Africa Employment Trends Forecast 2026

Legislative developments

New data protection standards for employers

The Nigeria Data Protection Act, 2023 (NDPA), which is the extant law on data protection in Nigeria, continues to exert a significant influence on the compliance practices of organisations, including their employment practices.

This has been further enhanced by the issuance of the General Application and Implementation Directive (GAID) by the Nigeria Data Protection Commission (NDPC) in March 2025. The GAID came into effect on 19 September 2025 and provides comprehensive and binding guidance on the interpretation and application of the NDPA across all sectors, including employment. Specifically, it imposes more stringent compliance obligations on all organisations subject to the NDPA, including employers in their capacity as data controllers and processors.

Under the GAID, employers to which the NDPA applies are required to adopt robust security protocols and safeguards for all kinds of personal data processing activities (including collection, storage, disclosure, alteration, retrieval or transfer) to ensure the security of personal data. It also guarantees the rights of employees and other data subjects whose personal data is handled by an employer, such as independent contractors, vendors, customers or business partners.

The GAID is applicable to a data controller or processor where (i) it is domiciled, resident or operating in Nigeria; (ii) the processing of personal data occurs within Nigeria; or (iii) it is not domiciled, resident or operating in Nigeria, but is processing personal data of a data subject in Nigeria.

Every data controller or processor to which the GAID applies is expected to revise its internal policy documents and ensure adequate mechanisms are in place to ensure compliance with the GAID. Failure to comply with the provisions of the GAID may result in an investigation by the NDPC, sanctions, administrative penalties, other forms of enforcement action, or litigation from aggrieved data subjects, all of which could result in financial loss or reputational damage.

As a result, employers must now adopt a proactive, risk based approach to data governance and ensure their human resource and information technology practices align with Nigeria's evolving data protection regime.

Implications of the Nigeria Tax Act, 2025 for employment relationships

The Nigeria Tax Act, 2025 (NTA), which repealed various tax laws, including the Personal Income Tax Act (Chapter P8) LFN 2004 (as amended) (PITA), was signed into law on 26 June 2025. The commencement date of the NTA is 1 January 2026. This means that the PITA and other repealed laws remain operative until 1 January 2026, when the NTA takes effect. The NTA provides a unified fiscal legislation governing taxation in Nigeria and introduces structural reforms to broaden the tax base. Regarding employment relationships, the NTA introduces comprehensive reforms to the definition and treatment of employment income and benefits. The changes introduced will have a direct impact on employees' take-home pay and payroll calculations, requiring employers to update their payroll processes accordingly. Some of the changes introduced by the NTA as it relates to employment relationships include, but are not limited to:

• New income bands and tax rates: New personal income tax bands and rates are introduced, which provide greater relief for lower-income employees while applying progressively higher rates to higher income individuals.
• Clearer definition of resident and non-resident individual: The NTA now provides a clear definition of when an individual is considered resident in Nigeria. Under the NTA, a resident individual is an individual who, in a year of assessment: (i) is domiciled in Nigeria; (ii) has a permanent place available for their domestic use in Nigeria; (iii) has a place of habitual abode in Nigeria; (iv) has substantial economic and immediate family ties in Nigeria; (v) sojourns in Nigeria for a period of up to or more than 183 days in a 12-month period, inclusive of annual leave or temporary period of absence; or (vi) serves as a diplomat or diplomatic agent of Nigeria in another country. An individual who does not meet any of these conditions is considered a non-resident individual.
• Benefit in kind for rent: The NTA caps the taxable value of accommodation benefits at 20% of an employee's annual gross income. Where premises in Nigeria are made available by an employer to the employee, the spouse or family and the employee pay no rent, or pay a rent less than the annual rental value of the premises, the employee will be treated as receiving additional emoluments equal to the annual rental value of the premises, capped at a maximum of 20% of their annual gross employment income.

Proposed enactment of the Nigeria Social Security Trust Fund Act

It is anticipated that in 2026, the Nigeria Social Security Trust Fund Bill (NSSTF Bill) will be enacted into law, having already passed its second reading in the Nigerian Senate as of the date of this publication.

The NSSTF Bill is designed to repeal the Nigeria Social Insurance Trust Fund Act, Cap N88, LFN 2004, and the Employees' Compensation Act, Cap E17, LFN 2004, consolidating their provisions into a single, streamlined framework.

