By Mostafa Kabel

Artificial intelligence is no longer an experimental technology confined to innovation labs. It is actively shaping customer experiences, automating business decisions, and generating original content at scale. As adoption accelerates across industries, tech partners sit at the centre of this transformationresponsible not only for deployment, but for ensuring AI is used legally, ethically, and transparently.

The new phase of AI adoption demands more than technical expertise. It requires partners to rethink legal frameworks, intellectual property models, service accountability, and ethical responsibility. Those who fail to adapt risk regulatory exposure, reputational damage, and erosion of customer trust.

Navigating Legal and Licensing Complexity

One of the most critical areas partners must address is licensing and legal compliance. AI modelsparticularly generative onesare only as deployable as the rights that govern them. Partners must ensure that models are authorised for commercial use and that the outputs they generate do not infringe on copyright, privacy, or data sovereignty regulations.

This becomes especially important in automated decision-making scenarios such as hiring, credit assessments, or fraud detection, where accountability must be clearly defined. Contracts should outline liability boundaries and compliance obligations under frameworks such as GDPR or regional equivalents. Auditability and bias mitigation are no longer optional safeguards; they are legal necessities, particularly in regulated sectors.

Adding another layer of complexity is the infrastructure underpinning AI. The growing reliance on high-performance GPUs introduces exposure to export controls, sanctions, and hardware usage restrictions. In regions with geopolitical sensitivities, partners must ensure AI infrastructure deployments align with government regulations and vendor licensing requirements.

Defining IP Ownership in an AI-Driven World

Intellectual property ownership in AI is rarely straightforward. Partners must clearly distinguish between ownership of the base model, the training data, and the resulting outputs. This becomes especially nuanced in co-development or white-label arrangements.

If a partner fine-tunes a model using a customer’s proprietary data, ownership of that model variantand its outputsmust be explicitly defined. Agreements should also cover redistribution rights, commercial usage, and branding controls. Addressing these questions early not only avoids disputes but establishes trust and alignment between partners and enterprise clients.

Ethical Responsibility as a Business Imperative

When AI influences hiring decisions, financial outcomes, or customer interactions, ethical responsibility becomes inseparable from technical delivery. Partners have a duty to ensure systems are fair, transparent, and non-discriminatory.

This means investing in diverse training data, conducting regular bias assessments, and enabling explainable AI outputs. Importantly, these responsibilities should be reflected in service agreements. Clients should have the right to human oversight, audit AI-driven decisions, and request corrective action when unintended outcomes arise. Ethical guardrails are no longer philosophical idealsthey are essential to regulatory compliance and long-term adoption.

Updating SLAs for Generative AI Reality

Traditional service level agreements were never designed for systems that learn, adapt, and sometimes behave unpredictably. Generative AI introduces challenges such as hallucinations, data drift, and inconsistent outputs, all of which must be acknowledged contractually.

Partners should update SLAs to include AI-specific performance benchmarks, monitoring mechanisms, and escalation procedures. Risk disclaimers must clearly state that AI-generated content may not always be accurate or contextually appropriate. Regular model reviews and updates should also be built into agreements to ensure sustained performance over time. Just as important is educating customerssetting realistic expectations is foundational to responsible deployment.

Building Trust Through Transparency

Trust in AI begins with transparency. Partners reselling or customising third-party models should disclose the model’s source, version, training scope, and known limitations. Any modifications or fine-tuning must be documented and shared with clients.

Labelling AI-generated content, enabling explainability tools, and offering audit capabilities all contribute to greater accountability. Many organisations are also adopting ethical AI frameworks or certifications as a way to formalise best practices. Ongoing education and openness about AI capabilities and limitations are key to building durable client relationships.

Preparing for a More Regulated Future

Looking ahead, the partner ecosystem must take a proactive approach to AI governance. Standardised AI clauses will increasingly become part of contracts, addressing IP rights, data privacy, explainability, and liability. On the technical side, partners must invest in governance platforms, continuous monitoring, and bias detection tools.

