Nigeria well positioned to harness AI for economic growth – IMF

Nigeria has been named one of the top five countries in Sub-Saharan Africa with the highest potential to benefit from artificial intelligence (AI), according to a new report by the International Monetary Fund (IMF).

In its report titled “Unlocking the Potential: AI in Sub-Saharan Africa,” the IMF ranked Nigeria alongside South Africa, Mauritius, Botswana and Namibia as the countries most likely to gain the biggest productivity improvements from AI.

The IMF said Nigeria’s strong position is due to the large number of people working in sectors such as finance, information and communication technology (ICT), and professional services. These sectors are expected to benefit more from AI than jobs that rely mainly on manual labour.

The report noted that AI has the potential to improve productivity, transform labour markets and support economic growth across the world. However, it warned that many African countries still face challenges that could slow down AI adoption.

According to the IMF, the main issue for Sub-Saharan Africa is not the threat of AI replacing jobs, but whether countries can adopt and use the technology quickly enough to enjoy its benefits and avoid falling behind other regions.

The Fund said countries that invest in digital infrastructure, reliable electricity, technical skills and good governance can achieve significant economic gains from AI.

It estimated that AI adoption could increase productivity across Sub-Saharan Africa by between 0.2 per cent and 2.1 per cent over the next decade. This could add almost half a percentage point to annual economic growth during the same period.

The IMF added that Nigeria’s labour market is more similar to those of emerging economies than many other countries in the region, making it better prepared to take advantage of AI-driven opportunities.

Despite the positive outlook, the report stressed that weak infrastructure, limited access to technology and low adoption rates remain major obstacles across the region.

The IMF explained that its projections are based on current conditions and do not fully capture the possible benefits that could come from wider AI adoption, innovation and structural economic changes in the future.

It also warned that failure to address existing challenges could widen the gap between African countries and more advanced economies.

However, the Fund pointed to encouraging developments, noting that AI is already being used in sectors such as agriculture, financial technology, healthcare, education and public services across Africa.

The report concluded that AI presents an important opportunity for countries in Sub-Saharan Africa to boost economic growth and improve living standards, provided they can adopt and scale the technology quickly and inclusively.