and1S incidents to the lender within specified timeframes.

Breach of E & S covenants is a default under most DFI facility agreements and DFI lenders have accelerated loans on E & S grounds. This is not a theoretical risk. By signing DFI facility agreements without understanding the E & S obligations, they are taking on a material default risk that is unrelated to their financial performance.

REPORTING OBLIGATIONS

Many times, DFI facility agreements place reporting obligations that are far more stringent than equivalent provisions in Nigerian commercial bank facilities. The typical requirements for borrowers are: an annual audited financial statement prepared under specific accounting standards (usually IFRS); quarterly management accounts are included within specified periods of each quarter; annual E & S compliance reports based on the applicable performance standard, verified by an independent E & S consultant; annual conformity certificates from the directors of the borrower show compliance with all financial and non-financial covenants. Events of default, material adverse change, or material litigation shall be made promptly known.

This creates a significant management burden that is often not realised until the first annual report cycle when the borrower is already in breach of its reporting obligations. More management time, external audit costs, and consultant costs related to DFI reporting should be budgeted by Nigerian businesses using the facility for the first time.

RESTRICTIONS ON DIVIDENDS AND RELATED-PARTY TRANSACTIONS

Restrictions on dividends and related-party transactions are typically contained in financial covenants in the loan facility agreements. Those restrictions protect the lender and they prevent value being stripped from the borrower in ways that impair its ability to service its debt obligations but they also have big commercial implications for borrowers and their shareholders.

These are some of the restrictions that Nigerian borrowers should pay attention to: dividend lock-up provisions – which may stop dividend payments entirely or limit them to a percentage of distributable profits; related-party transaction restrictions – typically, DFI approval is required for all transactions between the borrower and its affiliates that exceed a certain threshold; restrictive capital expenditure rules that may prevent the borrower from making new investments without lender consent; and they place restrictions on debt incurrence that prevent the borrower from taking on additional financial indebtedness above some level.

Read the full update or download the PDF here.

Embedded Finance in Nigeria – What Every Bank-Fintech Partnership Needs

Emmanuel Amadi — Wed, 13 May 2026 10:57:31 +0000

By integrating financial services products into non-financial platforms and business models, embedded finance is changing the Nigerian financial services landscape faster than the regulatory and legal frameworks that govern it. Several banks are distributing financial products through digital channels using FinTech. The fintechs are leveraging bank APIs to deliver services that were once available only to licensed financial houses. Retailers, logistics companies and software companies are integrating payments, lending and insurance into their customer experiences.

This has huge commercial potential. Legal risks are also real and not adequately managed in most bank-finance partnership arrangements we review. Five key legal requirements that every embedded finance partnership in Nigeria must meet before the arrangement goes live are laid out in this article.

REGULATORY APPROVALS

The CBN must sign off on every bank-financed arrangement in Nigeria. As well as the Central Bank of Nigeria’s framework for the regulation and supervision of FinTech companies and its guidelines on third-party service provider arrangements, there are bank-finTech partnerships that operate outside these requirements and are subject to regulatory sanctions for both parties.

Before any embedded finance arrangement is structured, the key regulatory questions are: Should it have its own CBN license for what it does in the partnership, or is it using the bank’s license? When is the bank authorised to operate the FinTech? So has the arrangement been disclosed to the CBN as required by those guidelines? Which party has ongoing reporting obligations in relation to embedded finance activity?

A partnership agreement that leaves these questions unanswered or that fails to get regulatory approvals does not create regulatory exposure. It may also be unenforceable in Nigerian law if it requires either party to do something that is not permitted by its licence.

LIABILITY ALLOCATION

The most commercially sensitive and often overlooked element of bank-finance partnership agreements in Nigeria is liability allocation. Whether or not a transaction fails, a customer is damaged, or a regulation is broken, the question of who pays has to be settled before the event, not during it.

So the specific liability scenarios that need to be covered in every embedded finance partnership agreement are: technology failures; who is liable for system downtime, failed transactions and data errors that affect customers? Who is responsible for customer harm caused by embedded financial products? AML/KYC failures; Who should be vetting the customer and checking that the transaction is not being used for money laundering or terrorist financing? If the embedded finance arrangement breaches CBN guidelines; who pays the regulatory and financial costs?

The right answer to each of these depends on who controls the technology, interacts with customers, holds the license, and can prevent the failure. Not acceptable is an agreement that is silent on these questions or that places liability resolution in a post-event dispute process.

DATA SHARING & NDPA COMPLIANCE

Embedded finance relationships necessarily involve sharing customer financial and personal data between the bank and the non-financial platform. All such sharing is governed by the Nigeria Data Protection Act 2023 (NDPA) and specifically facilitated by the CBN’s Operational Guidelines for Open Banking in Nigeria (2023) which states a clear legal basis before the partnership launches and each data sharing arrangement must have a legal basis before the partnership goes live.

