The Central Bank of Nigeria (CBN) framework on open banking has now transitioned from a policy document to a phased implementation. Nigeria has a comprehensive history of open banking; with the Central Bank issuing Africa’s first Open Banking Regulatory framework in February 2021, followed by the Operational Guidelines in March 2023. In April 2025, the CBN provided August 2025 as the launch date for an operation that would have seen Nigeria emerge as the first African country to launch national open banking. However, the initial launch date was deferred as the CBN stressed that a wholly automated system that offers robust data protection and stringent consumer protection mechanisms should first be in place.

By May 2026, Nigeria’s phased rollout, the implementation dates are now spread across mid-2026, confirmed in CBN’s FinTech Report which was released in February 2026. The implementation workstreams comprise 5 key areas, namely:

1. Governance & Regulation;
2. Legal & Compliance;
3. Technical & Infrastructure;
4. Data Security; and
5. Stakeholder Engagement.

Stakeholders have finalized and submitted their various deliverables in September 2025 and are currently pending review by the CBN. The Nigeria Inter-Bank Settlement System (NIBSS) has been nominated as the Open Banking Registry and will hold the public repository for all registered participants in the framework. All institutions that intend to participate will need to obtain a CBN license.

 

Legal and Regulatory Considerations for Intending Open Banking Participants

Here, we consider 5 legal questions that all banks and FinTech’s in Nigeria should now be seeking answers to, and which compliance gaps organisations in general have not addressed.

1. Do Application Programming Interface (API) Agreements meet CBN Data sharing obligations?

The legal and technical standards that apply to the application programming interfaces  that allow for the sharing of financial information under Nigeria’s Open Banking framework are not guidelines; they are mandatory requirements and should not be treated as optional. The API agreements in place between banks and technology suppliers that existed prior to the extant open banking regime were not designed with this framework in mind and most of these will not satisfy the CBN framework.

All organisations with existing API agreements should re-examine them and ensure they meet all extant requirements. The relevant questions to ask regarding every API agreement include: whether it adequately defines the categories of data allowed to be accessed and if those are consistent with the tiers prescribed by CBN data access framework; whether the security levels required of the third party supplier meet the CBN’s minimum technical specifications; what the third party supplier’s obligations would be should data breach occur, including details on notification timelines and remedies, and whether the agreement’s terms for termination effectively allow the data supplier to cease data access if the third party supplier does not comply with their obligations under the framework.

2. Are Customer Consent Frameworks Updated for Open Banking?

All data sharing arrangements under the CBN Open Banking framework will be contingent on customer consent which must be informed, specific, granular, and withdrawable. CBN has clearly stated that the open banking initiative should operate with customer ownership and control of personal data; which means that  customer should dictate who gets access to it, for how long, and must be able to revoke access at any time. Customer ownership and control over data was one of the key reasons given for the August 2025 delay.

A compliant open banking consent framework should outline; the specific data categories accessible to the third-party supplier; the purpose for which the third-party supplier would be utilizing the data; duration and frequency of third-party supplier’s access to data; customer’s right to revoke consent at any time, how that is done; and ramifications to the customer’s relationship with both bank and third-party supplier if the customer withdraws consent or withholds it.

A consent framework review should involve examining all customer-facing terms and digital interfaces where the company currently captures customer data and assesses its suitability for open banking. Where consent is not suitable for this purpose, new consent needs to be collected from existing customers before the institution’s data is shared under the open banking regime.

The legal process for restructuring is the most significant for a Nigerian company, and arguably, one that is the most often initiated incorrectly. Those who get restructuring right treat it as a thoughtful, planned process – one with clear commercial objectives and the benefit of legal advice that understands both the relevant legal and regulatory framework, and the desired business outcome. Those who get it wrong approach restructuring reactively: when time-critical, after a term sheet is signed or in the midst of a shareholder dispute that is already causing damage to the relationships the restructuring is intended to resolve. Below are the five typical triggers that can give rise to a restructuring in Nigeria: what options are available and what mistakes are the costliest when dealing with them. Please note that all references to stamp duties and other related fiscal levies apply in accordance with the Nigeria Tax Act (NTA) 2025, effective January 1, 2026.

