Nigeria is positioning itself as a potential leader in Africa’s growing artificial intelligence (AI) landscape, with projections showing investment in the sector could reach $400 million in 2025. While this signals rising interest and momentum, the path to AI-driven transformation still faces substantial hurdles in infrastructure, skills, and institutional capacity.
A Surge in Investment and Real-World Applications
A new report by PwC, Microsoft, and Lagos Business School reveals that AI adoption is accelerating across finance, agriculture, and e-commerce. Since 2022, Nigeria has attracted increasing investment in its AI ecosystem, with cumulative funding expected to hit $1.2 billion by the end of 2025. Of this, the federal government is contributing $50 million, with the remainder from about 15 venture capital firms.
Minister of Communications, Innovation and Digital Economy, Bosun Tijani, recently disclosed that the government had already invested between $6–7 million in 55 AI startups and plans further commitments. Tech giants and philanthropic organisations are also stepping in. The Bill & Melinda Gates Foundation recently pledged $7.5 million to establish an AI scaling hub focused on healthcare, education, and agriculture.
Economic Potential: AI’s Contribution to GDP
According to Microsoft, AI could add as much as $15 billion to Nigeria’s GDP by 2030. The country’s AI market is expected to grow over 27 percent annually from 2025, reflecting increasing integration into commercial and public services. In banking, 10 out of 26 Nigerian commercial banks have deployed conversational AI tools to improve customer service and fraud prevention. Startups like Bumpa and Kitovu are also applying AI to boost productivity in commerce and farming.
Despite this, AI adoption is still at a relatively low 25 percent nationally. However, there is a positive outlook on the workforce front: 70 percent of Nigerian professionals see generative AI as a productivity tool, while 88 percent believe it will foster new skills and creativity.
Gaps in Infrastructure and Talent Remain a Major Concern
While enthusiasm and investment are high, Nigeria’s AI ambitions face serious structural constraints. The country ranks 45 out of 100 on the AI Readiness Index, hindered by gaps in infrastructure and technical talent. A major bottleneck is access to high-performance computing resources such as GPUs, which are critical for training advanced AI models but remain prohibitively expensive for most local players.
The Nigerian Draft National AI Strategy released in 2024 highlights the challenges posed by unreliable internet, limited cloud services, and inadequate data centres. These are fundamental barriers that must be addressed to build a thriving AI ecosystem.
Skill Shortage and Brain Drain Slow Progress
In tandem with infrastructure challenges, Nigeria suffers from a shortage of AI professionals. Skills in machine learning, data engineering, and AI model optimisation are in short supply. Efforts like the Ministry of Communications’ 3MTT (Three Million Technical Talent) initiative and Microsoft’s AI Skill Navigator are helping build a local talent pipeline. However, funding shortages in higher education institutions hamper efforts to train and retain qualified AI professors.
According to GSMA, Nigerian universities face acute staffing challenges in AI departments due to financial constraints. This, coupled with brain drain, slows the country’s ability to grow a sustainable, skilled AI workforce.
Strategic Roadmap: Turning Obstacles Into Opportunities
Despite the hurdles, policymakers and industry stakeholders remain optimistic. The government’s strategy aims to turn these challenges into enablers for innovation. Stakeholders emphasise building localised, affordable infrastructure and fostering international partnerships to bridge funding and expertise gaps.
Olubayo Adekanmbi, founder of Data Science Nigeria, argues that AI can play a transformative role in solving the country’s most pressing problems—from public health to governance. Minister Tijani echoes this vision, emphasizing a commitment to policies and investments that will ensure AI becomes a key driver of inclusive and sustainable development.
“Through strategic investments, collaborative partnerships, and forward-thinking policies, we aim to unlock the vast potential of AI to drive sustainable development, boost economic competitiveness, and uplift every segment of Nigerian society,” Tijani stated.
Looking Ahead
As Nigeria continues its journey toward becoming a digital powerhouse, AI stands out as both a symbol of ambition and a test of readiness. While the country is making strides in investment and application, long-term success will depend on addressing foundational gaps in infrastructure and talent. If tackled effectively, AI could significantly enhance productivity, spur innovation, and position Nigeria as a leading voice in Africa’s digital future.