Specifically, embedded finance partnerships require a lawful basis for each type of data shared – consent, contract, legitimate interest, or other basis appropriate to the data and sharing arrangement; a data processing agreement between the bank and the FinTech outlining the processing, security requirements, data retention, and obligations in case of data breach – the bank will be a data controller for regulatory reasons, but the contractual relationship must be clear; and a customer disclosure framework that informs customers at the point of engagement what data will be shared and used under the arrangement.

In embedded finance arrangements data ownership becomes a commercial issue as well as a regulatory one. Data generated by embedded finance is of great commercial use – for product development, credit risk assessment, and targeted offers. Clauses regarding who gets to own, use, and commercialise the data are among the most commercially critical elements of any bank-finance partnership agreement.

Read the full update or download the PDF here.

Nigerian Lending – Perfection. Banks and Borrowers Keep Making These 5 Mistakes

Colin Egemonye — Wed, 15 Apr 2026 10:37:52 +0000

There is no loan facility stronger than the security that underlies it. Any bank that doesn’t properly secure its assets is not a secured creditor. And a borrower that does not understand its perfection obligations might find that its representations to its lender were false. These are five security perfection mistakes we see often and every party involved in a Nigerian credit transaction needs to know about them.

Unregistered Charges at the CAC

Charges by a Nigerian company over its assets must be registered with the CAC within 90 days under the Companies and Allied Matters Act 2020. An unregistered charge is void against a liquidator, administrator, or any other creditor, so the secured lender is essentially on par with all other unsecured creditors in an insolvency or enforcement situation.

We know this is a requirement, but it is often not met, especially in transactions where several parties move very quickly, where the borrower’s lawyers are doing all the perfecting without the lender being involved in the process, or where post-closing perfection undertakings are given but never enforced.

A documented perfection checklist, under lender counsel supervision, with CAC registration evidence gathered and verified before drawdown – that’s the solution. The principle is simple: There is no registration and there is no drawdown.

Missed or Incorrect Stamp Duty

Loan agreements, debentures and mortgages in Nigeria are subject to Stamp Duty. In Nigerian courts, an unstamped or inadequately stamped document is not admissible as evidence. The document does not disappear; the parties remain obligated to each other. It removes the possibility that those obligations can be enforced in courts.

In many cases, the stamp duty position on complex instruments such as debentures with multiple asset classes, syndicated facilities with multiple lenders, and cross-border security packages is not clear, and Nigerian stamp duty law has not kept up with the pace of modern lending transactions. Lenders and their advisers should not rely on precedent or think that what was accepted in a previous transaction will be accepted here. Specific advice on the position of each instrument before execution is the standard.

DEFECTIVE DEBENTURES

Debentures with defects create both fixed and floating charges on a company’s assets. But the scope and enforceability of those charges depends entirely on how the debenture is written – and badly written debentures are very common in Nigerian lending transactions.

The most common defects are:

It fails to mention the asset classes that bear the primary security value.
Use of ambiguous descriptions of charged assets.
Not including important provisions for the crystallization of the floating charge into a fixed charge.

Debenture provisions that violate the company’s articles of association are unlikely to be fit for purpose. That goes for FinTechs, technology companies and businesses whose assets are intangible.

Read the full update or download the PDF here.

Goldsmiths Solicitors – Legal Recap for the Year 2025

Colin Egemonye — Fri, 19 Dec 2025 12:27:42 +0000

Introduction

2025 was a very exciting year and saw significant changes in Nigeria’s legal and regulatory landscape. Series of laws were enacted by the National Assembly and regulatory guidelines were also issued by regulators including the Central Bank of Nigeria, Federal Competition and Consumer Protection Commission, the Nigerian Communications Commission, etc. There were also some important judicial decisions from the courts in Nigeria which shaped the legal and regulatory space in the country. This recap is divided into four parts representing the four quarters of the year, highlighting what we think are the most impactful laws and regulations, reforms, and judicial decisions in 2025.

1st Quarter (January – March 2025)

The first quarter was significantly marked by the issuance of guidelines and regulations from regulators and key judicial decisions by the courts. The Central Bank of Nigeria issued guidelines to suspend the extension of export proceeds and also announced the approval of the Nigerian Foreign Exchange (FX) Code. Key decisions which shaped the tax landscape and also affirmed the multi-sectoral regulatory authority of the Federal Competition and Consumer Protection Commission 9FCCPC) were delivered by the courts. The Investment and Securities Act, 2025 was also signed into law by the Nigerian President.

