Poor AI Governance Could Drive Capital Flight, NGX Chair Warns
The Chairman of Nigerian Exchange Group, Dr Umaru Kwairanga, has warned that weak governance of Artificial Intelligence systems could undermine investor confidence, distort financial markets and trigger capital flight from Nigeria.
Speaking at the InnovateAI Conference Lagos 2026, Kwairanga said the financial risks posed by poorly regulated AI are no longer theoretical, particularly as the technology becomes embedded in credit scoring, algorithmic trading, and compliance monitoring and risk management systems.
“Across the world, capital flows toward markets that demonstrate predictability, governance and trust,” he said. “If AI systems are opaque, discriminatory or vulnerable to breaches, that risk is priced into companies, sectors and ultimately into the country itself.”
He cautioned that AI-driven credit models built on biased data could systematically exclude segments of the population, while poorly supervised automated trading systems could amplify volatility and destabilise institutions.
“These are structural risks that can erode public confidence,” he stated, stressing that trust remains the foundation of capital market stability.
Kwairanga referenced recent enforcement actions by the Nigeria Data Protection Commission as evidence that data governance now carries tangible financial and reputational consequences.
“Data governance is no longer optional — it is enforceable,” he said, adding that in capital markets, trust is “the oxygen of the system,” underpinning every trade and investment decision.
According to him, Nigeria has moved beyond debating whether to adopt AI. Market forces are already driving integration. The more urgent question is how to embed accountability, transparency and oversight into AI deployment.
He called for regulatory clarity, stronger board-level supervision, investment in AI literacy across public and private sectors, and the development of localised AI models that reflect Nigeria’s socio-economic realities.
Kwairanga warned against over-reliance on foreign-trained AI systems that may not align with domestic contexts, cautioning that such dependence could deepen inequality rather than promote inclusion.
“Responsible AI in Nigeria must be context-aware. It must solve Nigerian problems — from financial inclusion to healthcare delivery, agriculture productivity and energy optimisation,” he said.
He urged policymakers and market participants to anchor Nigeria’s AI strategy on trust, talent and transparency, arguing that countries that get governance right will attract investment, partnerships and skilled talent.
“Nations that get AI governance right will attract investment. Those that do not will face digital fragmentation and capital flight,” he warned.
The NGX Chairman reaffirmed the Exchange’s commitment to balancing innovation with robust oversight, noting that responsible AI is not anti-innovation but essential for long-term market sustainability.
“The future will belong to institutions that combine innovation with integrity, and technology with trust,” he said.