Ethically, alignment with global regulations such as the EU AI Act will be critical, even for organisations operating outside Europe. Shared codes of conduct, regular training, and collaboration with policymakers will define the next generation of responsible AI partnerships.

At Mindware, we are already supporting partners on this journey. With deep experience across AI infrastructure, software, and compliance services, we help organisations build secure, scalable, and responsible AI frameworks. From compliant GPU deployments and AI-ready data platforms to ethical governance advisory, we work closely with partners across the MEA region to navigate evolving regulatory and technological demands.

As AI continues to reshape industries, success will belong to those who can deploy it not just quicklybut responsibly, transparently, and ethically.

Mostafa Kabel is the CTO of Mindware Group

By Prince Charles Dickson PhD

A national satire on beer, broken systems, and the baffling value systems that keeps us smiling through tears.

JRD Tata had a friend who used to say that he misplaced and lost his pen very often. Hence, he would use only very cheap pens, so that he didn’t have to worry about losing them. He was worried about his carelessness.

JRD suggested to him to buy the costliest pen he could afford and see what happens.

His friend did just that and purchased a 22-carat gold Cross pen. After nearly six months JRD met him and asked him if his habit of misplacing pens still bothered him? His friend said that he had become very careful about his costly pen, and he was himself surprised how he had changed!

JRD explained to him that it was the value of the pen that had made the difference, and there was nothing wrong with him as a person!

This is what happens in our life. We are careful with things that we value the most.

• If we value our health, we will be careful about what and how we eat.
• If we value our friends, we will treat them with respect.
• If we value money, we will be careful while spending.
• If we value our time, we will not waste it.
• If we value our relationship, we will be careful not to push our limits and risk breaking it.

Everything depends on our perception of value.

There is a global conspiracy theory that Nigerians are the happiest people on earth. A theory so bold that even we, the subjects of this emotional experiment, occasionally pause and ask ourselves, “Me? Happy? With this economy? With this exchange rate? With this insecurity? With the national grid collapsing due to national greed.”

Yet the data is undeniable: ₦1.54 trillion spent on beer in nine months.

If happiness had a budget line, this would be it.

Nigeria may not have reliable electricity, but we have reliable consumption habits. The country may not produce enough jobs, but we produce enough empty bottles. Our security architecture may look like it was designed by tired civil servants after pepper soup, but our nightlife runs like Swiss clockwork.

There are many proofs that Nigerians love enjoyment, but this new figure has carried first position. It is now official: Nigerians may not value their leaders, their hospitals, their future or their taxes, but they value cold beer like a covenant.

And who can blame us?

Living in Nigeria is like being in a relationship with someone who loves you in theory but forgets you in practice. You wake up to hardship, go to bed with uncertainty, and somewhere in the middle, your landlord sends a broadcast message saying he loves peace but is increasing rent.

If you don’t drink, what will you do?

Meditate?

You cannot meditate when the price of rice is rising and the price of petrol is behaving like a spiritual attack. Nigerians are not drinking for pleasure; many are drinking to survive the news cycle.

Every day: One tragedy, one inflation spike, one new policy, one new exchange rate. How won’t the nation drink?

We drink the way other countries run public healthcare: consistently.

We drink the way other countries fix roads: passionately.

We drink the way other nations repair institutions: with conviction.

Nigeria is the only country where people can be discussing kidnapping on one table and ordering more bottles on the next.

“Guy, dem kidnap three people for that side.”

“Ha! Serious? Abeg add two plates of peppered meat.”

It is emotional multitasking.

Because Nigerians have mastered the rare art of holding suffering in one hand and enjoyment in the other without spilling either. It is the only balance this country has ever achieved.

Bandits are roaming.

Inflation is jogging.

Cost of living is sprinting.

But Nigerians are still saying,

“Life no hard reach like that… at all at all.”

It is denial, yes.

But elite-level denial.

UNESCO should document it.

