Investment in Artificial Intelligence (AI) in Nigeria is projected to reach $400 million by 2025, driven by increasing adoption in sectors such as finance, agriculture, and e-commerce. This was revealed in a new report by PwC, Microsoft, and Lagos Business School, which notes that although AI remains an emerging field, it has experienced growth in awareness, funding, and real-world application.
“As Nigeria seeks to establish itself as a global digital powerhouse, AI presents a transformative opportunity to enhance productivity, drive innovation, and harness inclusive economic growth,” said Bosun Tijani, minister of communications, innovation and digital economy.
By the end of 2025, cumulative investment in the Nigerian AI space since 2022 is expected to reach $1.2 billion (with $400 million invested in 2025 alone), with the government responsible for $50 million and the rest coming from about 15 venture capital firms.
Recently, Tijani disclosed that the federal government had invested in 55 AI startups in the past two years. “We have probably invested close to $6–7 million already,” Tijani said. “This will be followed by another significant investment.”
According to Microsoft, AI could contribute up to $15 billion to Nigeria’s GDP by 2030. The country’s AI market is forecast to grow by over 27 percent annually from 2025.
Beyond investments, Nigeria has attracted grants from global organisations, including Google, Microsoft, and the Bill Gates Foundation, which recently committed $7.5 million to create an AI scaling hub. Tijani said the Gates Foundation’s support will help accelerate AI use in healthcare, agriculture, and education.
Despite this growth, Nigeria exemplifies the broader trend of low investments in Africa’s AI ecosystem. Between 2022 and 2023, 103 AI-related VC deals totalling $641 million were completed across Africa, according to the African Private Capital Association (AVCA).
According to the World Economic Forum, this represents just 0.3 percent of the $184 billion in projected global AI investments for 2025. To address this gap, African countries plan to invest $60 billion through the Africa AI Fund, which aims to mobilise public, private, and philanthropic capital.
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As investment ramps up, AI applications are making inroads in sectors such as e-commerce, with Bumpa using AI as a personalised business coach to sellers. In agriculture, Kitovu is using AI and data-driven agronomic advisory to increase yield, provide personalised soil, and crop health analysis.
Despite this, AI adoption remains at 25 percent in the country. According to the report, startups are a major driving force of Nigeria’s AI ecosystem. As of February 2025, 10 of the country’s 26 commercial banks had adopted conversational AI to enhance customer service and streamline issue resolution. AI is also increasingly being used for fraud detection and prevention.
“AI mimics human intelligence using machine learning and big data. It plays a significant role in banking for fraud management, customer understanding, and efficiency improvement,” said Fatai Tella, chief operating officer, The Alternative Bank.
Beyond businesses, individual workers are also turning to AI tools to boost productivity. While the rise of AI initially sparked fears of job displacement, 70 percent of Nigerian workers surveyed see generative AI enhancing their productivity, while 88 percent expect it to foster new skills and creativity.
“AI enhances productivity and reduces costs by automating tasks under human supervision, particularly in virtual work settings,” stated Iyinoluwa Aboyeji, chief executive officer of Future Africa.
Despite its promise, AI adoption in Nigeria faces serious hurdles. The country ranked 45 out of 100 on the AI Readiness Index, with key deficits in infrastructure and skills.
“Nigeria is still at an early stage of AI adoption, working on infrastructure, connectivity, and skill-building while developing a National AI strategy,” said Olubunmi Ajala, national director of the National Centre for Artificial Intelligence and Robotics.
AI development requires heavy investment in computational hardware and data infrastructure. High-performance Graphics Processing Units (GPUs), essential for training advanced AI models, remain prohibitively expensive for many local organisations.
In the Nigerian Draft National AI Strategy released in 2024, stakeholders pointed out that the country’s digital infrastructure gap may threaten its aspiration to become a powerhouse in AI on the continent.
Drafters of the strategy document noted that the lack of reliable internet connectivity, robust data centres and accessible cloud computing services would be significant barriers.
“Nigeria aspires to be a global leader in AI, but achieving this vision requires a foundational infrastructure for AI and other emerging technologies,” the drafters wrote. “This pillar addresses building affordable and localised infrastructure foundations and the compute capacity to support the thriving AI ecosystem in Nigeria.”
Beyond infrastructure, the country has a glaring AI skill gap as it lacks enough skilled professionals who can navigate AI’s technical complexity. Developing and deploying AI systems requires expertise in machine learning, data engineering, and model optimisation, and these skills are in short supply. This is worsened by brain drain, as trained professionals emigrate in search of better opportunities.
Programs like the ministry of Communication’s 3MTT (Three Million Technical Talent), Microsoft’s AI Skill Navigator, and similar initiatives aim to bridge this gap, leveraging Nigeria’s large youth population. However, according to GSMA, the global body for telcos, Nigerian universities cannot hire enough AI professors due to funding constraints, limiting local talent development.
“In Kenya and Nigeria, the scarcity of professors with robust AI expertise and qualifications appears to be a significant challenge. Academic institutions typically lack the financial resources to recruit them, impacting the quality of courses offered,” GSMA noted.
Despite these challenges, industry leaders like Olubayo Adekanmbi, founder of Data Science Nigeria, believe AI can help solve some of the country’s most complex problems and enhance fields like healthcare, agriculture, and governance.
“Our government is committed to transforming these challenges into stepping stones for growth. 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,” added Tijani, minister of Communications.