• The implementation of the Deduction of Tax at Source (Withholding) Regulations, 2024 began on 1st January 2025 requiring corporate entities, statutory bodies, public authorities, etc. to deduct withholding tax at source from 1st January 2025.
• On 8 January 2025, the Central Bank of Nigeria (CBN) issued a circular on the Suspension of Extension of Exports Proceeds on Behalf of Exporters for the immediate suspension of approvals for the extension of repatriation of export proceeds on behalf of exporters mandating that proceeds for non-oil exports must be repatriated and credited to the exporters’ domiciliary accounts within 180 days and for oil and gas exports, within 90 days from the date of the bill of lading.
• On 11th January 2025, the Presidential Enabling Business Environment Council announced that it would establish commercial courts and Ease of Doing Business Councils across all 36 states and the Federal Capital Territory as part of its effort to improve the country’s business climate.
• On 22nd January 2025, the CBN announced the approval of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian Foreign Exchange Market.
• 0n 24 January 2025, in a circular titled “Waiver of Non-Refundable Annual License Renewal Fee for Existing Bureaux De Change”, the CBN announced the waiver of payment of annual renewal fee for existing bureau de change (BDC) operators due to transition into the new BDC regulatory structure required by CBN.
• On 27 January 2025, the Federal High Court (FHC) in the appeal between Federal Inland Revenue Service v. MTN Nigerian Communications Plc (FHC/L/1A/2024), set aside the judgement of the Tax Appeal Tribunal (TAT) which awarded the sum of $71 million against MTN while declining the reliefs for penalties and interest sought by FIRS. The FHC increased the liability and ordered MTN to pay $87.9 million as penalties and interest.
• On 28 January 2025, the Collective Management Regulations, 2025 was issued by the Nigerian Copyright Commission and repealed the Copyright (Collective Management Organisation) Regulations, 2007. The Regulations provide for the approval and supervision of companies seeking to operate as a Collective Management Organisation (CMO) and their relationships with users and other CMOs, etc. The Regulations impose administrative fines ranging from N200,000 t0 N500,000 for unethical practices and non-compliance with the Regulations. Other sanctions include caution, suspension or disqualification.
• On 3 February 2025, the National Pencom Commission issued the Revised Circular on the Operations of Branch Offices and Service Centres by Licensed Pension Fund Administrators. The circular was issued to give effect to section 72 of the Pension Reform Act, 2014 and provides the metrics for requiring the opening and operation of branches and service centres by Pension Fund Administrators in Nigeria.
• On 7 February 2025, the Federal High Court in Emeka Nnubia v. Minister of Industry, Trade and Investment, Federal Competition and Consumer Protection Commission & Anor in Suit No: FHC/L/CS/1009/2024 affirmed the Federal Competition and Consumer Protection Commission (FCCPC) as the primary regulator for competition and consumer protection issues in all sectors in Nigeria including the telecommunications sector.
• On 12 February 2025, the Federal Ministry of Interior issued a circular on the Review of Approving Authority for Expatriate Quota and Citizenship Applications. The review was done to enhance transparency and accountability in the administration of Expatriate Quota and Citizenship applications.
• On 4 March 2025, the first Mobile Virtual Network Operator (MVNO) to be licensed by the Nigerian Communications Commission (NCC) launched and commenced operations in Nigeria.
• On 13 March 2025, the Court of Appeal in Kuda Microfinance Bank Ltd v. Amarachi Kenneth Blessing (CA/EK/48/2024) held that a bank may lawfully restrict a customer’s account upon receiving reports of fraudulent or suspicious activity without the need to first obtain a court order.
• On 20 March 2025, the Nigeria Data Protection Commission issued the Nigeria Data Protection Act General Application and Implementation Directive, 2025 (hereinafter “the GAID). The GAID was issued to provide clarity and practical guidance on the implementation of the NDPA. It repealed the Nigeria Data Protection Regulation, 2019 and the Nigeria Data Protection Regulation Implementation Framework, 2020.
• On 29 March 2025, the Nigerian President, signed the Investment and Securities Act, 2025 into law. The Act repealed the Investment and Securities Act, 2007 and it is aimed at strengthening the legal and regulatory framework for investments and capital market activities in Nigeria. The Act classified exchanges into composite and non-composite exchanges and also legally recognised virtual assets bringing an end to the uncertainty concerning transacting virtual assets in Nigeria.

2nd Quarter (April – June 2025)

The second quarter saw a lot of regulatory actions from regulators in the exercise of their regulatory powers and functions. Laws were also enacted in this quarter. The Securities and Exchange Commission issued a circular on the transmutation of executive directors and the Nigerian Immigration Service (NIS) issued guidelines for the purpose of implementing e-visa system, automated landing and exit cards in Nigeria. Four Nigerian tax laws were enacted to unify tax laws and revolutionize tax collections and enforcement in Nigeria.

