Nigeria is adopting AI fast, but foreign firms are winning, Report warns

Nigeria is at risk of becoming permanently dependent on foreign artificial intelligence (AI) technologies unless it significantly increases investment in developing indigenous AI models, datasets and computing infrastructure, according to a new report.

The report, Adoption of Artificial Intelligence in Nigeria: A Macro and Micro Economic Review, warned that while AI adoption is accelerating across the country, Nigeria remains largely a consumer of technologies developed abroad, exposing critical sectors to external control and limiting the country’s ability to capture the full economic value of the AI revolution.

Authored by Debola Ibiyode, Founder and Executive Director of the AI Empowerment Foundation and Founder and CEO of CarbonAI, the review was conducted by OLGNova alongside AI in Action Now.

According to the report, Nigerians are increasingly relying on foreign-built AI models, cloud infrastructure and software platforms, while contributing relatively little to the development of foundational AI models, indigenous datasets or domestic computing infrastructure.

The report warned that this imbalance allows valuable Nigerian data to strengthen foreign-owned technologies while exposing local institutions to risks arising from changing licensing policies, service disruptions and external control of critical digital infrastructure.

It noted that although Nigeria has emerged as one of Africa’s fastest adopters of AI, the country has yet to build the institutional, technological and human capacity needed to sustain long term AI development.

The review found that more than 70% of Nigerians have interacted with generative AI tools, while 93% of surveyed organisations have begun adopting AI technologies.

According to the report, AI is already delivering measurable benefits across key sectors of the economy.

In agriculture, AI advisory platforms are increasing crop yields by between 20% and 30% while reducing production costs. Predictive maintenance and route optimisation are also helping manufacturers and retailers reduce food waste and transportation delays.

Despite the rapid uptake of AI applications, the report argued that Nigeria’s biggest challenge is the widening gap between AI consumption and AI creation.

It noted that the country’s dependence on foreign AI technologies could weaken its digital sovereignty as local institutions remain reliant on overseas providers for core AI infrastructure and services.

The review also warned that most leading AI models are trained predominantly on English language datasets, limiting their ability to accurately interpret indigenous Nigerian languages such as Hausa, Yoruba and Igbo.

According to the report, this could reduce the relevance and effectiveness of AI solutions deployed within Nigeria unless greater investment is made in developing local language datasets.

Just last month, Nigeria was ranked highest in Africa in the second edition of the Global Index on Responsible AI (GIRAI), ranking 38th globally with an overall score of 45.93.

The report also identifies Nigeria as a global “Bright Spot” for its approach to preparing citizens for the AI era while simultaneously protecting them from the technology’s potential harms.

While the report confirms the rapid adoption of AI in the country, the ranking recognized the efforts the government is putting in place in driving AI governance, rather than the country’s local capacity in AI.