By Kehinde Ogundare, Country Head, Zoho Nigeria
Ask a tech entrepreneur in San Francisco what AI means for their
business, and they are likely to talk about competitive advantage,
product differentiation, and scale. Ask a small business owner in Kano
or Onitsha the same question, and the conversation shifts entirely.
For many Nigerian SMEs, the priority is keeping the lights on, managing
costs, and finding sustainable ways to grow in a challenging economic
environment. This difference in perspective explains why the global AI
conversation, often shaped by assumptions about stable infrastructure,
deep capital, and abundant technical talent, frequently fails to address
the realities facing Nigerian SMEs.
This matters because Nigerian SMEs are not a peripheral concern. In 2024
alone, MSMEs contributed 46.32% [1] to Nigeria’s GDP, accounting for
96.9% of businesses and 87.9% of employment. These businesses are the
backbone of the Nigerian economy, and if AI is going to mean anything
for Nigeria’s development, it has to work for them in the daily
conditions they actually operate in.
However, research [2] drawing on empirical data from 144 Nigerian SMEs
found that inadequate infrastructure, low digital literacy, skills
shortages, and regulatory gaps are collectively preventing them from
meaningfully engaging with AI. Awareness of AI is high and growing. What
is missing is a clear and honest conversation about what adoption
actually requires in this specific context. The barriers are real, but
none of them are insurmountable. The question is whether the tools,
pricing models, and support structures being offered to Nigerian SMEs
are designed with those barriers in mind, or whether they have been
built for another market entirely.
Subscription models making AI affordable for small businesses
When most small business owners hear “AI,” they imagine expensive
software, specialist consultants, and a hefty upfront bill.
That assumption is not entirely wrong, but it describes a particular way
of buying technology, not AI itself. The shift that makes AI genuinely
accessible at the SME level is the move away from large, one-time
capital purchases towards tools that charge a predictable monthly
subscription. Businesses can pay for what they use, scale back when
necessary, and avoid the debt that a major technology investment can
create.
The deeper opportunity here is consolidation. Many SMEs are already
spending money across multiple disconnected tools—one for invoicing,
another for customer records, another for stock tracking—none of which
talk to each other. An integrated platform that handles several of these
functions together, with AI built in, can actually cost less than the
sum of those separate subscriptions while giving business owners a
clearer picture of their operations.
With margins already under pressure, any technology a business adopts
needs to, visibly, show increase in productivity or bottom line.
Subscription-based, integrated platforms, priced transparently and
honestly, are the model that best fits this reality.
Infrastructure challenges demand a mobile-first approach
No conversation about technology in Nigeria is complete without
confronting the infrastructure problem, and AI is no exception. Nigeria
continues to face major infrastructure barriers [3], including limited
broadband access, unreliable power supply, and high data costs, all of
which constrain deeper AI adoption. These are structural features of the
operating environment that any sensible technology strategy must account
for today.
The electricity situation alone is significant. The World Bank estimates
that the lack of stable electricity costs Nigeria’s economy
approximately $26.2 billion [4] annually, equivalent to about 2% of GDP,
forcing many businesses to run on expensive diesel generators. That cost
ripples outward.
In practical terms, AI tools built for Nigeria cannot assume a stable
broadband connection or a computer that is always powered on. The tools
that will actually get used are the ones that work on a smartphone,
consume minimal data, and can function offline when connectivity drops,
syncing back up when it returns. The mobile phone is already how many
Nigerian SME owners run their businesses. AI that meets them there,
rather than demanding infrastructure they do not have, is AI that has a
genuine future in this market.
The direction is clear: build capability from within, using tools that
make that possible. Recent AI performance research reveals that 64% of
African workers [5] are already actively using AI at work, signaling
massive grassroots readiness and driving forward-thinking organizations
across Nigeria, Kenya, and South Africa to aggressively prioritize
internal upskilling frameworks to bridge the talent gap.
As the policy groundwork is being laid, the commercial ecosystem is
beginning to respond. What remains is a clear-eyed acceptance that AI
tools built for this market need to look different from those built for
markets with different realities. Low cost, low bandwidth, and usability
for non-technical people are not modest ambitions; they are the actual
requirements. Build for those realities, and AI has a real future in
Nigeria’s SME economy.