The NSSTF Bill aims to provide comprehensive compensation to workers for any death, injury, disease or disability arising out of, or in the course of, their employment, as well as to address related matters. Once enacted, the NSSTF Bill is expected to reduce the fragmentation of worker compensation legislation in Nigeria.

Anticipated workplace trends

In-house AI development

The adoption of AI in Nigerian workplaces continues to grow, particularly across sectors such as finance, telecommunications, logistics, legal services, manufacturing and public administration.

In 2026, a notable workplace trend in Nigeria is expected to be the growing adoption of in-house AI solutions. Instead of relying solely on external platforms, organisations are increasingly investing in proprietary AI systems tailored to their specific operational requirements, industry contexts and local conditions. This shift is motivated by the need for greater control over sensitive data, the ability to customise solutions for Nigerian markets, and the pursuit of long-term cost efficiencies.

Although Nigeria does not yet have a dedicated law regulating the use of AI in the workplace, the development and use of in-house AI tools in employment will be guided by Nigeria's evolving data protection framework. The NDPA, the GAID, and other data protection legislation set out clear rules on transparency, accountability and security regarding the handling of personal data. Organisations will be expected to adopt privacy by design and by default methodologies and intentionally build these principles directly into their AI systems to ensure that employee and customer information is handled responsibly and in compliance with the law.

As Nigerian organisations continue to adopt and develop in-house AI solutions, the successful integration of these technologies will depend on balancing innovation with compliance. By embedding data protection principles into AI systems from the outset, companies can enhance operational efficiency while safeguarding the rights and trust of employees and customers.

Looking ahead, the workplace of 2026 is poised to become more technologically advanced, data-conscious and ethically responsible, setting a strong example of how AI can be harnessed safely and effectively in the Nigerian context.

Remote work rules

Although the National Employment Policy 2025 (NEP) is not a law, it serves as a strategic policy framework issued by the Federal Ministry of Labour and Employment, aimed at promoting youth empowerment, providing targeted support to vulnerable groups, and strengthening Nigeria's employment infrastructure.

The NEP sets out approximately 12 objectives, including promoting full employment as a key priority in national, economic and social policy, and ensuring that all men and women who are willing and able to work can achieve a secure and sustainable livelihood through productive and freely chosen employment.

The NEP recognises remote work, or teleworking, as an important aspect of Nigeria's evolving labour market. It outlines strategies and principles to guide remote work arrangements between employers and employees, emphasising flexible work structures that allow employees to perform their duties outside traditional office settings while leveraging digital technologies to maintain productivity and engagement. The policy recommends that employers provide teleworkers with the necessary tools and equipment for remote work. Where employees use their own tools, a monthly compensation may be agreed upon.

Employers are also encouraged to reimburse teleworking-related expenses not normally incurred in the course of work and may agree with employees on a monthly allowance to cover internet, telephone and energy costs.

By promoting remote work, the NEP aims to create a framework in which employers and employees can operate with clear protections for labour rights, fair treatment, and alignment with global best practices. As a result, we can expect more organisations to formalise their approach to remote work by implementing policies that clearly outline provisions for tools, reimbursement of expenses, allowances for internet and energy costs, and other aspects of digital connectivity.

Sector-specific outlooks

Spotlight on financial services

Nigeria's removal from the Financial Action Task Force's (FATF) Grey List in October 2025 represents a significant step in strengthening the country's anti-money laundering and counter-terrorist financing (AML/ CFT) framework. The delisting is expected to have tangible benefits for Nigerian businesses, particularly in the financial sector. It is likely to ease restrictions in correspondent banking relationships, reduce the enhanced due-diligence requirements previously imposed by foreign counterparties, and lower compliance-related costs in cross-border payments, trade finance and international lending.

A clearer and more credible regulatory environment also boosts investor confidence, potentially attracting both foreign and domestic investment and supporting business expansion. As companies grow and formalise operations, this may translate into more structured employment opportunities, greater adherence to labour laws, and improved compliance with regulatory requirements.

Employers may also encounter increased obligations in areas such as AML and financial reporting, influencing background checks for prospective employees, internal controls and staff responsibilities. Overall, Nigeria's exit from the FATF Grey List is expected to enhance transparency, accountability and formalisation in workplaces, creating benefits for both employers and employees.

Originally published by Bowmans.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.