We drink to forget.

We drink to remember.

We drink because the music is good.

We drink because NEPA has taken light again.

We drink because work is stressful.

We drink because work is not even coming.

We drink because politicians are misbehaving.

We drink because politicians are behaving exactly as expected.

We drink because Nigeria is Nigeria-ing.

When a country’s biggest coping mechanism is bottled, malted and refrigerated, you know the nation needs therapy. But therapy is expensive.

Beer is cheaper.

Well… it used to be.

Now, even the beer is complaining.

Yet we buy it.

We misplace the expensive things — life, governance, education, national peace — and protect the cheap ones — gossip, entertainment, and political drama.

If value shaped our behaviour the way it should, Nigeria would be a paradise.

But Nigerians value vibes.

We protect vibes.

We invest in vibes.

We sacrifice for vibes.

We build GoFundMes for vibes.

Meanwhile, the country?

Well, the country is somewhere behind us, shouting for attention like the last-born in a large family.

A Hausa warning says: “Duk abin da kake raina zai haɗiye ka.”Whatever you fail to value will eventually consume you.

Nigeria’s national value system looks like this:

• We value enjoymentmore than savings.
• We value surviving todaymore than preparing for tomorrow.
• We value laughing at problemsmore than solving them.
• We treat life like a cheap pen.
• We treat enjoyment like a gold-plated Cross pen.

Our happiness is rebellious.

Stubborn.

Almost irresponsible.

When prices rise, Nigerians laugh.

When politicians misbehave, Nigerians make memes.

This happiness is not ordinary joy.

It is endurance masquerading as laughter.

It is survival packaged as banter.

It is pain dressed in agbada.

Happiness is the last thing Nigeria has not taxed.

Yet.

Imagine, just imagine, if Nigerians guarded national development the way they guard cold drinks at a party:

Nobody should touch it except authorized personnel.

If it falls, we mourn.

If it finishes, we riot.

What if:

• We valued security the way we value weekend outings?
• We valued accountability the way we value entertainment?
• We valued public good the way we value personal enjoyment?
• We valued the future the way we value “TGIF”?

Nigeria would transform overnight.

But instead, we are a nation where the price of alcohol rises, and people still buy it. But the price of governance rises, and nobody demands receipts. Because we have conditioned ourselves to protect relief more than responsibility.

Our happiness is admirable.

Our resilience is legendary.

Our adaptability is world-class.

But none of these things are development strategies. A laughing population is not automatically a thriving nation.

Let us keep our joy, because without it, this country will finish us. But let us also assign proper value to the things that build nations: institutions, planning, justice, safety, productivity, and accountability.

We have already proven we know how to drink. Now let us prove we know how to think. Because as it stands, the beer companies are enjoying the value we refuse to give to the country itself.

And until Nigeria becomes a gold pen, not a disposable biro, we will continue to lose it, forget it, misuse it, and replace it with laughter—May Nigeria win.

By Blaise Udunze

The latest in the Nigerian banking sector, as banks grapple with the recapitalization compliance deadline, is confronted with a familiar yet unsettling problem that stems from rising loan defaults amid expanding credit. Data from the Central Bank of Nigeria’s (CBN’s) latest macroeconomic outlook of 2025 showed that the banking industry’s Non-Performing Loans ratio climbed to an estimated 7 percent, pushing the sector above the prudential ceiling of 5 percent.

This deterioration has occurred even as banks report improved credit availability and strong loan demand across households and corporates. At first glance of the development, the narrative seems to defy logic in a real sense. However, below this lies a deeper story of macroeconomic strain, policy-induced shocks, and, most worryingly, persistent corporate governance abuses that continue to erode asset quality from within.

To be clear, Nigeria’s current wave of loan defaults cannot be blamed on reckless borrowers alone. The operating environment has become unusually hostile. Inflation, as reported by the National Bureau of Statistics (NBS), recently suggests that headline inflation is cooling and growth indicators show tentative improvement; regrettably, more Nigerians are slipping below the poverty line, eroding household purchasing power and raising operating costs for businesses.

