AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
The main risks of a sole agent in Nigeria are that the agent ends up holding your NAFDAC registration or trademark, that exclusivity with no targets locks you out of the market, and that the contract is unclear on commission, authority and what happens at the end. Limit them by registering the brand in your own name, controlling the power of attorney you give for NAFDAC, tying exclusivity to targets, and agreeing termination and hand-back steps before you sign.
An agent does not buy your goods. It finds buyers, negotiates and sometimes signs contracts in your name, and it earns a commission. LawCare Nigeria's April 2026 guide recommends agency for technical, high-value or specialised products where the supplier wants closer control than a distributor gives. "Sole agent" usually means you appoint only one agent and sometimes also promise not to sell directly. The arrangement can work well. Most of the problems come from what the agent holds when the relationship ends.
Pitfall 1: the agent holds your product registration
For food, cosmetics, drugs and medical devices, someone in Nigeria has to apply to NAFDAC. The imported food and imported cosmetics guidelines both require a power of attorney from the manufacturer, notarised in the country of manufacture, valid for at least five years, and stating who owns the brand. The factory inspection invitation letter also names a Nigerian local agent. Registration certificates under both guidelines are valid for five years.
If your agent is the applicant and the relationship turns bad, you may find that your product's registration is tied to a company you no longer work with, and that a five-year power of attorney is still in force. Protect yourself:
- Give the power of attorney for a defined purpose, and add a written right to revoke it if the agreement ends.
- Require the agent to cooperate with any transfer or change of applicant, and to sign the documents NAFDAC needs.
- Keep copies of every submission, certificate and correspondence in your own files.
- Where possible, hold the registration through your own Nigerian company (see NAFDAC registration for foreign manufacturers).
Pitfall 2: the agent registers your brand
The FCDO's Overseas Business Risk guide notes that UK intellectual property rights are not valid in Nigeria. Trademarks are registered through the Trademarks, Patents and Designs Registry, and enforcement can be a problem. If you have not registered your mark and your agent does, you may later have to buy back the right to use your own brand name. Register first, in your own company's name, and give the agent a limited permission to use the mark that ends with the agreement.
Pitfall 3: exclusivity without performance
A sole agency with no targets means one company can sit on the whole country while you cannot appoint anyone else. LawCare recommends pairing exclusivity with performance targets and termination rights, and warns that exclusive arrangements must comply with the Federal Competition and Consumer Protection Act. Set minimum orders or revenue for each quarter, and say what happens if they are missed: the agency becomes non-exclusive, the territory shrinks, or you may end the agreement on notice.
Pitfall 4: authority and commission
- Authority. State whether the agent may sign contracts for you or only find buyers for you to accept. An agent who can bind you can commit you to prices, delivery dates and warranties you never agreed.
- Commission. Define the base (invoiced or paid sales), the rate, when it is earned and when it is paid. Say whether commission is due on orders that arrive directly from the territory, and on repeat orders after the agreement ends.
- Money flow. Customers should pay you directly, into an account in your name. An agent who collects your sales money and sends on the balance holds your cash and your customer data.
- Conflicts. Require disclosure of competing products the agent represents.
Pitfall 5: assuming foreign agency law applies
Some founders in the UK assume the Commercial Agents Regulations 1993, which can give agents compensation or an indemnity at the end, will govern their Nigerian agent. Regulation 1(2) says the Regulations apply to the activities of commercial agents in Great Britain. The text does not deal with agents working only in Nigeria. LawCare's guide on Nigerian agency agreements cites no Nigerian statute that gives agents compensation on termination. Do not rely on either assumption. Write the end-of-agreement payments, if any, into the contract and choose the governing law on purpose. Ask a Nigerian lawyer, and one in your own country if your company is based there.
Contract checklist
- Parties: confirm the agent's CAC registration and directors (checking a company on the CAC register).
- Territory and whether you may still sell directly.
- Targets linked to exclusivity.
- Authority to bind, or not.
- Commission base, rate and timing.
- Control of NAFDAC, SON and trademark filings, and their transfer at the end.
- Confidentiality and return of customer lists and materials.
- Termination grounds, notice periods and post-termination commission.
- Governing law and dispute forum (LawCare notes many Nigerian contracts use mediation or arbitration).
This is general information, not legal advice.
Where Pryme fits
Keeping customer payments in your own name is one of the simplest protections. A Pryme Business Account can be opened from abroad with local NGN details, so Nigerian customers pay you directly and you pay the agent's commission yourself. Business accounts include a Finance agent that prepares commission statements for a person to approve.
Questions people ask
What is a sole agent?
An agent appointed as the only representative for your product in a territory. Depending on the contract, you may or may not keep the right to sell directly yourself.
Can my Nigerian agent register my product with NAFDAC?
NAFDAC's imported food and cosmetics guidelines require a power of attorney from the manufacturer and name a local agent. Control the terms and revocation of that power of attorney, and agree how the registration will be transferred.
Is a sole agent entitled to compensation when I end the agreement?
Check the contract and the governing law. The UK Commercial Agents Regulations apply to agents in Great Britain, and the Nigerian guide we reviewed cites no Nigerian statute that gives compensation. Get legal advice.
Should the agent collect payments from customers?
It is safer for customers to pay your company directly and for you to pay commission, so the agent never holds your sales money.
Sources
- Agency and Distribution Agreements in Nigeria: What You Need to Know (LawCare Nigeria, 21 Apr 2026) · accessed Oct 2026
- Guidelines for Registration of Imported Food Products in Nigeria (NAFDAC, effective 1 Mar 2021) · accessed Oct 2026
- Guidelines for Registration of Imported Cosmetics in Nigeria (NAFDAC, effective 13 Dec 2021) · accessed Oct 2026
- Overseas Business Risk: Nigeria (FCDO, 3 Jul 2023) · accessed Oct 2026
- The Commercial Agents (Council Directive) Regulations 1993, regulation 1 (legislation.gov.uk) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.