Building strong data protection framework: Essential guardrails for Nigerian start-ups
By Omoruyi Edoigiawerie, Esq
Data is one of the most valuable assets for any start-up, yet it is often one of the most neglected. Many Nigerian start-ups focus on growth and product development but fail to put in place basic data protection structures. The reality, however, is that a start-up’s ability to secure user data is not just a compliance requirement but a business imperative.
Having worked with a sizeable number of start-ups, emerging businesses and social impact organization, I have seen first-hand how poor data governance can lead to regulatory sanctions, loss of investor confidence, and reputational damage.
Some start-ups only recognize the importance of data protection after suffering a breach or losing a deal during due diligence.
As we wrap up privacy week, I have chosen to outline six essential data protection guardrails that Nigerian start-ups must integrate into their organizational framework. These measures will help ensure compliance with the Nigeria Data Protection Act (NDPA), other statutory guidelines and best industry practice, protect user information, and build trust with customers and investors.
1. Understanding the Regulatory Landscape
Many start-ups assume data protection laws do not apply to them, particularly if they are small or at an early stage. However, the NDPA applies to any business that collects, processes, or stores personal data, regardless of size. Whether a start-up operates in fintech, e-commerce, agri-tech, health-tech, or ed-tech, compliance is mandatory.
Founders should familiarize themselves with key regulatory requirements, including:
• Registration with the Nigeria Data Protection Commission (NDPC) if handling large-scale personal data.
• Providing a clear privacy policy that informs users of how their data is collected, used, and shared.
• Obtaining user consent before collecting personal data.
Understanding the regulatory environment from the outset prevents unnecessary legal risks and ensures that data protection is built into business operations rather than treated as an afterthought.
2. Assigning Responsibility for Data Protection
One of the biggest gaps in many start-ups is the absence of clear internal responsibility for data protection. Founders are often focused on product development and market expansion, leaving data protection as an undefined function. However, someone within the start-up whether the Chief Operating Officer, Chief Technology Officer, or an external consultant, must be responsible for ensuring compliance.
This person should oversee the development of internal policies, ensure that third-party vendors comply with data protection standards, and manage data breach responses. The absence of such oversight can lead to regulatory violations and operational inefficiencies.
For start-ups that process sensitive data or operate at scale, appointing a Data Protection Officer (DPO) or engaging a legal expert is advisable.
3. Implementing Privacy-by-Design in Product Development
A common mistake among start-ups is treating data protection as an issue to be addressed later, rather than integrating it into product design from the start. Privacy-by-design ensures that data protection is built into a start-up’s technology and business processes from the outset. My article last week dealt in detail with Privacy-by-design.
Start-ups that incorporate data protection from the beginning avoid costly redesigns and compliance failures down the line.
4. Establishing Secure Data Storage and Access Controls
Data breaches are a major risk for start-ups, particularly those in fintech, e-commerce, and health-tech. Weak security measures expose businesses to cyberattacks, loss of customer trust, and regulatory penalties. Many breaches occur due to poor data storage practices, weak passwords, or unrestricted employee access to sensitive information.
To mitigate these risks, start-ups should:
• Encrypt all sensitive data both in transit and at rest.
• Implement strict access controls -not every employee needs access to all customer data.
• Use multi-factor authentication (MFA) to prevent unauthorized logins.
A well-secured start-up reduces its exposure to breaches and enhances customer confidence in its services.
5. Managing Third-Party Risks
Start-ups frequently engage third-party vendors for cloud storage, payment processing, and customer data management. However, outsourcing data processing does not transfer legal responsibility. If a vendor suffers a breach, the start-up remains accountable to regulators and customers.
To reduce third-party risks, start-ups must do these three things:
a) Sign Data Processing Agreements (DPAs) with all vendors handling customer data.
b) Conduct due diligence to ensure that vendors comply with data protection laws.
c) Limit data sharing to only what is necessary for the service being provided.
Third-party data risks are often overlooked, but they pose some of the biggest compliance and security threats to start-ups.
6. Handling Data Breaches Responsibly
Even with strong security measures, data breaches can still occur. What matters is how a start-up responds. A poorly managed data breach can lead to regulatory penalties, lawsuits, and loss of investor confidence.
The NDPA requires start-ups to notify the NDPC of serious breaches within 72 hours and inform affected users promptly. Having a Data Breach Response Plan in place ensures a coordinated response. This should include:
• Immediate containment measures to stop further data exposure.
• Internal investigation to determine the cause of the breach.
• Timely notification to affected customers and regulatory authorities.
Start-ups that handle breaches transparently and efficiently demonstrate accountability and maintain trust with their users.
*Data protection as a strategic advantage
In today’s digital economy, data protection is not merely a regulatory requirement, it is a powerful differentiator that can set start-ups apart in a competitive market. Beyond compliance, a strong data governance framework enhances credibility, builds stakeholder confidence, and fosters long-term growth.
Investors and strategic partners are placing greater emphasis on data security and regulatory adherence when evaluating funding or acquisition opportunities. Start-ups that implement rigorous data protection policies, maintain secure systems, and demonstrate proactive compliance are not only mitigating risks but also positioning themselves as attractive, trustworthy, and investment-ready businesses.
By embedding data protection at the core of their operations, start-ups can unlock new opportunities, strengthen market positioning, and drive sustainable success in an increasingly data-driven world.
*Conclusion
Data protection is more than a legal obligation, it is a strategic necessity for the long-term sustainability and success of start-ups. For Nigerian start-ups, embedding robust privacy, security, and compliance measures into their operational framework is not just about regulatory adherence but also about fostering trust, mitigating risks, and enhancing business resilience.
By proactively integrating these safeguards from the outset, start-ups can navigate complex regulatory landscapes with confidence, minimize exposure to legal and financial liabilities, and position themselves as responsible, forward-thinking enterprises in an increasingly data-driven economy.
*Omoruyi Edoigiawerie is the Founder and Lead Partner at Edoigiawerie & Company LP (EandC Legal), a full-service law firm offering bespoke legal services with a focus on start-ups, established businesses and upscale private clients in Nigeria. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. His firm can be reached by email at [email protected]