Especially in the small and medium-sized enterprises, though, the economic growth appears positive, but has been uneven and insufficient to offset cost pressures in this space. This has heralded weak consumer demand that has squeezed revenues across retail, manufacturing and services, causing shrinking cash flows and also loan obligations remain fixed or, in many cases, rise. In such conditions, repayment stress is inevitable.

Tight monetary policy has compounded the problem. The CBN’s aggressive rate hikes, aimed at restoring price and exchange-rate stability, have significantly raised lending rates. Variable-rate loans have become more expensive mid-tenure, and businesses that borrowed under lower-rate assumptions now face repayment shocks. Even otherwise viable firms have found themselves pushed into distress as interest expenses consume a growing share of income. Going by the official survey for the last quarter of 2025, it shows that financial pressure on borrowers has intensified as more borrowers are failing to repay loans across all major categories for both secured loans, unsecured loans and corporate loans.

Exchange-rate volatility has delivered another blow. The Naira’s depreciation and FX reforms have sharply increased the burden on borrowers with dollar-denominated loans but Naira income. Import-dependent businesses have seen costs surge, while FX scarcity continues to disrupt production and trade cycles. For many firms, the problem is not poor management but currency mismatch. Loans that were sustainable under a more stable exchange regime have become unserviceable almost overnight.

Layered onto these macro pressures is Nigeria’s weak business environment, which has further worsened the situation, alongside chronic power shortages forcing firms to rely on costly alternatives, logistics challenges and insecurity disrupting supply chains, and regulatory uncertainty complicates planning. More on the burner that has continued to heighten the challenges is the multiple taxation and compliance burdens, further compressing margins. In survival mode, businesses naturally prioritise payrolls, energy, and raw materials over debt service. Defaults, in this context, are often a symptom rather than the disease.

Yet while these systemic pressures explain much of the stress, they do not tell the whole story. A critical and often underemphasised driver of rising loan defaults lies within the banks themselves, most especially corporate governance abuse, which emanates particularly from insider-related lending. This is the uncomfortable truth that Nigeria’s banking sector has struggled to confront decisively.

Corporate governance, at its core, is about discipline, accountability, and oversight. In the banking context, it determines how credit decisions are made, how risks are assessed, and how early warning signs are addressed. Where governance is weak, loan quality inevitably suffers. Nigeria’s history offers painful lessons, especially the banking failures of the 1990s to the post-2009 crisis clean-up, insider lending and boardroom abuses have repeatedly emerged as central culprits.

Recent evidence suggests that the problem has not disappeared. Industry estimates indicate that a significant portion of bad loans remains linked to insider and related-party exposures. Former NDIC officials have disclosed that, historically, directors and insiders accounted for as much as 40 per cent of bad loans in deposit money banks, with a handful of institutions holding the majority of insider-related NPLs. It would be said that governance frameworks have improved since then, but enforcement gaps still persist.

Insider abuse manifests in several ways. Loans are extended to directors, executives, or connected parties with inadequate due diligence. Credit decisions are influenced by relationships rather than repayment capacity, and this has been one of the critical problems as collateral is overvalued, covenants are weak, and stress testing is often superficial. When early signs of distress emerge, enforcement is delayed, restructuring is repeated without fundamental improvement, and recoveries are treated with undue caution to avoid internal embarrassment or exposure.

The result is predictable. These loans default faster and are harder to recover. Worse still, they distort bank balance sheets by crowding out credit to productive sectors. When insiders default, the signal to the wider market is corrosive. Here, credit discipline is optional, and accountability is selective, and it further fuels moral hazard, encouraging strategic defaults even among borrowers who could otherwise repay.

