COUNTRY GUIDE
A short guide to building a dedicated offshore team in Nigeria
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Abuja
English
227.9 million
GMT+1
870,000
Nigerian Naira (NGN)
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$1.56 billion
$410 million (in 2024)
Abuja
English
227.9 million
GMT+1
870,000
Nigerian Naira (NGN)
$1.56 billion
$410 million (in 2024)
Nigeria’s tech industry has evolved from a niche sector into a key pillar of national development and economic diversification. Once dominated by telecommunications, it now spans a wide range of digital services, from enterprise software and blockchain to healthtech, creative AI, and logistics platforms. The ecosystem is fueled by an ambitious, youthful population, growing investor confidence, and increasing demand for localized digital solutions.
A major strength of Nigeria’s tech scene is its adaptability. In response to infrastructural gaps and economic volatility, startups have pioneered scalable, mobile-first solutions for payments, education, transport, and farming. Tech hubs and accelerators across the country have played a crucial role in supporting early-stage ventures and building developer capacity.
Government and private sector initiatives are also beginning to converge, with public investments in digital training, broadband expansion, and startup regulation. While challenges remain, such as inconsistent policy frameworks and talent migration, Nigeria’s tech sector continues to signal its global relevance through resilience, creativity, and rapid growth.
Payroll cycle
The standard payroll cycle in Nigeria is monthly, with most employers paying salaries either on the last working day of the month or within the first few days of the following month. This cycle aligns with statutory requirements for tax and pension remittances and is the most commonly accepted payroll rhythm across the formal employment sector.
Employer taxes
When hiring employees in Nigeria, employers are responsible for several statutory contributions beyond basic salary. One of the most significant is the pension contribution, where employers are required to contribute 10% of the employee’s gross monthly salary, while employees contribute 8%, making a total of 18%. This amount is remitted to a Pension Fund Administrator in compliance with the Pension Reform Act.
Employers must also contribute to the Employee Compensation Fund, which is managed by the Nigeria Social Insurance Trust Fund (NSITF). This contribution, typically around one percent of gross payroll, covers work-related injuries and occupational hazards. In addition, eligible companies (those with at least five employees or an annual turnover above ₦50 million) are expected to contribute one percent of their annual payroll to the Industrial Training Fund, which supports workforce development across the country.
Another important responsibility is managing employee income tax under the Pay-As-You-Earn (PAYE) scheme. Employers must deduct the applicable amount from employees’ salaries and remit it to the appropriate state tax authority each month. The tax rates are progressive, based on income levels. Employers are also required to deduct and remit 2.5% of an employee’s basic salary to the National Housing Fund, though participation in this scheme can be optional in some private-sector cases.
Overtime pay
The typical full-time workweek in Nigeria is 40 to 45 hours, spread over 5 or 6 days. Anything beyond the contracted daily or weekly hours may be considered overtime.
Overtime pay in Nigeria is governed primarily by employment contracts, company policy, and the Labour Act of 2004. While the Act does not specify exact overtime rates, it does recognize the concept of overtime and requires fair compensation for extra hours worked beyond normal working hours.
Paid leave
Under the Nigerian Labour Act, employees who have worked for at least 12 consecutive months are entitled to a minimum of six working days of paid annual leave. However, most employers, especially in the formal and tech sectors, offer between 10 to 20 working days annually, depending on seniority and company policy.
Leave is typically earned on a pro-rata basis and can be carried over or cashed out, subject to the employer’s terms. Public holidays that fall within the leave period are not counted as part of the annual leave.
Sick leave
Employees are entitled to up to 12 working days of paid sick leave per year under the Labour Act, provided they present a valid medical certificate. During this period, the employee must continue to receive full pay. In practice, some companies offer more generous sick leave policies, especially for longer-term illness or medical recovery. Employers may also require periodic updates or additional documentation for extended sick leave. There is no legal provision for long-term paid medical leave, so such arrangements are usually determined by the employer’s discretion or negotiated benefits.
Public and provincial holidays
Nigeria observes 11 public holidays annually, encompassing national, religious, and secular observances.
Notice period
In Nigeria, the length of notice required for termination of employment depends largely on how long the employee has been with the company. The Labour Act provides minimum notice periods that range from one day for very short-term employment to one month for those who have been with an employer for more than five years.
However, in the tech sector and other formal industries, it's common for employment contracts to specify longer notice periods, often one month for junior roles and up to two or three months for senior positions. Either party may also choose to make a payment in lieu of notice, effectively ending the employment relationship without requiring the notice period to be worked.
