Adoption of Artificial intelligence and Macroeconomic Performance indicators in Nigeria: A Quantitative Analysis

This study investigates the effect of Artificial Intelligence (AI) adoption on Nigeria's economic growth from 1990 to 2022, with a specific focus on its transmission through the agricultural and manufacturing sectors, and infrastructural development. Despite the global discourse on AI's transformative potential, a critical gap exists in empirically quantifying its macroeconomic impact and specific transmission channels within the Nigerian context. Grounded in an augmented endogenous growth theory framework, this study employs an Autoregressive Distributed Lag (ARDL) approach to cointegration and an Error Correction Model (ECM) to analyze time-series data sourced from the World Bank and the Nigerian Bureau of Statistics. The findings confirm a stable, long-run relationship between AI adoption and economic growth in Nigeria. The results reveal that a 1% increase in AI adoption, proxied by ICT imports, is associated with a significant 0.65% increase in long-run economic growth. The analysis of sectoral channels indicates that while agricultural output has a positive effect (0.28%), manufacturing output has a stronger effect (0.51%) on growth. Crucially, a composite infrastructure index (encompassing education, energy, and health) emerged as the most powerful driver, with a one-unit increase in the index associated with a 0.89% increase in GDP. The ECM confirms a robust short-run adjustment mechanism, with 42% of any disequilibrium corrected annually.