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Nigeria is embracing artificial intelligence (AI) at one of the fastest rates in Africa, but a new report warns that the country risks becoming a long-term consumer of foreign AI technologies unless it accelerates investment in indigenous innovation, computing infrastructure and local datasets.
The report, “Adoption of Artificial Intelligence in Nigeria: A Macro and Micro Economic Review,” argues that while AI usage is expanding rapidly across businesses and public institutions, the bulk of the economic gains continue to flow to global technology companies that own the underlying models, platforms and cloud infrastructure. The study was authored by Debola Ibiyode, Founder and Executive Director of the AI Empowerment Foundation and Founder and CEO of CarbonAI, and conducted by OLGNova in partnership with AI in Action Now.
AI Adoption Accelerates Across the Economy
According to the report, artificial intelligence is increasingly being deployed across multiple sectors of Nigeria’s economy, including financial services, healthcare, education, agriculture, telecommunications and public administration.
Businesses are leveraging AI to automate workflows, improve customer engagement, analyse large datasets and enhance operational efficiency. At the same time, individuals are increasingly adopting generative AI tools for learning, content creation and productivity.
While this rapid uptake reflects growing digital awareness, the report notes that most of the technologies powering these applications are developed and controlled by foreign companies.
Foreign Platforms Dominate the AI Ecosystem
The report warns that Nigeria remains heavily dependent on overseas AI providers for foundational technologies, including large language models, cloud computing services and AI infrastructure.
This dependence means local organisations often pay for access to foreign platforms instead of building domestic alternatives, limiting Nigeria’s ability to retain economic value generated by AI adoption.
Researchers caution that without deliberate efforts to build local AI capabilities, the country could become permanently reliant on imported technologies for critical digital services.
Need for Indigenous AI Development
To reverse the trend, the report recommends increased investment in homegrown AI models, local language datasets, research institutions and high-performance computing infrastructure.
It also calls for stronger collaboration between government, universities, technology startups and the private sector to develop AI systems tailored to Nigeria’s unique economic and social challenges.
According to the study, locally developed AI solutions would be better positioned to address issues such as financial inclusion, healthcare delivery, education, agriculture and public service efficiency while creating new economic opportunities within the country.
Infrastructure and Data Remain Critical Challenges
Beyond funding, the report identifies limited computing capacity, fragmented data systems and inadequate digital infrastructure as major obstacles to AI development in Nigeria.
Reliable electricity, affordable broadband connectivity, access to advanced computing resources and high-quality local datasets are all considered essential for building competitive AI products.
The report notes that strengthening these foundational elements will be critical if Nigeria hopes to compete with countries making significant investments in artificial intelligence.
Government Policy Must Move Beyond Adoption
While acknowledging ongoing government initiatives to promote AI, the report argues that policy efforts should extend beyond encouraging technology adoption.
Instead, policymakers are urged to create an enabling environment that supports AI research, startup financing, talent development and responsible regulation.
The report also recommends incentives that encourage local technology companies to develop indigenous AI products capable of competing in regional and global markets.
Opportunity to Build a Competitive AI Industry
Despite the challenges, the report maintains that Nigeria possesses significant advantages, including a large youthful population, a vibrant startup ecosystem and a growing pool of software developers.
If supported by the right investments and policies, these strengths could position the country as a leading AI innovation hub on the continent rather than merely a consumer of imported technologies.
The researchers argue that building local AI capacity would not only strengthen digital sovereignty but also create high-value jobs, attract investment and improve productivity across key sectors of the economy.
Capturing the Full Value of the AI Revolution
As artificial intelligence reshapes industries around the world, the report concludes that Nigeria’s long-term competitiveness will depend on its ability to move from adoption to innovation.
Without sustained investment in local talent, infrastructure and intellectual property, much of the wealth generated by AI will continue to accrue to foreign technology firms.
For Nigeria, the challenge is no longer whether AI will transform the economy—it is whether the country can build the capacity to own a meaningful share of that transformation and ensure the benefits are created and retained locally.
