Artificial Intelligence (AI) as a Catalyst for Business and Social Development in Nigeria

Abstract

This study examined the impact of Artificial Intelligence (AI) on business and social development in Nigeria, focusing on the relationships among AI technology adoption, AI infrastructure availability, fintech, employment opportunities, poverty reduction, and business productivity in the short and long run. The study was motivated by the growing role of AI and digital technologies in transforming business operations, financial services, employment, and social welfare, alongside Nigeria’s challenges in translating technological advancement into inclusive and sustainable development. An Autoregressive Distributed Lag (ARDL) econometric approach was employed using time-series data from the Central Bank of Nigeria (CBN) Statistical Bulletin and World Development Indicators (WDI) covering 2000–2024. The analysis examined both short-run and long-run relationships among Financial Technology (FINTECH), AI Technology Adoption (AITECH), AI Infrastructure Availability (INFRAST), Employment Opportunities (EMP), Poverty Reduction (POV), and Business Productivity (BPROD). The findings indicate that fintech, employment opportunities, and business productivity have positive and statistically significant relationships in both the short and long run, suggesting that improvements in digital financial services and employment contribute to business productivity and broader economic development. AI technology adoption has a negative and statistically insignificant relationship with business productivity in the current period but becomes positive and statistically significant after a one-period lag in the short run, indicating that businesses may require time to integrate AI effectively. However, poverty reduction, AI technology adoption, and AI infrastructure availability show negative and statistically significant relationships with business productivity in both periods, suggesting that technological and social-development improvements do not automatically generate productivity gains where complementary infrastructure, skills, finance, and institutional capacity are inadequate. The study concludes that AI has considerable potential to support business productivity and social development in Nigeria, provided complementary factors are strengthened. It recommends investment in digital and physical infrastructure, AI and digital skills, fintech innovation, productive employment, SME support, financial inclusion, and effective AI governance, alongside integrating poverty-reduction programs with employment, entrepreneurship, and digital-skills initiatives.