13th Month Bonus
The 13th month bonus, while not a legal requirement, is a widely accepted practice in Nigeria. Typically paid in December, it serves as an end-of-year bonus or holiday allowance and is often seen as a gesture of appreciation for the employee's contribution throughout the year. Some companies offer it as a fixed benefit, while others treat it as discretionary or performance-based. Despite not being mandated by law, employees in many industries have come to expect this bonus as part of their overall compensation package.
Are you interested in scaling software development in Africa? Nigeria has much to offer.
Nigeria is emerging as a key destination for global tech teams looking to scale efficiently. With a strong foundation in software engineering, a growing developer community, and a track record of innovation, the country offers access to skilled professionals across a wide range of technologies.
For companies seeking flexibility, staff augmentation makes it easy to engage Nigerian developers without the legal or administrative burden of setting up a local entity. Through local partners, you can onboard vetted talent quickly while payroll, compliance, and HR are handled for you. This allows you to scale your team on demand, focus on core development, and stay agile in a competitive market.
Whether you're building new features, expanding support capacity, or accelerating delivery timelines, Nigeria’s tech talent can help you grow with confidence.
Looking to hire software developers in Nigeria? Contact us to explore flexible hiring options.
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Nigeria's IT industry has become a key driver of economic growth and innovation in West Africa. With a strong entrepreneurial culture, rapid digital adoption, and expanding infrastructure, the country has emerged as a hub for fintech, software development, e-commerce, and AI innovation.
Major global tech players such as Google, Microsoft, and Meta have established a presence in Nigeria, while local startups continue to attract significant investment. The sector contributes approximately 18% to national GDP and is supported by government initiatives aimed at boosting digital skills and infrastructure.
Nigeria has one of the largest and fastest-growing tech talent pools in Africa, with over 870,000 developers as of 2024. The country benefits from a young, English-speaking population and a strong university network producing thousands of STEM graduates annually. In addition to formal education, local bootcamps, online training, and tech communities like Andela, Decagon, and CcHub have played a vital role in upskilling developers. Nigerian talent is known for adaptability and global outlook, making them attractive for remote and distributed teams.
Hiring in Nigeria requires navigating employment laws, tax regulations, and immigration rules if hiring cross-border. Foreign companies can engage Nigerian developers through staff augmentation firms to avoid establishing a legal entity locally. Businesses must also be mindful of data protection regulations, such as the Nigeria Data Protection Act (2023), and ensure compliance when handling personal or customer data.
Setting up a dedicated development team in Nigeria can be done through three main models: hiring directly via a local entity, partnering with a staff augmentation provider, or using a managed outsourcing firm.
The staff augmentation route is particularly popular as it offers access to vetted talent while minimizing legal complexity. Most providers handle payroll, taxes, compliance, and HR, allowing businesses to focus on team performance and delivery. Infrastructure in cities like Lagos and Abuja supports hybrid and remote team models, with co-working spaces, stable internet, and a strong tech culture.
English is the official language in Nigeria, and tech professionals are fluent. Nigerian developers are accustomed to working across time zones and using global collaboration tools like Slack, GitHub, Jira, and Zoom. While time zone differences with regions like North America require coordination, overlap with Europe is generally favorable. Clear onboarding, regular check-ins, and cultural awareness can further enhance remote team collaboration and alignment.
Challenges may include power reliability, internet stability in non-urban areas, brain drain, and occasional regulatory unpredictability. However, most professionals working remotely have backup power (e.g., inverters or generators) and access to co-working spaces with reliable infrastructure. Partnering with trusted local providers can help mitigate compliance and HR risks. Retention strategies such as competitive compensation, upskilling, and engagement also reduce attrition in long-term projects.
Nigeria is increasingly recognized as a viable alternative to traditional outsourcing destinations. The country is seeing rising demand for software engineering, DevOps, data analytics, QA, and product design talent.
Outsourcing trends favor flexible, remote-first models, with businesses leveraging staff augmentation to scale development teams without long-term commitments. Sectors such as fintech, edtech, and healthtech are particularly active in cross-border partnerships. Government support for tech exports is also growing, enhancing Nigeria’s role in the global outsourcing landscape.
Businesses looking to engage tech talent in Nigeria should:
Nigeria is poised for continued growth as a tech talent exporter, with improved infrastructure, investor interest, and policy reforms supporting its global competitiveness. As remote work becomes standard, the country’s large, young, and digital-savvy workforce positions it as a strategic partner for tech-driven businesses worldwide.
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