Governance failures also weaken loan recovery processes. Poorly empowered risk and audit committees miss warning signs or fail to act decisively because the system has been built to fail. Legal remedies are pursued slowly, if at all. In an environment where judicial delays already undermine contract enforcement, such reluctance turns manageable problem loans into fully impaired assets. Over time, NPLs accumulate not because recovery is impossible, but because it is poorly pursued.

Compounding these internal weaknesses are government policy shifts and fiscal stress, which have become major external shock absorbers for bank balance sheets. Policy inconsistency has made cash flow planning increasingly difficult for borrowers. For instance, the sudden tax changes or aggressive enforcement drives will definitely alter cost structures overnight. Delays in government payments to contractors starve businesses of liquidity, and this will surely push otherwise solvent firms into default. In theory, although removing fuel subsidies, while economically justified, have often occurred without adequate transition buffers, transmitting immediate cost shocks across energy, transport, and consumer goods sectors.

The banking sector, heavily exposed to government-linked projects and regulated industries, absorbs these shocks directly. Loans tied to this sector showed that the banks are hugely exposed to oil and gas, power, and infrastructure; they are particularly vulnerable when fiscal pressures delay receivables or alter contract economics. For instance, a total of 9 banks’ exposure to the Oil & gas sector increased to N15. 6 trillion in 2024, representing about 94.4per cent increase from N10. 17 trillion reported in 2023 financial year. It is therefore no coincidence that NPL concentrations remain high in these sectors. In effect, fiscal stress is being intermediated through bank balance sheets.

When the CBN ended the special leniency measures known as forbearance in 2025, the real extent of loan stress in the banking industry became much clearer. For a longer time, pandemic-era reliefs allowed banks to renegotiate stressed loans without immediately classifying them as non-performing. While this helped preserve surface stability, it also masked underlying vulnerabilities. With the end of forbearance, many restructured facilities have crystallised as bad loans, pushing the industry NPL ratio above the prudential ceiling. This does not mean risk suddenly increased; it means it is now being recognised.

To the CBN’s credit, transparency has improved as the industry witnessed stricter classification rules and reduced forbearance have forced banks to confront economic truth rather than regulatory convenience. And, despite the challenges, the financial system appears to be generally sound because banks have enough cash to meet obligations and sufficient capital buffers that still exceed regulatory floors, while these buffers are under pressure. Though the ongoing recapitalisation efforts are expected to provide additional buffers.

However, stability should not be confused with health. Rising NPLs, even in a liquid system, carry real consequences. Banks must set aside provisions, eroding profitability and capital. Credit supply tightens as lenders grow cautious, starving the real economy of funding. One known fact is that the moment governance and transparency concerns grow, investors, particularly foreign ones, become less willing to commit capital and this loss of confidence eventually slows down overall economic growth.

The policy response, therefore, must go beyond macroeconomic management. While stabilising inflation and the exchange rate is essential, it is not sufficient. Governance reform within banks must be treated as a systemic priority, not a compliance exercise. Insider lending rules must be enforced rigorously, with real consequences for violations. Boards must be strengthened, not merely in composition but in independence and courage. Risk and audit committees must be empowered to challenge management and act early.

Equally important is addressing the fiscal-banking nexus. The government must recognise that policy volatility and payment delays are not costless. They translate directly into higher credit risk and weaker financial intermediation. A more predictable policy environment, timely settlement of obligations, and credible transition frameworks for major reforms would significantly reduce default risk without a single naira of direct intervention.

The Global Standing Instruction framework, which the CBN continues to promote, can help improve retail and MSME recoveries. But frameworks cannot substitute for culture. Credit discipline begins at the top. When banks lend to themselves without consequence, the entire system pays the price.

Nigeria’s rising loan defaults are not merely an economic statistic; they are a governance signal. They reflect a system under stress, yes, but also one still wrestling with old habits. If recapitalisation is to be meaningful, it must be accompanied by recapitalisation of trust, through transparency, accountability, and consistent policy. Otherwise, the cycle will repeat the same strong balance sheets on paper, weak loans underneath, and another reckoning deferred, but not avoided.

Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]