1.  An Incoming Investor Requires a Holding Company Structure

It is quite common in Nigeria that, when dealing with private equity investors, development finance institutions or strategic acquirers, they  insist on conducting investment into a clean holding company, from which investment into the target operating company will be made. The argument for a holding company is quite clear:it gives clear access, separates investment from operating risks, and allows room for further investment, offshore subsidiaries and exiting. A restructured company will need to complete its holding structure arrangements before the close of the investment when there is a new investor already talking, a process which will likely cost more money and is more time-consuming. The following regulatory and tax procedures are needed to put in place a holding company above a Nigerian company:

• Either a share for share exchange, or a new subscription into the holding company (newly created).
• Filing with Corporate Affairs Commission (CAC) in relation to the transfer with each of the companies (if any) being transferred, and with the new holding company itself under Companies and Allied Matters Act (CAMA), 2020. Section 175 of CAMA dictates that share transfers need to be duly effected and entered into the company’s register, and as required by Section 176 of CAMA, CAC must be informed of any such transfer before it becomes effective.
• Stamp duty implications under NTA 2025 retains the exemption on shares and stock transfers. Generally, ad valorem on instruments like the shareholders’ agreements and subscription documents need to be considered under NTA 2025. If offshore entities are being used, NIPC notification might be required in addition to regulatory clearances. Under NTA 2025, there have been important changes in relation to Capital Gains Tax (CGT); it is now taxed at income tax rates (30% on the company rate, and 0% on small companies, that is, companies having less than N100 million and less than N250 million on fixed assets, respectively). CGT now applies even to offshore share sales. Where indirect foreign share transfers have taken place, a CGT charge will apply, although it is possible to obtain relief based on applicable treaties. Such issues can significantly impact the tax consequences of structuring. A company can make a deliberate and conscious decision regarding its holding company’s domicile depending on the relevant investors, sectors and countries that the company is being implemented in and operates within; these countries which include Ireland Mauritius and Netherlands can offer exemptions from double tax treaties and different treatments on the taxation of dividends.
• Nigeria Tax Act 2025’s controlled foreign company rules (CFC) which levy tax on untaxed profits from offshore subsidiary businesses, should be evaluated for all holding company choices.

2.  A Shareholder Dispute Makes the Current Structure Unworkable

No structure is ideal and shareholder disputes mean one company has become a battleground rather than a business. For co-founders who invested in an equal partnership and without reserved matters rights at inception, they have become stalemated over a major commercial decision. An early investor who failed to properly document their rights over the shares of a company might seek to impose conditions which are beyond what other stakeholders envisaged. The returning co-founder, for whom the company was always structured in an equal part despite holding no significant role, might seek a share sale based on an agreed initial valuation that no longer appears justifiable. Whatever the situation, restructures that are driven by disputes need the utmost care since they should have an immediate impact on the overall result of the disputes. Each of a share buy-back, demerger, capital reduction, or the transfer of a business into a new company has a different impact upon each shareholder, tax implications under NTA 2025 and regulatory requirements in Nigeria. The most appropriate tool will be determined based on the overall legal status of each party and the business goals being pursued through the restructure. The foremost principle is that the documentation must correctly document the arrangement agreed between the shareholders before regulatory actions can be taken. Creating additional legal risk for companies on an already fragile shareholder arrangement by attempting to justify post-facto the circumstances, rather than preceding the corporate restructuring, means there is additional legal risk.

 

 

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.

 

1. 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.

 

2. 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.

 

3. 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.

Most Nigerian business owners know their contracts need attention. Yet, only a few have read them recently. There is a gap between what a contract actually says and what a business truly needs. In terms of scale, risk exposure, and commercial relationships, it grows wider every year the document is left unreviewed.  

