AI Investment Spike Reshapes World Economy: Will Nigeria Catch Up or Fall Behind?
A rapid surge in artificial intelligence (AI) spending is making it harder for economists and central banks to read the true state of the world economy, raising concerns about policy missteps and potential spillovers for emerging markets such as Nigeria.
Global data shows that investment in AI, cloud technology and software has grown at an unusually fast pace this year, even as other sectors of the economy slow down. Economists say this imbalance is creating a “two-track economy” where technology-driven firms post strong profits while consumers and traditional industries struggle.
The trend is complicating monetary policy. Central banks, particularly the U.S. Federal Reserve, typically rely on traditional economic indicators to assess growth, inflation and employment. However, analysts warn that the current wave of AI and intangible-tech investment is distorting those measurements, making it harder to determine whether to raise or cut interest rates.
While AI investments appear to boost economic output on paper, experts say the true impact may be overstated in the short term and understated in the long term, because current measurement tools cannot accurately capture digital productivity. This raises the risk of central banks acting too early or too late — potentially triggering market volatility.
Implications for Nigeria
Economic analysts caution that the global shift toward AI-heavy growth could have mixed consequences for Nigeria.
A stronger pull of investment towards advanced economies could reduce foreign inflows to emerging markets, especially in traditional sectors such as commodities. This may affect Nigeria’s ability to attract foreign direct investment, particularly at a time when the country is seeking to stabilize the naira and boost job creation.
A tightening of monetary policy in the U.S. should inflation rise due to tech-driven growth could also strengthen the dollar and exert further pressure on Nigeria’s currency and import costs.
However, the trend also presents an opportunity. With the global economy increasingly powered by digital industries, Nigeria could benefit by expanding its tech ecosystem, improving digital infrastructure and promoting AI-focused skills training. Analysts say countries that adapt quickly to the shift stand a better chance of integrating into the future global economy.
Industry experts advise the Nigerian government to update economic measurement tools and policies to recognize digital productivity, support tech start-ups, and invest in internet and power infrastructure to avoid being left behind in the global AI race.