Nigeria’s recent rise in global AI readiness marks a significant moment in the country’s digital development, not because of the ranking alone, but because of what sits behind it. According to the 2025 Government AI Readiness Index produced by Oxford Insights, Nigeria has climbed from 103rd place in 2023 to 72nd, a leap of 31 places in just two years. Within Sub-Saharan Africa, this positions Nigeria fourth, behind Kenya, South Africa and Mauritius, and signals a shift from rhetoric about artificial intelligence to more concrete action.
This improvement did not happen overnight. Analysts and policymakers point to a combination of deliberate policy choices, ecosystem growth and increasing private-sector participation as the main drivers. Over the past few years, Nigeria has moved to formalise its approach to AI through a national strategy and supporting policy documents that outline both short- and long-term goals. These frameworks have helped align government agencies, researchers and technology companies around shared priorities, from skills development to responsible use of data.
One of the clearest areas of progress has been in policy capacity. Nigeria now ranks around 35th globally on this pillar of the index, reflecting stronger institutional ability to design, coordinate and oversee AI-related initiatives. This includes clearer guidance on governance, ethical considerations and the role of AI across different sectors of the economy. While challenges remain, particularly around enforcement and coordination across federal and state levels, the presence of a coherent policy framework has reduced uncertainty for organisations looking to invest in or deploy AI solutions.
Equally important has been progress in development and diffusion, where Nigeria has entered the global top 50. This improvement reflects a growing pool of local AI talent, increased research output and a more mature startup ecosystem. Universities and research institutes are producing more graduates with data science and machine learning skills, while innovation hubs and accelerators are supporting early-stage companies experimenting with AI-driven products. Government plans for national AI centres and high-performance computing infrastructure, though still at varying stages of implementation, signal an intent to lower the technical barriers that often prevent smaller firms from using advanced technologies.
While the index focuses on government readiness, Nigeria’s rise is closely tied to the energy of its private sector. In practice, much of the experimentation with AI is happening outside government, particularly among startups and SMEs operating in fintech, agriculture, healthtech, logistics and retail. These companies are building tools that reflect local realities: informal business structures, mobile-first users, local languages and domestic payment systems. Rather than importing AI products designed for other markets, Nigerian firms are adapting the technology to fit everyday economic activity. A growing number of practical, SME-focused tools have emerged from this approach, including InvoChat, an AI-powered invoicing solution built by AIforSME that allows SMEs to generate invoices and collect payments directly on WhatsApp. Products like this illustrate how AI is being embedded into familiar platforms already used by millions of Nigerians, helping to explain why the country’s AI readiness ranking has improved, not just in theory, but through visible, real-world adoption.
This bottom-up innovation is explicitly recognised in Nigeria’s national AI strategy, which emphasises the role of local startups and SMEs as drivers of adoption. Support mechanisms such as innovation hubs, research collaborations and talent programmes are intended to encourage this experimentation, creating a feedback loop between policy and practice. The result is an ecosystem where AI is increasingly seen not as an abstract concept, but as a practical tool for solving local problems.
For Nigerian SMEs, the implications of improved AI readiness could be substantial over the coming years. As shared infrastructure such as data centres, cloud platforms and computing hubs become more accessible, small firms may be able to deploy AI tools without bearing the full cost of building and maintaining their own systems. This could make it easier to use AI for functions such as customer support, demand forecasting, fraud detection and basic process automation, areas that directly affect productivity and profitability.
A clearer regulatory environment also matters. Greater certainty around data protection, cross-border data flows and algorithmic responsibility reduces risk for SMEs, particularly those operating in regulated sectors like finance, healthcare and education. Government-backed programmes linked to the AI strategy are already focusing on upskilling professionals and funding pilot projects in areas such as agriculture and healthcare, creating opportunities for smaller firms to participate in publicly supported initiatives.
Beyond efficiency gains, improved AI readiness could open up entirely new markets. Analysts estimate that AI could contribute tens of billions of dollars to Nigeria’s GDP by 2030, with agriculture, healthcare and fintech often cited as key beneficiaries. These are sectors where SMEs dominate, suggesting that much of the value creation could come from smaller, locally grounded businesses. For such firms, AI offers the potential to build new products, integrate into larger digital value chains and compete more effectively, both domestically and regionally.
None of this diminishes the challenges ahead. Nigeria still lags in areas such as advanced infrastructure deployment and public-sector adoption, and issues around electricity, connectivity and data quality remain real constraints. However, the recent improvement in AI readiness suggests a clearer direction of travel. If current efforts continue and gaps are addressed, experts argue that Nigeria could move into the global top 50 within a few years.
More importantly, this progress could create a more supportive environment for Nigerian SMEs to build, test and scale AI solutions designed for African markets. Rather than being passive consumers of imported technology, local businesses are increasingly positioned to shape how AI is used in ways that reflect Nigeria’s economic and social realities. In that sense, the country’s rise in AI readiness is less about rankings and more about laying the groundwork for a new generation of locally relevant digital tools.