This article examines five clauses that we consistently find in Nigerian business contracts. Each of them has real commercial consequences if it fails. All of them are fixable if the problem is identified before the dispute, the loss, or the failed deal.

1. FORCE MAJEURE

A party is excused from performance under force majeure clauses where circumstances beyond its control prevent performance. The events mentioned in most Nigerian commercial contracts were drafted some few years ago and have not been reviewed and updated since then despite the annual or occasional  renewal of these contracts by parties.

These are the risks that should now appear in any properly drafted Nigerian force majeure clause: shortages of foreign exchange and difficulty in obtaining foreign exchange at the official rate, sudden regulatory intervention including CBN directives, NRS enforcement actions, and unforeseen sector-specific regulatory changes, digital infrastructure failures including internet outage or cloud service disruption, critical business systems become unusable because of power supply and energy failures, etc.

An outdated or unsupported force majeure clause is not protection, it is a false sense of security. The real question for every contract is not simply “does it contain a force majeure clause?” but “would this protect us if something went wrong today?”

2. GOVERNING LAW AND JURISDICTION

The governing law determines which country’s laws will be applied in interpreting the contract. The jurisdiction that is stated is what will determine which court can hear the dispute. The difference between specifying Lagos courts and specifying Nigerian law as governing law and jurisdiction is not the same thing and this is one of the most frequent drafting errors in Nigerian commercial contracts. The governing law determines which country’s laws apply to the interpretation of the contract while jurisdiction determines which court can hear and determine the dispute.  

A contract between two companies that provides “Lagos courts” but not Nigerian law is an ambiguity that an adept opposing counsel will exploit in a dispute. As well, a contract that sets Nigerian law as the governing law without specifying jurisdiction opens the door to litigation in a venue neither party expected.

As such it is important that every contract must state:

• The governing law (Nigerian law, English law, or another law as appropriate), and
• The dispute resolution forum (a specific High Court, the Lagos Court of Arbitration, or institutional arbitration under LCIA or ICC International Court of Arbitration).

Film, music, fashion, digital content, gaming, and design, as well as the technology platforms that distribute and monetise creative work, are among Nigeria’s fastest-growing sectors and among its top exports to the world. Nollywood is the second-largest film industry in the world by volume with the industry projected to surpass ₦20 billion in gross box office revenue by the end of 2026.

The Nigerian music industry is attracting international commercial interest in a way that seemed impossible a decade ago. Nigerian fashion, design, and digital content are gaining commercial sophistication.

Yet the intellectual property infrastructure that should capture and compound this creative output is, in most cases, inadequate. Rights are often unregistered, while contracts are either missing or poorly drafted. Some licensing arrangements are informal or nonexistent. As a result, revenue that should accrue to Nigerian creators and the businesses that deal with them instead flows to distributors, platforms and counterparties that have better legal frameworks for protecting their interests. This highlights five key IP strategies that businesses in Nigeria’s creative economy must adopt and the mistakes that are currently costing them money that must be avoided.

1. REGISTER TRADEMARKS EARLY

Trademarks must be registered early before the brand is valuable enough to be stolen or adapted by competitors. Nigeria follows a ‘first-to-file’ rule. This means the legal owner is the person who registers the trademark first, regardless of who created the brand or used it in the market first.

So the commercial consequence for a Nigerian creative brand that has not registered its trademark is that its name, logo, or distinctive mark can be registered by a competitor, distributor, or anyone who has seen the brand as commercially valuable and has moved to take it away. Once another party has registered the mark, the original creator has to either litigate (which is expensive, slow and uncertain) or make arrangements with the registered owner (which may be commercially damaging).

Currently, the Nigerian Trademarks Registry processes applications for a lengthy time, from the time of application to registration. This means that trademark registration should be initiated before a brand attains commercial significance, not after. The cost of a trademark application is small but the cost of having to fight a trademark dispute or losing the right to use your own brand name is not.

