Key points
- Zoho says poor infrastructure and low digital literacy are slowing AI adoption among Nigerian SMEs
- Study of 144 SMEs identifies power supply, broadband access and skills gaps as key barriers
- MSMEs contributed 46.32% of Nigeria’s GDP in 2024 and account for most businesses and jobs
- Mobile-first, low-bandwidth AI solutions seen as critical for wider adoption
- Stakeholders urged to prioritise affordable and practical AI tools tailored to local realities
Main story
The adoption of artificial intelligence among Nigerian small and medium-sized enterprises (SMEs) remains limited by infrastructure deficits, digital skills shortages and the high cost of technology deployment, according to Zoho Nigeria.
Country Head of Zoho Nigeria, Kehinde Ogundare, said findings from a study involving 144 SMEs showed that while awareness of AI is growing, many businesses are unable to move from interest to implementation because of operational challenges. These include unreliable electricity supply, poor internet connectivity, high data costs and limited access to affordable technology solutions. Ogundare noted that the realities facing Nigerian businesses differ significantly from those in developed markets, where AI conversations are increasingly focused on innovation, automation and competitive advantage. In contrast, many local businesses remain preoccupied with managing rising operating costs and maintaining business continuity.
He said the challenge is particularly important given the economic significance of Nigeria’s MSME sector, which contributed 46.32 per cent of the country’s Gross Domestic Product in 2024, while accounting for 96.9 per cent of businesses and 87.9 per cent of employment. According to him, subscription-based software models are helping to lower barriers to adoption by reducing upfront investment requirements. He added that integrated digital platforms that combine business functions such as invoicing, customer relationship management and inventory tracking can help SMEs improve efficiency while keeping costs under control.
Ogundare stressed that future AI solutions for Nigerian businesses must be designed around local realities, particularly the widespread use of mobile devices and inconsistent internet connectivity. He also highlighted the need for workforce development, noting that increasing AI usage across Africa underscores the importance of equipping workers with relevant digital skills.
The issues
- Limited electricity supply and internet connectivity
- High costs of AI deployment and technology adoption
- Low levels of digital literacy among SME operators
- Shortage of AI and digital skills within the workforce
- Need for locally relevant and affordable AI solutions
- Balancing technological innovation with business survival
What’s being said
“Micro, Small and Medium Enterprises contributed 46.32 per cent to Nigeria’s Gross Domestic Product in 2024, accounting for 96.9 per cent of businesses and 87.9 per cent of employment. These businesses are the backbone of the economy,” Ogundare said.
“Any technology adopted by SMEs must deliver measurable productivity gains and support profitability in an environment where margins are already under pressure,” he said while discussing technology investments.
“The tools that will succeed are those that consume less data, work on mobile devices and can function offline before synchronising when connectivity returns,” he said on the type of AI solutions most suitable for Nigeria.
“Low cost, low bandwidth requirements and ease of use for non-technical users are not optional features; they are essential requirements for AI adoption in Nigeria’s SME sector,” Ogundare added.
What’s next
- SMEs are expected to increase exploration of AI tools as awareness grows
- Technology providers may focus more on mobile-first and low-bandwidth solutions
- Businesses will likely invest more in workforce digital skills development
- Policymakers and industry stakeholders may intensify efforts to improve digital infrastructure
- Subscription-based AI platforms could gain wider acceptance among SMEs
Bottom line
While interest in artificial intelligence is rising among Nigerian SMEs, widespread adoption will depend on addressing persistent infrastructure challenges, improving digital skills and providing affordable AI solutions that align with the realities of doing business in Nigeria.
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