Nigeria’s Digital Economy Faces Infrastructure, Capital and AI Challenges, Experts Say at DOA Business Series
Nigeria’s digital economy is projected to reach $18.3 billion in 2026, but experts say achieving that milestone will require overcoming major barriers in infrastructure development, access to affordable capital, and effective data governance.
These issues took centre stage at the 5th edition of the DOA Business Series, organised by commercial law firm Duale, Ovia and Alex-Adedipe (DOA) in Lagos. The event, themed “Regulation, Capital and Business Competitiveness: Nigeria’s Digital Frontier,” gathered leaders from Nigeria’s technology, finance, telecommunications, legal, and regulatory sectors to discuss the country’s rapidly evolving digital landscape.
The event featured two major panel sessions focusing on the infrastructure and financial ecosystem needed to support Nigeria’s digital economy and the growing importance of artificial intelligence and data ownership.
Nigeria’s Infrastructure Deficit Remains a Major Barrier
The first panel discussion, which featured executives from IHS Nigeria, ipNX, Nigerian Exchange Limited (NGX), NOLT Finance, and Nairametrics, quickly shifted from opportunities to the realities slowing the growth of Nigeria’s digital economy.
A major concern raised by panelists was Nigeria’s persistent electricity crisis and its impact on telecommunications infrastructure.
Telecom Operators Continue to Battle Power Challenges
Speaking during the session, Dapo Otunla of IHS Nigeria, which manages over 16,000 telecom towers nationwide, explained the complexity of deploying infrastructure in Nigeria compared to other markets.
According to him, building telecom infrastructure in countries with stable electricity grids is significantly easier.
“In some countries like India, once you connect your tower to the national grid, your work is largely done. In Nigeria, you install the tower, deploy generators, and then create an entire logistics system to deliver diesel continuously.”
He further noted that inconsistent right-of-way policies, multiple regulatory hurdles, and poor coordination between state governments and infrastructure companies continue to increase operating costs.
Otunla also highlighted concerns about some state governments pursuing individual legal actions against telecom infrastructure operators instead of engaging the companies through coordinated industry discussions.
Local Internet Infrastructure Is Critical for Digital Sovereignty
Oluwaseun Oluboyo of ipNX argued that Nigeria’s dependence on foreign infrastructure for internet traffic routing remains a significant challenge.
He stressed that routing local internet traffic through servers located outside Nigeria contributes to increased latency, poorer service delivery, and limited digital sovereignty.
According to him, Nigeria must invest more aggressively in:
- Local data centres
- Internet exchange points
- Domestic cloud infrastructure
- In-country content hosting facilities
He noted that building these infrastructures locally would significantly improve internet performance and strengthen Nigeria’s control over its digital ecosystem.
Financing Nigeria’s Digital Economy Remains Expensive
The discussion also examined the availability of capital for digital infrastructure projects.
Capital Exists, But Access Remains Difficult
Jude Chiemeka, Chief Executive Officer of the Nigerian Exchange Limited (NGX), challenged the assumption that Nigeria lacks sufficient capital to fund large-scale digital infrastructure projects.
He identified sustainability finance and non-interest finance as two major funding channels that remain largely underutilised despite holding substantial investment potential.
Chiemeka also revealed that the NGX continues to encourage more technology companies to list on the exchange to deepen capital market participation.
However, Robert Ijewere of NOLT Finance argued that the real challenge is not necessarily the availability of capital, but its cost.
“A business that remains profitable with funding costs at 13% may become unviable when interest rates rise to 30%.”
With Nigeria’s Monetary Policy Rate (MPR) standing at 26.5%, he noted that many digital businesses struggle to sustain operations under such borrowing conditions.
Ijewere proposed that intellectual property assets should receive broader recognition as acceptable collateral within Nigeria’s financial system, a move that would require closer collaboration between legal institutions and financial regulators.
Nigeria’s Payments Success Could Unlock the Next Digital Growth Phase
Offering a more optimistic perspective, Ugodre Obi-Chukwu of Nairametrics argued that Nigeria has already achieved significant success in digital payments infrastructure.
According to him, Nigeria’s ability to process instant transactions and same-day settlements places the country ahead of many global markets.
He suggested that Nigeria’s next major opportunity lies in expanding:
- Consumer credit systems
- Digital lending ecosystems
- Capital formation mechanisms
These developments, he argued, could unlock the next wave of economic growth within the country’s digital economy.
Artificial Intelligence, Data Ownership and Digital Sovereignty Take Centre Stage
The second panel session focused on one of the fastest-growing areas of concern globally: the regulation and governance of artificial intelligence and data.
The panel featured representatives from the:
| Organisation | Focus Area |
|---|---|
| Federal Ministry of Communications | Digital policy and regulation |
| Nigeria Data Protection Commission (NDPC) | Data protection and compliance |
| Microsoft | Artificial intelligence |
| ESIEE Paris | AI research and development |
| Bluechip Technologies | Enterprise technology solutions |
Nigeria’s Data Protection Laws Can Support AI Development
Speaking during the panel, Babatunde Bamigboye of the Nigeria Data Protection Commission (NDPC) clarified that the commission’s objective is not to punish businesses but to support responsible innovation.
“The NDPC is not out there to punish anyone, but to enable businesses.”
He explained that although Nigeria’s data protection legislation was not originally designed specifically for artificial intelligence, its core principles remain highly relevant.
These include:
- Lawfulness
- Fairness
- Transparency
- Data minimisation
- Accountability
Bamigboye also addressed the growing debate around data localisation and sovereignty, stressing that storing data within national borders does not automatically guarantee ownership or control.
According to him, true digital sovereignty depends primarily on who controls access to the data, regardless of where it is physically stored.
Building AI in Nigeria Requires Local Solutions
Drawing from his experience developing artificial intelligence systems at Wema Bank, Dr Olumide Okubadejo of ESIEE Paris explained that deploying AI solutions in Nigeria presents unique challenges that do not exist in many developed markets.
These challenges include:
- Internet latency
- Device limitations
- Local language complexities
- Security constraints
- Infrastructure limitations
“Building AI in this part of the world is particularly interesting because you have to rethink the problem entirely based on local realities and constraints.”
He argued that Nigeria’s conversation around artificial intelligence must move beyond data collection alone and focus more on ownership of AI models, outputs, and intellectual property.
Okubadejo also suggested that certain categories of national data should be strategically protected to ensure Nigeria benefits economically and technologically from AI systems trained using data generated by its citizens.
Nigeria’s Digital Future Depends on Solving Today’s Challenges
The discussions at the DOA Business Series highlighted a clear reality: Nigeria’s ambition to build a multi-billion-dollar digital economy will depend heavily on solving longstanding challenges in infrastructure, financing, regulation, and technological sovereignty.
While progress has been made in areas such as digital payments and connectivity, experts agree that achieving sustainable growth will require stronger collaboration between government institutions, regulators, investors, and private sector innovators.
As artificial intelligence, digital infrastructure, and data ownership become increasingly important globally, the decisions Nigeria makes today could determine the country’s competitive position in Africa’s digital economy for decades to come.
