How to Operate an NGO in Nigeria: Compliance Obligations under Nigerian Law

Non-Governmental Organisations (NGOs) are at the heart of social change in Nigeria, tackling issues ranging from education to healthcare to human rights. Making this impact, however, comes with responsibilities. To operate transparently and stay on the right side of the law, NGOs must navigate a web of legal, regulatory, and ethical obligations. Understanding these compliance requirements isn’t just about avoiding penalties; it’s about building trust with stakeholders such as employees, donors, beneficiaries, and the public. Running an NGO shouldn’t just be about doing good; it’s about doing it by the book.

This article highlights the key compliance obligations for NGOs operating in Nigeria.

Incorporation of an Incorporated Trustees

To operate legally, an NGO must be registered with the Corporate Affairs Commission (CAC) under Part F of the Companies and Allied Matters Act (CAMA) 2020 as an Incorporated Trustee. This registration gives the NGO legal status, allowing the NGO to own property, enter into contracts, sue or be sued, and gain recognition both locally and internationally.

Annual Returns

An NGO must file annual returns with the CAC to remain in good standing. This filing of annual returns is not just a formality; it serves as a public record confirming that the NGO is active, and it enhances public accountability.

The annual return must be filed not earlier than June 30 and not later than December 31 each year. It should be accompanied by an audited statement of accounts, prepared by a qualified auditor, showing how the NGO’s funds have been managed.

Audited Financial Statement

In addition to annual returns, NGOs are required to prepare audited financial statements to ensure transparency and accountability. While most NGOs are not classified as Public Interest Entities (PIEs) under the Financial Reporting Council of Nigeria (FRCN) Act 2011, they are still expected to maintain proper financial records and have their accounts independently audited.

For NGOs that do meet the PIE criteria, they must adhere to FRCN reporting standards and submit audited financial statements to FRCN within 60 days of their Board of Trustees’ approval.

Bi-Annual Statement of Affairs

NGOs are required to prepare a bi-annual Statement of Affairs showing their financial position—including assets, liabilities, and equity—helping the Board of Trustees and regulatory authorities understand the NGO’s financial health and sustainability. The statement of affairs covers two periods each year. The first half of the year, from January 1 to June 30, must be filed by July 15, while the second half, from July 1 to December 31, must be filed by January 15 of the following year. Carrying out these filings provides transparency on assets, liabilities, and equity, and helps maintain donors’ and regulators’ confidence in the NGO.

Compliance Audit Returns (CAR)

NGOs are required to comply with the Nigeria Data Protection Act (NDPA) 2023 and the General Application and Implementation Directive (GAID) 2025, which includes submitting Compliance Audit Returns (CAR). NGOs that have processed personal data of over 1,000 data subjects in 6 months or over 2,000 in 12 months are required to file a CAR.

To comply, NGOs must engage a Data Protection Compliance Organization (DPCO) to audit their data processing activities. After the audit, the DPCO files the CAR with the NDPC by the deadline of 15 March each year, and the NGO is required to retain proof of submission for record-keeping and regulatory compliance.

Special Control Unit Against Money Laundering (SCUML) Registration

Under the Money Laundering (Prevention and Prohibition) Act, 2022, NGOs are classified as “Designated Non-Financial Institutions” (DNFIs). As such, they are required to register with the Special Control Unit Against Money Laundering (SCUML), a unit operating under the Economic and Financial Crimes Commission (EFCC).

Registration with SCUML ensures that NGOs operate transparently and are not inadvertently used as channels for money laundering or terrorism financing. Once registered, NGOs may also be required to file certain transaction/activity reports as detailed in the SCUML AML/CFT regulations issued in 2024.

Building an Internal Compliance Framework for NGOs

To implement compliance with the above, every NGO should establish a strong internal compliance framework. Below are the essential components for implementing the framework based on the typical operations of an NGO in Nigeria:

Conclusion

A well-structured NGO is not only defined by its vision and objectives but also by its commitment to proper governance and compliance. By meeting the foundational requirements for registration and establishing strong internal controls, NGOs can operate effectively, build credibility, and achieve sustainable impact.