• On 6 April 2025, the Registrar General of the Corporate Affairs Commission, announced the launch of an AI-driven Intelligent Company Registration Portal (ICRP) to revolutionize business registration in Nigeria and improve ease of doing business in Nigeria.
• On 25 April 2025, the Competition and Consumer Protection Tribunal upheld the $220 million penalty imposed on Meta platforms Incorporated (Facebook and WhatsApp) by the Federal Competition and Consumer Protection Commission (FCCPC) for data discriminatory practices in Nigeria and ordered for the payment of $35,000 as reimbursement for FCCPC’s investigation expenses. Part of the orders made by the Tribunal against Meta Platforms Incorporated include to immediately reinstate the rights of Nigerian users to determine how their data is shared and submit a compliance letter by 1 July 2025.
• On 2 May 2025, the Nigerian Immigration Service released the Guidelines for the Implementation of the e-Visa Application System and Automated Landing and Exit Cards. The Guidelines introduced e-visa which replaced visa on arrival. The e-visa application system also introduced thirteen (13) short-visit visa categories for eligible foreign travellers and imposed penalties for overstaying visas effective from 1 September 2025. Electronic landing and exit cards were also introduced to replace the manual processes of embarking and disembarking travellers.
• On 29 May 2025, the Nigerian President approved the establishment of the National Credit Guarantee Company Limited (NCGC) and the appointment of its board and management team. The NCGC is backed with an initial capital of N100 billion for the purpose of expanding access to finance for Micro, Small and Medium Enterprises (MSMEs), manufacturers, large businesses, etc. across Nigeria.
• On 11 June 2025, the Lagos State Electricity Regulatory Commission (LASERC) issued Order No. LASERC ORDER/001/2025 establishing the regulatory framework for electricity market operations within Lagos State. The issuance of the Order marked the conclusion of the transition for transfer of regulatory oversight from Nigerian Electricity Regulatory Commission to LASERC. The Order requires individuals and entities to obtain licenses from LASERC to legally undertake regulated electricity activities within Lagos State.
• On 17 June 2025, the Corporate Affairs Commission (CAC) announced the review of its service fees effective from 1 August 2025. The fees for company incorporation and post-incorporation services were therefore reviewed upward. The implementation date was also subsequently postponed to 1 October 2025.
• On 19 June 2025, the Securities and Exchange Commission (SEC) issued the Circular to All Public Companies and Capital Market Operators on the Transmutation of Independent Non-Executive Directors and Tenure of Directors. SEC directed the immediate discontinuance of the transmutation of Independent Non-Executive Directors (INEDS) into Executive Directors within the same company or its group structure by public companies and significant capital market operator. SEC also introduced a 3-year cool off period for Chief Executive Officer or Executive Director upon stepping down from a company before being eligible for appointment as Chairman.
• On 26 June 2025, the Nigeria President signed four tax reform bills into law. The four laws are: the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service (Establishment) Act 2025, and the Joint Revenue Board (Establishment) Act 2025. The Acts repeals certain tax laws and also reduced the multiplicity of taxes with the aim harmonising tax collection and enhancing the ease of doing business in Nigeria.
• On 30 June 2025, the Nigerian President ordered the temporary suspension of the implementation of the Financial Reporting Council (Amendment) Act, 2023 which imposed new annual dues on large private companies classified as Public Interest Entities.

3rd Quarter (July – September 2025)

The third quarter was also significantly marked by regulatory actions through issuance of Guidelines and regulations. Sanctions and penalties were also imposed for regulatory breaches. The Federal Inland Revenue Service (FIRS) announced the discontinuance of the issuance of tax exemption certificates. The Nigerian Communications Commission issued a license framework for licensing and regulating international Application to Person (A2P) messaging in Nigeria.