2. IP ASSIGNMENT CLAUSES IN EVERY CONTRACT

Intellectual Property Assignment Clauses in Every Designer, Developer, and Content Creator contract exist from the moment of creation, but the owner of that copyright is the creator and not the person who commissioned the work in Nigeria. It means a Nigerian fashion brand paying a designer to create a collection, a technology company paying a developer to build its platform, or a music label paying a producer to make a recording – all of these businesses may not own the intellectual property in what they paid for unless their contracts  explicitly say so.

Copyright in a commissioned work is owned by the author unless agreed upon in writing otherwise, as per the Nigerian copyright act. A verbal agreement is not sufficient. A purchase order or invoice is not enough. Those assignments must be in writing and signed by the creator with the IP and terms.

The practical consequence is that all work done by a designer or developer or photographer or videographer or content creator or producer has to be accompanied by a written contract assigning all copyright and associated rights to work or product to the commissioning party by an express agreement.It should also contain a warranty that the creator owns the rights being assigned and that the work does not violate third parties’ rights, as well as a confirmation obligation that the creator must execute all other documents necessary to complete the transfer.

Without these things in place, the business is legally uncertain about who actually owns its creative assets – something that is immediately apparent in due diligence, licensing negotiations, or enforcement actions.

3. ROYALTY AGREEMENTS

Among the most commercially underused tools in the Nigerian creative economy are royalty agreements that generate recurring revenue through IP licensing. Many Nigerian musicians, filmmakers, authors and creators simply hand over the work in full when a properly structured licensing deal could produce steady revenue over a long period without compromising the creator’s ownership of the rights behind it.

Some of the specific licensing structures that Nigerian creative economy businesses should be using but which are often not are: synchronization licenses for music used in film, television, advertising, and digital content – where the royalty is paid per use or per download; print-on-demand or distribution licenses for creative content on digital platforms – where the royalty is paid periodically; and merchandise licensing where a brand or creative asset is licensed to a manufacturer for a royalty on sales.

In order to be effective, royalty agreements must include: What is covered by the license – for what pur mpose – in what territory – and for how long, your royalty rate and calculation basis (a percentage of revenue or a per-unit fee, or a fixed periodic payment), the audit rights of the licensor (the right to inspect the accounts of the licensee to confirm the royalty calculation) are also important. In addition, the termination provisions (where and how the license can be terminated, and what happens to any sub-licenses granted by the licensee) are also discussed.

Every week, we hear a story about a Nigerian business owner who has just discovered that someone else has registered their brand name as a trademark. Or that the logo their designer created is legally owned by the designer, not the business. Or that the technology they licensed from a foreign company cannot be enforced because it was never registered with NOTAP.

In every case, the business owner believed they were protected. They registered their business name with the Corporate Affairs Commission. They had a contract with their designer where they signed a license agreement but none of that was enough. And the cost of fixing it where feasible is always higher than the cost of getting it right in the first place.

On World IP Day, this article explains what it actually takes to protect a brand and its intellectual property in Nigeria in 2026.

 

CAC Registration Is Not Trademark Protection

This is the most common IP misconception we encounter in Nigeria. A CAC business name or company registration gives you the right to trade under a name within the Nigerian corporate registry. It does not give you the exclusive right to use that name as a brand nor does it prevent anyone else from registering that name as a trademark. And it does not give you any rights that are enforceable against a third party who uses the same name in the marketplace.

 

Trademark registration at the Nigerian Trademarks Registry gives you the exclusive right to use the mark in Nigeria for the registered goods and services. Without this foundational brand protection enforcement, you are relying on the common law tort of passing-off which requires proof of established goodwill and reputation, is more uncertain than a registered trademark infringement claim, and is considerably more expensive to pursue.

