July Policy Trend Trail

INTRODUCTION

The month of July was a month of regulatory momentum; across insurance, digital sovereignty, taxation, real estate and national service, the Nigerian government advanced a series of reform in all the highlighted areas above, aimed at strengthening the institutional frameworks and tightening the compliance obligations on the ecosystem actors in these areas.

The Policy Trend Trail for July, 2026 examines key policy and regulatory developments, assessing what has changed, what remains, why it matters, what organisations should do in response, and the policy considerations for the government.

POLICIES

IMPLEMENTATION OF THE RECAPITALISATION DEADLINE FOR INSURANCE AND OTHER RELATED COMPANIES

In the month of July 2026, the National Insurance Commission (the “NAICOM”) issued reminders for the recapitalisation deadline slated for 31^st July, 2026, following the Nigeria Insurance Industry Reform Act, 2025 (the “Act”), which imposed a recapitalisation obligation of N10 Billion, N15 Billion and N35 Billion on life, non-life and reinsurance companies respectively and also the circular issued in May 2026, titled the Guidelines on Minimum Capital Requirement for Insurance and Reinsurance Companies, which provided clarification on the assets and capital instruments that would qualify towards meeting the new statutory capital thresholds and also outlined the documentation and regulatory expectations for demonstrating compliance.

On the said date (31^st July, 2026) the recapitalisation exercise was concluded, this showed NAICOM’s commitment to ensuring the implementation of the provision of the Act and its continued efforts to strengthening the financial resilience of insurers, enabling them to underwrite bigger risks and remain solvent during economic shocks. Although this may have led to mergers or the exit of smaller companies which could not meet the new requirement, it would improve public trust in the insurance sector and attract larger investors, thereby fostering a stronger and more stable insurance sector.

CALLS FOR THE SUSPENSION OF THE NATIONAL YOUTH SERVICE REFORM 2026

In the month of June, a major reform was introduced to the National Youth Service Corps (NYSC) Scheme which was reported in our June Policy Trend Trail. However, there were concerns from Nigerians on whether the reform and modernisation of the NYSC Scheme should fundamentally alter the character of a scheme created primarily to promote national integration.

In the month of July, these concerns metamorphosed into clamour for the suspension of the implementation of the reforms to allow for wider consultations with former NYSC leaders, security experts, educational institutions, employers, youth groups and civil society organisations. A notable observation showed that the concern was not necessarily that NYSC should remain unchanged, but that reforms of a national institution should be sufficiently inclusive and should not unintentionally weaken its core purpose.

The debate presents an important policy question: how should Nigeria reform a long-standing national institution without losing the reason it was created? The proposed reforms could improve the value of national service for graduates by connecting service to skills and employability, while risk-sensitive deployment could respond to legitimate security concerns. At the same time, implementation must be supported by adequate funding, proper infrastructure and a clear legal framework, particularly as the government has directed the amendment of the NYSC Act and relevant regulations.

The controversy surrounding the reform therefore offers a lesson in public policy; a good reform is not simply about identifying what is outdated; it is also about understanding what must be preserved, consulting those affected and building sufficient public confidence before implementation. The NYSC reform remains a significant attempt to adapt a 53-year-old institution to present realities, but its success is highly dependent on whether modernisation and national integration can be pursued together rather than treated as competing objectives.

THE SENATE’S APPROVAL OF THE BILL TO ESTABLISH THE INSURANCE REGULATORY COMMISSION

As part of the ongoing reform of Nigeria’s insurance sector which commenced with the enactment of the Nigerian Insurance Industry Reform Act (the “NIIRA”), the Senate, on 21^st July, 2026, passed the Insurance Regulatory Commission (Establishment) Bill, 2025 (the Bill). The Bill seeks to repeal and replace the National Insurance Commission (NAICOM) Act, 1997 and rename the NAICOM as the Insurance Regulatory Commission (the “Commission”). The Bill also seeks to strengthen the powers of the Commission to include the issuance of regulations and guidelines, collaborating with international and local regulatory bodies, intervening in insurance companies to protect policy holders and preserving financial stability in the insurance sector.