• On 6 July 2025, the Nigeria Data Protection Commission (NDPC) imposed a fine of N766,242,500 on Multichoice Nigeria who are the owners of DSTV for breaching the Nigerian Data Protection Act through unlawful cross-border data transfers and violation of Nigerian data subjects’ personal data.
• On 8 July 2025, the Nigerian Communications Commission (NCC) issued the License Framework for International Application to Person (A2P) Messaging in Nigeria. The framework was issued by NCC in a move to regulate Application to Person services in Nigeria through the introduction of the International A2P Messaging Aggregator License.
• On 25 July 2025, the Federal Competition and Consumer Protection Commission (FCCPC) issued the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025. The regulations provide for the registration of digital and traditional money lenders with the exception of licensed microfinance banks. It also imposes obligations including filing of bi-annual and annual reports, etc. on money lenders with sanctions and penalties provided for the breach of any of the provisions of the Guidelines.
• On 29 July 2025, the Federal Inland Revenue Service (FIRS) in a public notice announced the discontinuance of issuance of tax exemption certificates to all taxpayers including pioneer status companies, non-governmental organisations and free zone entities. Subsisting tax exemption certificates would not be renewed by the FIRS.
• On 30 July 2025, the National Insurance Commission (NAICOM) issued the Guidelines for Insurtech Operations in Nigeria. The Guidelines became operational on 1 August 2025 providing a regulatory framework for the safe and responsible deployment of Insurtech solutions by licensed insurance operators. The Guidelines provide the minimum capital requirements for Insurtech operators as well as the permissible and non-permissible activities.
• On 5 August 2025, the Nigerian President, signed the Nigerian Insurance Industry Reform Act, 2025 into law. The Act repealed the Insurance Act 2003 and consolidated several insurance laws including the Marine Insurance Act, Motor Vehicles (Third Party Insurance) Act, etc. into a unified and streamlined legal framework for the insurance industry. It also revised the minimum capital requirements for insurance companies across various insurance categories to reflect a risk-based capital approach in alignment with current international standards and practices.
• On 6 August 2025, NCC announced the release of the Guidelines on Corporate Governance, 2025. The Guidelines are applicable to all communication companies in Nigeria and provides for the composition of the board of directors, board committees and appointment processes, etc.
• On 16 September 2025, the Central Bank of Nigeria (CBN) issued a circular on the Appointment and Announcement of Successors to Managing Director. The CBN requires Payment Service Banks (PSBs) to obtain the regulatory approval of the CBN of the successor of a Managing Director (MD/CEO) no later than six months to the expiration of the tenure of the incumbent MD/CEO.
• On 18 September 2025, the Federal Government issued a directive mandating all mining and quarrying companies licensed since 2024 to finalize their Community Development Agreements with host communities before 31 December 2025.
• On 21 September 2025, the Minister of Solid Minerals Development announced the revocation of 1,263 mineral licenses in Nigeria following failure by the licensees to comply with the mandatory payment of their annual service fees.
• On 29 September 2025, the National Pension Commission (PENCOM) issued a circular which reviewed the minimum capital requirement for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs). The circular directs PFAs to increase their capital base to 20 million Naira from 5 million Naira while PFCs are to increase their capital base to 25 billion Naira from 2 billion Naira.

4th Quarter (October – December 2025)

Key regulatory activities especially in the Nigerian financial services and oil and gas sectors occurred in the fourth quarter. The Central Bank of Nigeria (CBN) issued guidelines to regulate agent banking activities in Nigeria. A draft Guidelines for handling Authorized Push Payment Fraud was also issued by CBN to preserve the integrity of Nigerian payment system. The Nigerian Investment Promotion Commission also put a stop to applications for Pioneer Status Incentive in view of the Economic Development Tax Incentive (EDTI) to commence from 1 January 2026.

• On 6 October 2025, the Central Bank of Nigeria (CBN) issued the Guidelines for the Operation of Agent Banking in Nigeria. The Guidelines provides for the permissible and non-permissible agent banking activities, appointment of agents, agent qualification and due diligence requirements, rules on agents’ locations and geo-tagging of agents’ devices, etc.
• On 9 October 2025, CBN issued the Exposure Draft Guidelines on the Operations of Automated Teller Machines (ATMs) in Nigeria to provide additional guidance on the operation of ATMs and provide clarity of security requirements of ATMs, resolution of failed transactions, etc.
• On 10 November 2025, the Nigerian House of Representatives ad hoc committee on the economic, regulatory and security implications of cryptocurrency adoptions and Point of Sale Operations discussed the opportunities, challenges and future of Nigeria’s digital finance ecosystem with cryptocurrency operators and digital asset innovators.
• With effect from 10 November 2025, the Nigerian Investment Promotion Commission (NIPC) stopped receiving applications for Pioneer Status Incentive in a bid to fully transition to the new Economic Development Tax Incentive (EDTI) scheme which will take effect from 1 January 2025.
• On 13 November 2025, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced the suspension of the proposed 15 percent import duty on Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) which was initially approved by the President and announced by the NMDPRA on 21 October 2025.
• On 26 November 2025, the Securities and Exchange Commission (SEC) directed all capital market operators to state their compliance level and ensure that all tradable instruments are registered in line with the newly enacted Investments and Securities Act, 2025 no later than January 2026.
• On 26 November 2025, CBN issued the Draft Guidelines for Handling Authorised Push Payment Fraud. The draft Guidelines provides for reporting APP fraud, resolution and reimbursement and the roles of financial institutions in preventing, detecting and mitigating APP fraud. The Guidelines also mandates financial institutions to have an APP Fraud Policy and implemented by the Boards of financial institutions.
• On 28 November 2025, the Nigeria President approved the establishment of the National Tax Policy Implementation Committee to oversee the implementation of Nigeria’s newly enacted tax laws which would take effect from 1 January 2025.
• On 1 December 2025, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) launched the 2025 oil licensing round through digital bids of the 50 oil and gas blocks approved for bidding. The oil licensing round is expected to deepen investment in the Nigerian upstream sector.
• On 10 December 2025, the Joint Revenue Board (formerly Joint Tax Board) placed a nationwide ban on road taxes, levies and related charges in a bid to sanitize Nigeria’s tax administration and improve the ease of doing business.