 

How to Actually Protect Your Brand in Nigeria

Protecting a Nigerian brand properly requires these steps:

Step 1: Conduct a Trademark Search

Before filing a trademark application, a search of the Nigerian Trademarks Registry should be conducted to identify any prior registrations that could conflict with your mark. Filing without searching risks rejection of your application and more seriously a dispute with a prior rights holder whose claim will be stronger than yours.

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.

1. 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.

2. 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.

 

3. 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.

Your product is validated, you have end users, your revenue is growing, and your team is getting bigger. And then it stops, and the founders can not understand why. This does not happen because the market changes or because the product fails. It’s because legal and structural foundations were built for a startup, and nobody updated the structures for a growing company. Every day, we see these problems in growth-stage Nigerian businesses, but these five are the most consistent, and we fix each one.

1. A COMPANY STRUCTURE THAT HAS OUTGROWN THE BUSINESS

Having outgrown the business, many Nigerian growing or growth-stage businesses are operating in a corporate structure designed for their founding context: Two equally invested co-founders, with no institutional investors, a simple CAC registration, and annual returns handled by a company secretary. That structure worked well from the start. This was unsuitable for Series A.

Companies face new investors with specific governance requirements, senior hires who need equity, new business lines with different regulatory requirements, potential international expansion etc. Here the original structure creates additional problems such as:

• A capitalization table is not compatible with institutional investment.
• Articles of association are not suitable for series A or B governance.
• Share classes that do not represent the economic reality of the company.
• No way to issue options or warrants to key employees.

A structural review of the articles of association, shareholder register, corporate governance framework, and if a new holding structure is required, the most tax-efficient way to reorganize is through the new Nigeria Tax Act 2025. More quickly and easily, this review can be done.

2. CONTRACTS DESIGNED FOR A MUCH SMALLER OPERATION

Contracts designed for much smaller operations are signed by larger counterparties for larger values, but many of these businesses are still using the same contract templates they drafted (or downloaded from the internet when they started out). The exposure from inadequate commercial contracts grows as the business expands. Among the business-prone gaps that we observe in Nigerian growth-stage business contracts are:

• Uncovered liability provisions that give the business unlimited financial risk in a single contract.
• Intellectual property clauses, which assign the most valuable assets of the company to clients, suppliers, or contractors.
• Paying on long credit terms creates cash flow frictions – especially in contracts with large corporates or government entities.

Force majeure clauses that were last updated in 2019 are now standard and do not cover the full spectrum of disruptions that are now commonplace, making them unworkable in a real dispute.

A poorly drafted shareholders’ agreement is a time bomb waiting to happen and we have seen it happen in boardrooms across ownership disputes, deadlocked decisions and exits gone wrong. Not because the business failed but because the legal foundation was not built to last.

Over time, the patterns we see are remarkably consistent: agreements drafted on templates, never reviewed after signing, and completely inadequate for the company that now exists. This article addresses the clauses that matter and the questions every board should be able to answer about the agreement that governs their company.

 

1. Pre-Emption Rights: Who Gets the First Right to Buy?

Pre-emption rights give existing shareholders the first opportunity to acquire shares before they can be sold to a third party. Without them or with poorly drafted versions, a shareholder can sell to anyone, including a competitor or simply someone the remaining shareholders would never have chosen.

The critical questions your agreement must answer are: What triggers the pre-emption obligation? Is it any proposed transfer or only certain categories? What is the valuation mechanism – a price agreed between the parties, an independent valuation or a formula? How long does the pre-emption window last? What happens if the pre-emption price is disputed?

An agreement that is silent or ambiguous on these points will fail at the exact moment it is most needed especially when a shareholder wants to exit the company.

 

2. Drag-Along Provisions: Can the Majority Force an Exit?

A drag-along clause allows a majority shareholder or a specified percentage of shareholders acting together to compel all other shareholders to sell their shares on the same terms in a company sale. The purpose is to allow a majority to execute a clean exit without a minority holdout blocking an otherwise agreed transaction. Without a drag-along, a minority shareholder can derail an acquisition by simply refusing to sell.