The Bill further imposes improved governance standards by requiring higher qualifications for the appointments of members to the governing board and restricting the leadership of the board to persons with proven record of expertise in insurance, corporate governance, law, risk management and finance. In addition, the Minister of Finance is empowered by the Bill to establish an interim management committee within 30 days, where the Commission’s governing board expires or is dissolved.

Other provisions in the Bill include stricter penalties for non-compliance such as fines, licence suspension and disqualification of individuals when found guilty of regulatory non-compliance. The Bill is being proposed to align the legal framework governing insurance regulators with the reforms introduced under NIIRA 2025, hence creating a more modern and effective regulatory institution capable of responding to the evolving needs of the insurance industry.

The Bill reflects the Government’s continued effort to modernise financial sector regulation by strengthening institutional governance, improving regulatory oversight and aligning Nigeria’s insurance framework with international best practices. These developments underscore the need for actors in the insurance sector to remain compliant and prepared for increased regulatory oversight by the Commission.

It is important to note that the Bill has only passed the Senate and has not yet become law. It must be passed by the House of Representatives and receive Presidential assent before it can take effect. Until then, the NAICOM Act, 1997 remains the enabling legislation establishing the Commission, while NIIRA 2025 continues to regulate the substantive operations of Nigeria’s insurance industry.

THE PROPOSED AMENDMENT OF THE NIGERIAN DATA PROTECTION ACT, 2023 TO INTRODUCE THE REQUIREMENT FOR DIGITAL SERVICE PROVIDERS OPERATING IN NIGERIA TO HAVE PHYSICAL OFFICE PRESENCE IN THE COUNTRY

The Nigerian Senate took another step towards strengthening digital regulation by advancing a bill that seeks to amend the Nigeria Data Protection Act, 2023 by introducing a requirement for social media platforms and certain digital technology companies i.e. data processors and controllers providing services to Nigerians to maintain a physical presence in the country.

The intendment of the Bill is to promote better corporate accountability, improve regulatory engagement and ensure that multinational technology companies assume greater responsibility for their operations and users within Nigeria. The Senate is aligning Nigeria’s digital regulation and economy to global best practices as other countries such as the United Kingdom, India, South Africa etc. who have successfully encouraged global technology companies to establish local offices, which has cumulated into increased investment, employment opportunities, tax revenue and stronger collaboration with domestic regulators. The goal of this Bill is to improve the commitments of digital companies who have since generated substantial economic value from Nigeria.

The underlying policy objective of this bill is Nigeria’s attempt to ensure digital sovereignty, where the Nigerian governments require multinational digital platforms to maintain a local presence to facilitate regulatory oversight, tax administration, consumer protection, data governance and law enforcement cooperation. Having a physical office may also improve engagement with regulators such as the Nigeria Data Protection Commission, the Nigerian Communications Commission and the Federal Competition and Consumer Protection Commission, while making it easier for users and businesses to seek redress where disputes arise.

If eventually enacted, the amendment could have far-reaching implications for the technology sector as companies operating digital platforms in Nigeria may face additional compliance obligations relating to corporate registration, taxation, employment, regulatory reporting and local representation. Simultaneously, the reform could encourage greater investment in Nigeria’s digital ecosystem, support local talent development and strengthen regulatory oversight of digital platforms.

It is however important that the final legislation clearly define the categories of digital service providers covered by the requirement, specify the threshold for determining whether a platform is operating in Nigeria, clarify enforcement mechanisms and ensure that the new obligations remain proportionate so as not to discourage innovation or foreign investment.

THE REVISION OF NIGERIA’S VALUE ADDED TAX FRAMEWORK

The Federal Government has taken steps to review the Value Added Tax (the “VAT”) implementation framework through a committee tasked with the responsibility of developing a new VAT Modification Order. The review follows the commencement of the Nigeria Tax Act (the “NTA”) 2025 on 1^st January, 2026 and is intended to provide clearer rules for businesses and the incidental compliance obligations as well as, aligning VAT administration with Nigeria’s broader tax reforms. The committee is composed of representatives from the Federal Ministry of Finance, Nigeria Revenue Service, Nigeria Customs Service, Manufacturers Association of Nigeria, the Tax Advisory Committee and Civil Societies.