Conclusion

2025 has been a remarkable year of significant changes and reforms in Nigeria’s legal and regulatory landscape. Key regulatory guidelines and regulations were introduced by regulators including the Central Bank of Nigeria, the Federal Competition and Consumer Protection Commission, the Nigeria Data Protection Commission, etc. The CBN introduced the guidelines for agent banking to regulate agent banking activities. The CBN guidelines for handling APP fraud was also issued to preserve the integrity of the financial services sector. The Nigerian tax landscape was also reshaped with the enactment of four new tax laws which repealed some existing tax laws and consolidated several tax laws. The Investments and Securities Act, 2025 ushered in a new regime for the recognition of virtual assets. Key judicial pronouncements were also made by the courts. The Competition and Consumer Protection Tribunal imposed fines on Meta Platforms incorporated for violating the Nigeria Data Protection Act and unlawful cross-border transfer of data of Nigerian data subjects. The Court of Appeal also delivered a judgement authorizing financial institutions to freeze customers’ bank accounts on suspicion of fraudulent activities without the need to first obtain a court order.

As we approach the new year, we extend our sincere gratitude to all our clients for their continued trust in us and wish you a Merry Christmas and a prosperous New Year 2026.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

Contracting in the Digital Finance Ecosystem: How to Manage Legal Risks in Nigerian FinTech Partnerships

Colin Egemonye — Thu, 11 Dec 2025 07:51:26 +0000

Introduction

The emergence and continued growth of Financial Technology (FinTech) companies in the Nigerian financial services sector has redefined how financial services are delivered, with technology driven solutions that enable faster payments, lending and wealth management. These innovations often lead to complex collaborations between FinTech startups, traditional banks and third-party service providers. These partnerships may inevitably expose the parties to legal and regulatory risks if not properly managed.

As FinTechs and banks increasingly depend on one another to provide innovative financial solutions, products and services to customers, poorly drafted agreements can expose the parties to regulatory breaches, penalties, data protection violations, commercial disputes, etc. To manage legal risks in FinTech contracts, the contracting parties must first conduct thorough legal and other due diligence on prospective partners, establish a robust compliance framework, and develop a robust partnership agreement that allocates roles and responsibilities and anticipates potential risks.

Nature of FinTech Partnerships

FinTechs do not operate in a vacuum. They depend on strategic partnerships/collaborations to launch and provide their products and services to customers. Partnerships and collaborations enable FinTechs that may not hold the necessary financial license from the Central Bank of Nigeria (CBN) to partner with licensed financial institutions so as to leverage its financial license to provide products and services to customers.

Through collaborations and partnerships, FinTechs are for example able to provide services to e-commerce platforms offering point-of-sale lending or payment processing for e-hailing providers or sharing infrastructure such as Application Programming Interface (API) with other technology service providers who require it.

Legal Risks in FinTech Partnerships

Partnerships and collaborations stimulate innovation in the FinTech industry but can also expose parties to unique legal, regulatory, reputational and operational risks. The success or failure of a FinTech partnership often depends on how well these risks are identified, allocated and addressed within a contract. Below are some of the most common legal risks that arise from such partnerships.

1. Regulatory Risk: FinTech product offerings in Nigeria such as payment processing, digital lending, crowdfunding, and wealth management are all regulated by specific regulatory agencies including the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) under specific license categories with terms and conditions attached to each license category. Regulatory approvals are usually required for most partnerships before a financial institution can legally enter into any such partnerships. Failure to obtain the appropriate regulatory approval for proposed partnerships may result in regulatory sanctions and penalties including fines, revocation of license, etc.

2. Data Protection and Cybersecurity: Fintech operations are heavily data driven, involving the collection and processing of sensitive personal and financial information. Under the Nigeria Data Protection Act 2023 (NDPA), both parties in a partnership may qualify as joint data controllers or processors, sharing equal responsibilities for compliance. A data breach affecting one party can expose both to liability, enforcement actions by the Nigeria Data Protection Commission (NDPC), and reputational damage.

3. Intellectual Property and Technology Ownership: Most FinTech solutions depend on proprietary software, mobile applications, and digital interfaces. Disputes may arise over ownership of intellectual property developed or used during a partnership, especially when one party customizes a platform or co-creates a product, if intellectual property is not properly protected and ownership defined.

4. Liability and Risk Allocation: When digital transactions fail due to systems failure or downtime, unauthorised transfers, or service interruptions, customers may suffer losses. The question then arises: who bears the liability? If not properly defined, both parties could be held jointly and severally responsible under consumer protection or other laws. There is therefore a need to include clear indemnity provisions, caps on liability, and mechanisms for loss allocation in any contract.

5. Consumer Protection and Dispute Resolution: Fintech partnerships often involve multiple parties receiving or processing customers’ transactions, making accountability complex when issues arise. Consumers protection regulations require that consumers know which entity is responsible for handling their complaints. Agreements should define the customer-facing entity, procedures for addressing complaints, refund obligations, and timelines for resolution. Establishing a clear dispute resolution process whether internal escalation, mediation, or arbitration helps preserve business relationships and avoid reputational damage.

