Nigerian companies are ramping up investments in privacy protection as they scale artificial intelligence (AI) adoption, with 40 percent of organisations now allocating more than 30 percent of their IT budgets specifically to privacy measures.
This is contained in a new study titled “The AI Privacy Equation: The Nigerian Model of Responsible AI Adoption,” conducted by Arion Research on behalf of global technology company Zoho.
According to the report, Nigerian businesses are not only embracing AI but are also embedding strong governance frameworks into their deployment strategies. It found that 94 percent of organisations already have a dedicated privacy officer or team in place, a figure that far exceeds global averages.
“Forty percent of organisations allocate more than 30 percent of their IT budgets specifically to privacy protection, reflecting the belief that strong governance is a competitive advantage rather than a constraint,” the report noted.
The financial services industry is driving this transformation, accounting for 29 percent of survey respondents. Within the sector, AI is being applied mainly to customer service automation (49 percent), software development and enhancement (46 percent), and marketing optimisation (32 percent). Each of these use cases, the report stressed, is being deployed with a strong emphasis on privacy principles.
Skills gap remains a challenge
Despite the progress, the report highlighted persistent talent shortages as a major barrier. About 37 percent of organisations cited lack of technical expertise as their biggest challenge in scaling AI, while 35 percent flagged privacy and security concerns.
To bridge these gaps, many businesses are ramping up skills development. Sixty-nine percent of organisations said they are prioritising data analysis and interpretation, 53 percent are focusing on AI literacy, and 40 percent are investing in prompt engineering for generative AI systems.
The introduction of the Nigeria Data Protection Act has also sharpened regulatory awareness. Nearly 65 percent of organisations reported an increase in regulatory consciousness since the law came into effect. Many companies have begun embedding compliance into their AI systems, with 57 percent conducting regular privacy audits, 57 percent practising data minimisation during AI training, and 52 percent adopting explainability requirements for AI-driven decisions.
The report underscored the role of top leadership in advancing AI adoption. More than half of the survey respondents hold CEO or executive positions, a signal of high-level commitment to embedding AI at scale.
Overall, 93 percent of organisations surveyed have embarked on their AI journey. Of these, 31 percent reported achieving advanced integration across their operations, while 26.5 percent are deploying AI across multiple departments.
Privacy outcomes also appear to be improving. The study showed that 84 percent of organisations have strengthened privacy measures since adopting AI, with 66 percent describing the improvements as significant.
Privacy and innovation can co-exist
Michael Fauscette, CEO and chief analyst at Arion Research, said the Nigerian model provides evidence that privacy and innovation can reinforce each other.
“The Nigerian model challenges the conventional wisdom that AI adoption requires privacy trade-offs. When 84 percent of organisations strengthen their privacy measures through AI implementation rather than weakening them, it demonstrates that privacy-conscious design can actually enhance AI outcomes,” Fauscette said.
He added that Nigerian firms are showing that robust governance should not be seen as a constraint but as a competitive advantage that builds customer trust and supports sustainable AI deployments.
The report surveyed 386 organisations across Nigeria, cutting across financial services, technology, and other sectors.
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