A recent projection by financial expert Mr. Olatunde Amolegbe, Managing Director/CEO of Arthur Stevens Asset Management Limited, paints a transformative picture for Nigeria’s economic future. He forecasts that the nation’s digital economy revenue will surge to **$18.30 billion by 2026**. To appreciate this trajectory, consider the growth: from $5.09 billion in 2019 to $9.97 billion in 2021, and now on a path to nearly double again within five years. This growth is not occurring in a vacuum; it aligns with a global shift where the digital economy is projected to constitute 25% of worldwide GDP by 2026.
This momentum is central to continental initiatives like the Digital Economy for Africa (DE4A), which aims for full digital enablement by 2030 through principles of inclusivity and homegrown innovation. Nigeria is already a standout performer in this African context. It leads the continent in startup investment and is home to five unicorn companies—Interswitch, Flutterwave, OPay, Andela, and Moniepoint—a clear testament to robust private-sector dynamism. This foundation is supported by over 107 million internet users, with mobile devices accounting for over 90% of connections, creating a truly mobile-first digital nation.
The engine of this digital economy is already humming. The telecommunications sector alone contributed a significant 9.20% to real GDP in Q2 2025. Meanwhile, fintech and digital payments are expanding rapidly, driven by the ubiquitous NIP (NIBSS Instant Payment) network, progressive regulations, and widespread consumer adoption.
Looking ahead, the next phase of growth is inextricably linked to **Artificial Intelligence (AI) and disruptive technologies**. As Amolegbe highlighted in his lecture on *AI & Digital Economy: Projecting the Future of Economic Growth in Nigeria*, these tools are reshaping the socio-economic landscape. The potential is particularly high in traditionally underserved sectors like agriculture, healthcare, education, and infrastructure. For instance, AI can optimize crop yields through predictive analytics, enable remote diagnostics in healthcare, personalize digital learning, and facilitate smarter urban planning. Nigeria has shown early ambition in this space, notably with the 2021 launch of the eNaira, a central bank digital currency (CBDC).
The path to an AI-driven future is supported by key enablers:
* **Demographics:** A population exceeding 220 million, with over half projected to have smartphone penetration by 2025, provides a vast market and talent pool. Diaspora remittances further fuel tech investment.
* **Policy:** Frameworks like the National Information Technology Development Agency’s (NITDA) AI Strategy are crucial. Initiatives such as the NITDA-Google AI Fund, which provides funding and support to local startups, demonstrate a link between local innovation and global tech ecosystems.
* **Infrastructure:** Nigeria’s connectivity backbone is strong, with eight submarine cables landing at its shores, providing over 40 Terabits per second (Tbps) of international bandwidth.
However, **significant gaps threaten to constrain this potential growth**. Amolegbe issued a clear warning that unlocking full value requires addressing critical challenges:
1. **The Persistent Infrastructure Deficit:** As of August 2025, national broadband penetration sits at approximately 48.81%, missing the 70% target of the National Broadband Plan. The rural-urban divide is stark: while over 45% of Nigerians live in rural areas, only about 23% have internet access, creating widespread digital exclusion.
2. **Regulatory and Policy Bottlenecks:** Inconsistent policy implementation raises costs. Despite a 2020 agreement to cap Right-of-Way (RoW) fees for telecom infrastructure at ₦145 per meter, some states, like Ogun, charge as much as ₦9,477. This contributed to record-high operating costs of ₦5.85 trillion for telecom firms in 2024, directly slowing infrastructure rollout and, by extension, AI adoption.
3. **Low Automation Adoption in Core Sectors:** The integration of AI and automation into the real economy remains low. In manufacturing, only about 18% of firms have fully implemented such tools, with 43% having none. In agriculture, a sector critical for employment and food security, less than 1% of farming households own tractors, and only 6% of arable land is irrigated, indicating a profound mechanization gap.
In conclusion, Nigeria stands at a pivotal juncture. The foundations for a digital leap—youthful demographics, a vibrant startup scene, and improving connectivity—are firmly in place. The projected rise to an $18.3 billion digital economy is achievable, but not automatic. It hinges on a coordinated national strategy that aggressively bridges the infrastructure divide, harmonizes regulations to incentivize investment, and actively fosters AI talent and adoption in key economic sectors. By doing so, Nigeria can transform this digital potential into broad-based productivity gains, job creation, and solidified continental leadership in the AI-powered era.