6. Cross-Border and Jurisdictional Issues: Some partnerships involve cross-border data transfers or offshore service provision. In such cases, questions may arise regarding applicable laws, tax, jurisdiction, dispute resolution and enforcement of judgments. It is therefore advisable that the governing law, jurisdiction, mechanisms for settling disputes and enforcing foreign arbitral awards or judgments be clearly specified.

Essential Tips for Managing Legal and Regulatory Risks in FinTech Partnerships

Effectively managing legal and regulatory risks in FinTech partnerships/collaborations begin with having a contract that clearly sets out the rights and responsibilities of the parties. While regulations may provide the overall compliance framework, the contract is usually what sets out responsibilities, clarifies liabilities, and ensures both parties operate within legally acceptable limits. A clearly set out agreement not only protects the parties but also signals to regulators that the relationship is grounded in proper governance and accountability. Below are some essential tips for managing legal and regulatory risks that may arise from partnerships in the FinTech services sector:

A. Choose the Right Contract Type: FinTech projects and services may require different types of contracts and agreements to formalize relationships and transactions. Service Level Agreements (SLAs) set the quality and performance standards of any FinTech service, like availability, reliability, security, compliance, as well as the penalties and remedies for any breaches. Data Sharing Agreements (DSAs) detail the terms of how data is collected, stored, processed, and shared between the parties. Software Licensing Agreements (SLAs) grant the rights and obligations of using a FinTech software or platform, such as scope, duration, fees, and limitations. Lastly, Partnership Agreements (PAs) establish the roles, responsibilities, contributions, and benefits of each part to a FinTech collaboration or joint venture. Additionally, they define the governance, decision-making, dispute resolution, and termination mechanisms of the partnership. It is important to understand the nature of the FinTech project, the parties involved, and the regulatory environment, as these factors determine which agreements are necessary, their specific terms, and how they should be structured to protect all stakeholders and ensure legal and operational compliance.

B. Use Clear and Concise Language: Like in all contracts, one of the most important aspects of managing FinTech contracts and agreements is to use clear and concise language that leaves no room for ambiguity or misinterpretation. It is advised to consistently use accurate terminologies, definitions and references throughout the contract to ensure easy reading, understanding and interpretations.

C. Constant Review and Update of Agreements: FinTech agreements should be regularly reviewed and updated to ensure that they reflect current trends, future needs and expectations of parties and customers and that they also align with any regulatory or policy changes introduced from time to time by the regulators. There is also a need to keep abreast with technological developments and innovations in the FinTech ecosystem to ensure that contracts are updated to incorporate service provision with the use of advanced and innovative technology.

D. Seek Professional Advice and Support: Managing FinTech contracts can be challenging, especially if the parties do not have expertise or did not consult experts to deal with the legal, technical, or business aspects of the partnership arrangements. The best approach to avoiding potential pitfalls is to from the outset, seek assistance from professionals who can support and seamlessly guide through the process of negotiating, contracting, interpreting and enforcing these agreements.

In summary, a well-structured FinTech contract should amongst others specify which party bears regulatory responsibility for compliance; how customer data is stored, shared, managed and protected; how revenue, risk, and liability are allocated and shared; termination, jurisdiction, dispute resolution, etc. Without these, fintech relationships could easily breakdown and lead to regulatory breaches, contractual disputes, and reputational damage for parties. In essence, the contract is not merely a record of collaboration, it is the foundation that sustains trust, compliance, and operational success in FinTech partnerships.

Conclusion

As the FinTech industry in Nigeria continues to grow, strategic partnerships will continue to play increasingly pivotal role for FinTech companies seeking to scale their operations and penetrate new markets. This collaborative approach allows FinTechs to accelerate their growth while minimizing the risks and challenges typically associated with scaling and/or market entry.

FinTech partnerships are essential to driving innovation, inclusion, and competitiveness in Nigeria’s financial ecosystem. Without robust legal and contractual foundations, these partnerships can expose parties to significant regulatory, legal, operational, and reputational risks. Effective contracting in the digital finance ecosystem requires more than just template agreements. Well-structured contracts are not merely instruments of protection; they are robust tools for innovation and trust in the future of digital finance.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

New Rules for Agent Banking in Nigeria

Colin Egemonye — Fri, 24 Oct 2025 13:46:00 +0000

On 6 October 2025, The Central Bank of Nigeria (CBN) issued the Guidelines for the Operations of Agent Banking in Nigeria (the “Guidelines”). The purpose of the Guidelines is the provision of the minimum standards for the regulations and operations of agent banking in Nigeria. They provide for the responsibilities and obligations of the parties to agent banking relationships and the general operational rules which must be adhered to by the parties in an agent banking relationship. The Guidelines became operational immediately upon its issuance on 6^th October 2025, however, the requirement for payment terminal devices such as Point of Sale (POS) devices to be geo-fenced or tagged is scheduled to be operational from 1^st April 2026.

