Images, video and an Instagram live feed from a popular DJ spread news of shootings in Lagos on Oct. 20, when witnesses and rights groups said the military fired on peaceful protesters.
The protesters had been demonstrating for nearly two weeks to demand an end to police brutality. The army denied its soldiers were there.
Social media helped spread word of the shootings worldwide, and international celebrities from Beyonce and Lewis Hamilton to Pope Francis since called on the country to resolve the conflict peacefully.
Information Minister Lai Mohammed told a panel at the National Assembly on Tuesday that "fake news" is one of the biggest challenges facing Nigeria.
A spokesman for the minister confirmed the comments, and said "the use of the social media to spread fake news and disinformation means there is the need to do something about it."
Officials have said some videos and photos posted during the protests were fake news but have not said that about the shootings.
In the weeks before the shootings, protesters had also used social media to organise, raise money and share what they said was proof of police harassment, which increased pressure on authorities to respond to their demands.
Twitter Inc CEO Jack Dorsey Tweeted to encouraged his followers to contribute, and the hashtag #EndSARS was trending for several days, referencing the widely feared Special Anti-Robbery Squad that they successfully demanded be abolished.
(Reporting by Felix Onuah in Abuja and Libby George in Lagos; Editing by Giles Elgood)