The committee has six weeks to review the existing framework and develop a revised instrument that will translate the provisions of the NTA into clear operational rules, clarifying any ambiguity that may have been created by the NTA. A major focus of the review seeks to clarify in specific details the categories of goods and services that are classified as the exempt and zero-rated goods and services under Part IV of the NTA. The clarification includes the development of a comprehensive schedule, including the relevant Harmonised System (HS) Codes for goods. The review will also consider a broad economic impact of VAT classification, including industrial development, exports, food security, innovation and Nigeria’s energy transition. It also takes account of Nigeria’s treaty obligations and regional integration commitments.

The outcome of the committee will directly affect how businesses fix prices of goods and services, structure transactions and determine their VAT obligations. In addition, the clarified classification should reduce uncertainty and improve compliance, particularly for manufacturers, exporters and businesses operating in sectors such as digital services and gaming.

The review is therefore more than an administrative adjustment as it is the process through which the NTA becomes more of a practical compliance framework. Hence, it is important that businesses and investors monitor the committee’s recommendations and participate in consultations where possible. The central policy objective is to design a VAT system that improves revenue collection without undermining investment, production and economic growth.

CONSUMER PROTECTION MECHANISMS IN THE REAL ESTATE SECTOR

In July, consumer protection in the real estate sector received significant regulatory focus at both the federal and state levels. While the Federal Government through the Ministry of Housing and Urban Development (the “Ministry”) proposed the development of a National Housing and Built Environment Regulation Policy (the “Policy”), the Lagos State Government launched the Lagos State Building Insurance Scheme (LAGBIS).

The Federal Government Policy proposal seeks to address concerns associated with a non-transparent real estate market, protecting real estate customers and restoring investors’ confidence. The Policy proposes to introduce an escrow account for buyer’s funds and a developer licencing and professional registration mandate on all players in the Housing and development ecosystem with the aim of fostering construction quality assurance and a data repository through the National Housing Industry Data Observatory to improve accountability.

The Ministry also proposed to establish a National Rent Registry that is targeted at addressing rent crisis. This will be complemented with the proposed expansion of access to mortgage financing facilitated by the Federal Mortgage Bank of Nigeria and access being granted to contributors of the National Housing Fund to use 25% of their retirement savings as equity for home ownership.

Although the Ministry’s intention is well-conceived, there is need for the Ministry to carefully consider the framework intended for the escrow account arrangement. If same contemplates that buyers’ funds will be held in regulated escrow accounts and released only in accordance with agreed project milestones or contractual conditions, it demands that a clear and legally robust disbursement mechanism must be in practice. The Ministry must therefore balance the protection of buyers’ funds against the developer’s legitimate need for timely access to capital at critical stages of construction, as an overly restrictive disbursement structure could stall project delivery, increase development costs and ultimately defeat the very consumer protection objective the Policy seeks to achieve. Ensuring the right balance between security of funds and velocity of construction is central to whether the escrow framework will work in practice or exist only as a paper tiger.

On the part of the Lagos State Government, LAGBIS seeks to strengthen compliance with existing building insurance requirements and reduce the financial impact of building collapses. Under the initiative, the State will begin enforcing compulsory insurance for buildings above one storey. As such, all buildings without the required insurance cover may face sanctions, including but not limited to the closure of such buildings.

EXECUTIVE ORDER ON VIRTUAL ASSETS IN NIGERIA

In July, 2026, the President signed the Presidential Executive Order on Virtual Assets Coordination (the “Executive Order”), 2026, to harmonise the regulation of virtual assets in Nigeria, strengthen collaboration among financial and regulatory agencies, protect citizens from fraud, safeguard the financial system and promote responsible innovation of virtual assets. The Executive Order addresses the fragmented regulation of virtual assets, where overlaps and gaps among agencies have exposed the country to risks such as money laundering, terrorism financing, cybersecurity and data privacy threats, fraud and revenue losses. It is aimed at improving coordination without creating a new regulator or taking away the statutory powers of existing agencies.

In accordance with the Executive Order, a Virtual Asset Council (the “Council”) has been established, which is to be chaired by the Governor, Central Bank of Nigeria (“CBN”), with the Chairman, Nigeria Revenue Service (NRS) and the Director-General, Securities and Exchange Commission (SEC) serving as vice-chairs. Other members include the Nigerian Financial Intelligence Unit (NFIU), catering to Anti-Money Laundering Compliance and the Office of the National Security Adviser (ONSA), coordinating national security and intelligence matters within the framework. The Council is saddled with the responsibility of providing policy direction, promoting inter-agency cooperation and engaging with the Attorney-General of the Federation to develop a harmonised legal and institutional framework that aligns with Nigeria’s economic, security and social objectives.

The Executive Order also created a Virtual Asset Office (the “Office”), domiciled in the CBN, to serve as the Council’s operational secretariat. The Office is set to coordinate information sharing, applications and reporting among participating agencies through an integrated supervisory technology platform that allows collaboration while preserving each agency’s control over its own data.

Importantly, the Executive Order does not establish a new regulatory body or transfer regulatory powers, instead, each agency retains its existing mandate. Registration of virtual asset operators will depend on the nature of their activities: the SEC will regulate activities involving virtual assets classified as securities, while the CBN will oversee payment, settlement, custody and other services involving non-security virtual assets. The Council will determine responsibility where jurisdiction is unclear.

Furthermore, CBN has been given a mandate to launch a regulatory sandbox that allows eligible operators to test virtual asset products, blockchain solutions and related services under close supervision. This will enable regulators to assess their impact on monetary sovereignty, financial stability, market integrity, consumer protection, financial inclusion and revenue generation before wider public adoption.

The NRS will also introduce a tax policy for the virtual assets sector to clarify the application of tax laws, improve voluntary compliance, provide certainty for taxpayers and service providers and ensure the sector contributes fairly to national revenue. In addition, the Federal Government is finalising a comprehensive Virtual Assets White Paper that will outline Nigeria’s long-term policy direction and implementation priorities for the sector. Finally, the Virtual Asset Council has been directed to produce a Harmonised Implementation Framework within 30 days to ensure the coordinated and speedy implementation of the Executive Order.

The policy direction of the Federal Government is in good stride by building on existing institutional organisation rather than creating a new regulatory body, as the Government’s choice of institutional coordination and integration over fragmentation and duplication shows its commitment to improving the substantive capacity of existing institution. The assent of the Executive Order also shows the Government’s commitment to moving with the tides in terms of global digital finance and ensuring that Nigeria is not left behind in the governance of an asset class that is already reshaping how value is stored, transferred and invested across the world. With the advancement of the Virtual Asset Service Providers Regulation Bill (the “Bill”) 2026, it will give the Executive Order the force of legislation. It becomes necessary for the Bill to substantially cover the field on the subject of the directives in the Executive Order.

FEDERAL HIGH COURT AFFIRMS NDPC’S POWER TO REGISTER DATA CONTROLLERS AND PROCESSORS OF MAJOR IMPORTANCE

In July 2026, the Federal High Court affirmed the statutory authority of the Nigeria Data Protection Commission (the “NDPC”) to designate and register Data Controllers and Data Processors of Major Importance (“DCPMIs”) under the Nigeria Data Protection Act, 2023 (NDPA). In Emmanuel Harunna v. Nigeria Data Protection Commission (Suit No. FHC/L/CS/1116/2024), the Court dismissed a suit challenging the NDPC’s power to require eligible Point of Sale (“POS”) agents and other organisations processing significant volumes of personal data to register as DCPMIs. The Court held that the Commission acted within the powers conferred on it by Sections 5(d), 6(c), 44, 45 and 65 of the NDPA which empowers it to regulate data controllers and processors, issue compliance directives and make regulations necessary for implementing the Act.

The judgment reinforces the NDPC’s regulatory authority and provides greater certainty for the implementation of Nigeria’s data protection framework. It also signals that organisations processing substantial volumes of personal data, including fintech companies, banks, healthcare providers, insurers and digital platforms should proactively assess whether they qualify as DCPMIs and ensure compliance with the Commission’s registration and governance requirements. The decision further demonstrates the judiciary’s support for strengthening data governance and regulatory compliance as Nigeria continues to advance its digital economy. Finally, the ruling resolves the uncertainty surrounding which entities fall within the scope of “data controller or processor of major importance” category, providing greater regulatory clarity and certainty for data actors.

COURT AFFIRMS THE FCCPC’S REGULATORY POWERS OVER DIGITAL LENDING UNDER THE DEON REGULATIONS

In July, 2026, the Federal Competition and Consumer Protection Commission (the “FCCPC”) resumed the implementation of the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025 (the “DEON Regulations”), following the judgment of the Federal High Court, Lagos, delivered on 20^th July, 2026 by Honourable Justice A.L. Allagoa in Suit No. FHC/L/CS/760/2026, instituted by the Wireless Application Service Providers Association of Nigeria (the “WASPAN”). The DEON Regulations impose registration, licensing, disclosure and conduct obligations on digital lenders, with sanctions of up to N100 Million or a percentage of annual turnover, and disqualification of directors for up to five years, for non-compliance.

The Commission had suspended implementation and enforcement of the DEON Regulations earlier in 2026 following an interim restraining order obtained by WASPAN, but the Federal High Court has now vacated that order and affirmed the validity of the Regulations. Following the judgment, the FCCPC indicated that it would resume oversight of digital lending platforms, including the registration of loan applications, monitoring of interest rate disclosures, compliance with data privacy requirements and regulation of debt recovery practices, and that it would issue updated compliance guidelines to support implementation.

This judgment reinforces the trend, also reflected in the Federal High Court’s decision affirming the NDPC’s power to register Data Controllers and Processors of Major Importance discussed above, of the judiciary lending consistent support to the regulatory authority of Nigeria’s consumer protection and data governance institutions, notwithstanding procedural or jurisdictional challenges from regulated industry associations. Digital lenders, mobile money operators and their technology or telecommunications partners should treat this as confirmation that the DEON Regulations are fully in force and should promptly review their registration status and compliance posture, including data privacy and debt recovery practices, ahead of the FCCPC’s updated compliance guidelines.

CBN CIRCULAR ON REGULATORY SANCTIONS FOR BREACH OF ADVERTISING REQUIREMENTS BY BANKS

On 24^th July, 2026, the Central Bank of Nigeria (the “CBN”) issued a circular to all Deposit Money Banks titled “Imposition of Regulatory Sanctions for Breaches of Advertising Requirements”, recalling an earlier circular of 27^th November, 2025 and alleging that many banks had failed to comply with regulatory provisions on advertisement. The circular directed the immediate withdrawal of non-compliant advertisements and indicated that banks which failed to comply within a five-day ultimatum could face deductions from the Cash Reserve Ratio held with the CBN.

The circular has attracted commentary and criticism regarding the manner of its issuance, particularly the absence of prior stakeholder consultation and concerns as to whether a deduction from the Cash Reserve Ratio, which affects a bank’s liquidity and lending capacity, is a proportionate sanction for advertising infractions as opposed to more calibrated measures such as fines or corrective directives.

This development echoes a theme already visible in this month’s NYSC reform debate: that the manner and process of implementing a policy can be as consequential as its underlying merit. Banks should promptly review their advertising and marketing materials for compliance with applicable CBN advertising provisions, while industry bodies may wish to engage CBN on the scope, proportionality and implementation timelines of the sanctions regime, particularly given the potential systemic implications of Cash Reserve Ratio deductions across the banking sector.

THE IMPLEMENTATION OF THE 2026 FISCAL POLICY MEASURES AND TARIFF AMENDMENTS

Earlier in the year, the 2026 April Policy Trend Trail highlighted early indications of the Federal Government’s intent to undertake a comprehensive reform of Nigeria’s fiscal and trade architecture. That intent has crystallised into a concrete policy action which was announced late July 2026 by the Nigeria Customs Service (the “NCS”) that is the commencement of the implementation of the 2026 Fiscal Policy Measures and Tariff Amendments, approved by President Bola Tinubu. This framework is designed to strengthen Nigeria’s fiscal and trade policy, enhance revenue generation and improve the country’s economic competitiveness. The amendments introduce revised ECOWAS Common External Tariff schedules, updated import and export prohibition lists, new excise duty schedules and a new Green Tax surcharge applicable to vehicles with engine capacities of 2,000cc and above.

According to the NCS, the measures are intended to support domestic industrial development, facilitate legitimate trade and improve the administration of Nigeria’s fiscal and tariff policies nationwide, and the complete schedules have been published on the NCS website to facilitate implementation and transparency.

Read alongside the ongoing revision of Nigeria’s VAT framework discussed above, this development illustrates a coordinated effort by the Federal Government to modernise the broader fiscal and trade architecture introduced under the Nigeria Tax Act, 2025, extending reform beyond direct taxation into customs administration and trade policy. Importers, exporters, manufacturers and licensed customs agents should review the amended tariff schedules without delay and assess the impact of the new excise duty schedules and Green Tax surcharge on their supply chains, pricing and compliance obligations.

TOWARDS DECENTRALISED ELECTRICITY REGULATION: NERC’S TECHNICAL AUDIT GUIDELINES AND THE FCCPC’S CALL FOR HARMONISATION

In July, 2026, the Nigerian Electricity Regulatory Commission (the “NERC”) issued the Guidelines on the Procedures for Technical Audit of the Transmission System and Network Data Validation, 2026, pursuant to sections 34 and 226 of the Electricity Act, 2023. NERC also convened regional engagements, including a seminar for judges of the Adamawa and Taraba State judiciaries, and a workshop in Abuja on legal, policy and regulatory harmonisation between federal and state institutions on the decentralisation of electricity regulation, at which the Honourable Minister of Power, Chief Joseph Tegbe, called for harmonisation of regulatory and operational activities across the Nigerian Electricity Market.

Separately, on 30^th July, 2026, the Federal Competition and Consumer Protection Commission (the “FCCPC”), through its Executive Vice Chairman, Mr. Tunji Bello, called for stronger collaboration and harmonised regulatory frameworks among electricity sector regulators, including NERC, the Nigerian Electricity Management Services Agency and the emerging State Electricity Regulatory Commissions, as states begin to establish and operate their own electricity markets pursuant to the Electricity Act, 2023. The FCCPC cited its 2024 intervention on the planned replacement of obsolete prepaid meters as an example of effective regulatory collaboration and stressed that consumer protection in the sector should extend beyond resolving disputes to preventive measures and early identification of risk.

Together, these developments highlight the practical challenges of Nigeria’s ongoing transition to a decentralised electricity market. As states establish their own regulatory commissions, there is a corresponding risk of fragmented technical standards, tariff structures and consumer protection frameworks across jurisdictions. Distribution and generation companies, mini-grid operators and other market participants should monitor both federal-level requirements, such as NERC’s new technical audit guidelines, and emerging state-level regulatory frameworks, as the success of Nigeria’s electricity decentralisation agenda will depend significantly on the degree of coordination achieved between these overlapping layers of regulation.

CONCLUSION

The policy developments in the month of July showed the governments concerted effort in using regulation as a tool for institutional reform by tightening the standards of the financial sector, reinforcing Nigeria’s digital sovereignty, clarifying the exemptions on VAT and zero-rated VAT, modernising institutional frameworks, promoting consumer protection and improving compliance with evolving legal and regulatory standards. At the same time, the debate surrounding the proposed NYSC reforms illustrates that successful public policy requires not only regulatory innovation but also broad stakeholder engagement and public confidence.

A common thread is translating legislative intent into actionable steps with regulatory authorities increasingly moving beyond policy formulation to active supervision, enforcement and institutional coordination. For businesses, investors and regulated entities, compliance can no longer be viewed as a reactive exercise but as an integral component of corporate governance, enterprise risk management and long-term business strategy. Equally, government must ensure that implementation remains transparent, proportionate and consultative so that regulatory reforms achieve their intended objectives without imposing unnecessary barriers to innovation, investment and economic growth.