Agent banking entails the provision of financial services by a third party (Agents) to customers on behalf of a licensed deposit-taking financial institutions (Principals).

This article therefore provides an overview of some of the key provisions of the new Guidelines.

Scope of Permissible Agent Banking Activities

The activities which are allowed or prohibited under agent banking relationships are set out in the Guidelines. Some of the activities that are permitted under agent banking are cash deposits and withdrawals, facilitating bill payments, local currency funds transfer services, providing account opening forms on behalf of principal, facilitating cheque book request and collection, etc.

Super Agents and Agents are however prohibited from carrying out banking services including account opening, loan underwriting, investment and foreign exchange services.

Agent Banking Arrangements

Agent banking arrangements or relationships could involve two or three parties as the case may be. Agent banking relationship could involve the Principal and the Agents or where the relationship is tripartite, include a Super Agent as an intermediary between the Principal and Agents.

The Principal is a duly licensed deposit-taking financial institutions authorized to carry out agent banking activities; the Super Agent is an incorporated entity licensed to carry out the activities of recruiting, aggregating and managing Agents, while Agents are individuals or non-individual entities appointed by Principals or Super Agents to carry out agent banking activities.

An agent banking relationship is formalized when a financial institution enters into an agent banking agreement with an Agent for the purpose of providing any of the permitted agent banking activities. An Agent cannot be engaged by more than one financial institution to provide agent banking services or be under more than one network of Super Agent at a time.

Mandatory Regulatory Requirements for Appointment of Agents

Financial institutions and Super Agents have very strict regulatory obligations in the appointment of Agents to provide permitted agent banking services to customers. These regulatory requirements are to be met by financial institutions or Super Agents prior to the appointments of Agents. The regulatory requirements include obtaining satisfactory documentations from Agents such as certificate of incorporation with the Corporate Affairs Commission (CAC), particulars and Bank Verification Numbers (BVN) of directors/promoters etc., conducting enhanced due diligence on Agents, and carrying out risk assessment obligations on Agents prior to their appointment and onboarding. The risk assessment could be carried out directly by the financial institution or through a Super Agent.

Use of Dedicated Agent Accounts

Transactions by Agents within the scope of the permitted activities are required to be performed through a dedicated account or wallet maintained with the Principal and the POS device provided to the Agent shall be linked with the account or wallet only. Performance of transactions outside the dedicated account or wallet is a violation which attracts sanctions including liability for any misconduct or fraud arising from the transaction, termination of the agent banking agreement and blacklisting of the Agent.

List of Agents and Locations

Financial institutions are to publish a list of their Agents on their website. Each branch of the financial institution is also required to display the list of its Agents within its locality.

Agents are only allowed to provide agent banking services within their approved locations and may not relocate, transfer or close their operations at the approved locations without prior notification to the financial institution and/or Super Agent.

To prevent Agents from operating at multiple locations, devices provided to Agents in providing agent banking services must be geo-fenced or tagged to the operate only within the agreed registered Agent location. The requirement for the devices to be geo-fenced or tagged will take effect from 1^st April 2026.

Operational and Transactional Limits

Financial institutions are required to provide operational and transactional limits for Agents in line with the Guidelines and ensure that the limits are not exceeded in the provision of agent banking services. Accordingly, the mandatory transaction limits set by the Guidelines include N100,000 daily limit and N500,000 weekly limit for deposits and withdrawals. A daily and weekly limit of N100,000 apply to bill payments.

Sanctions and Penalties

The CBN may direct financial institutions to take remedial or corrective actions including taking actions that it may deem appropriate against erring Agents or terminating the Agent Banking Agreement. CBN may also impose sanctions and penalties against financial institutions, Super Agents and/or Agents as the case may be. The sanctions which CBN may impose include:

Suspension or prohibition from further engagement in agent banking business
Prohibition from onboarding new agents
Suspension or removal of the Board, Management and officers of the Principal
Revocation of agent banking approval
Revocation of operational license.

Conclusion

The issuance of the new Guidelines by CBN is to ensure the regulation of the operations of agent banking in Nigeria. Agents are restricted to transact only the permitted business activities within their approved locations. The devices of Agents are to be geo-fenced or tagged to prevent Agents from operating from multiple locations. Agent banking arrangements are to be formalized with the execution of agent banking agreements upon the satisfactory review of the documentations, conduct of enhanced due diligence and risk assessments. CBN has the power to direct financial institutions who are Principals in agent banking arrangements to take remedial or corrective actions, however, CBN has extensive powers to impose administrative penalties and sanctions on erring Principals and Super Agents.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact: