Emma Okonji
Boston Consulting Group (BCG), a management consulting solution team, has revealed that Nigeria has the highest funding provided to AI companies among countries in sub-Saharan Africa, indicating strong investor confidence and potential for scaling Artificial Intelligence (AI) initiatives.
BCG, in a report, explained that with substantial funding and robust talent pool, Nigeria is poised for AI-driven economic transformation, adding that Nigeria has the second-highest number of AI specialists in sub-Saharan Africa, after South Africa, showcasing a robust and growing talent base.
According to the report, AI is already transforming industries and starting to reshape economies and is poised to shape the future of economic development over the next few years.
“The expansive scale of this growth makes AI an economic priority in every region around the globe,” the report said. However, the BCG research has established that most economies are underprepared for AI-driven disruption, as the study shows that over 70 per cent of the economies studied, scored below average in critical areas such as ecosystem participation, skills, and research and development.
BCG’s AI Maturity Matrix, a first of its kind study, offers a comprehensive overview of the AI landscape across 73 economies by focusing on two pivotal aspects. First, it assesses each economy’s vulnerability to AI-driven shifts, such as job displacement and industry wide productivity gains. Second, it evaluates the preparedness of each economy to navigate the risks associated with AI, while leveraging its potential to stimulate economic growth.
The report offered recommendations tailored to the diverse groups to guide policymakers and provided an interactive dashboard for a more detailed exploration of the analysis.
The first-of-its-kind study offers a broad view of global adoption, revealing that while most economies are gradually embracing AI, a small influential group of pioneers is emerging as global leaders. The handful of leading markets, according to the report, will stand to gain significant economic advantages and are uniquely positioned to shape how humanity will engage with this transformative technology.
The report listed six sectors that were most exposed to AI-driven changes to include: information and communication, high-tech goods, retail, financial services, public services, and motor vehicle manufacturing.
“Economies with a high share of sectors that are most exposed to AI are among the world’s most exposed to disruption. These include Luxembourg (with financial services making up almost 30 per cent of GDP), Hong Kong (22 per cent financial services and 22 per cent business services), and Singapore (18 per cent business services, 16 per cent retail, and 14 per cent financial services),” the report said.
Giving detailed report on its findings about the Nigerian market, the report said: “Nigeria’s GDP is composed of sectors with both high and limited exposure to AI. Those with high exposure – retail and wholesale and information and communication constitute a large share of the country’s GDP, which comprise of 18 per cent and 17 per cent respectively. Whilst the country’s largest sector, agriculture, forestry and fishery, which makes up 23 per cent of the economy, has limited AI exposure.
“This aligns with the wider report findings that show that economies with industry sectors that are less susceptible to AI disruption are less exposed. Such sectors include construction, agriculture, and furniture manufacturing. The countries include Indonesia (13 per cent agriculture and 11 per cent construction of GDP), India (17 per cent agriculture and eight per cent construction), and Ethiopia (36 per cent agriculture).”
The study measured readiness across the six dimensions that make up BCG’s ASPIRE index: Ambition, Skills, Policy and regulation, Investment, Research and innovation, and Ecosystem.
When measured against the index for AI readiness compared to the average of other sample economies in sub-Saharan Africa, Nigeria notably has the highest value for funding provided to AI companies (investment), the second highest number of AI specialists (skills) and the second highest value for the composite index for research papers published in AI (research and Innovation). South Africa leads in sub-Saharan Africa in both second place instances,” the report further said.
