90% of Nigerian businesses are tapping into AI to enhance productivity- study

In Nigeria, a rapidly developing economy in Africa, businesses are keenly tapping into the potential of cutting-edge technologies to drive their growth strategies. According to Equinix’s 2023 Global Tech Trends Survey, 47% of Nigerian businesses actively embrace interconnection and over 90% are banking on artificial intelligence (AI) benefits to expand their operations, enhance efficiency, and stay competitive in the digital era.

Nigeria, typically referred to as the economic engine of Africa, is home to a wide variety of businesses in the financial, telecommunications, agricultural, technological and numerous other sectors. The nation’s vibrant entrepreneurial spirit and sizable population provide a favourable environment for enterprises to thrive. However, managing the complexity of the contemporary digital environment necessitates creative solutions; this is where technology is useful.

Read Also: Nigeria’s active internet connections hit 159.5 million, but what is 5G’s status in the country?

The Rise of Interconnection in Nigerian Businesses

Interconnection, the direct and private exchange of data between businesses, has emerged as a game-changer for companies seeking seamless access to a global network of partners and customers. According to the Equinix survey, 47% of IT leaders in Nigeria who were interviewed, have recognized the potential of interconnection and have strategically integrated it into their operations.

The respondents also mentioned network optimization (46%) and improved end-user experience (45%) as additional advantages of interconnection. This is in line with the 2023 Global Interconnection Index’s prediction that through 2025, interconnection bandwidth will increase across EMEA and major metro areas at a CAGR of more than 40%.

It is also a crucial sign of the scale to which organizations are depending on connectivity to enable digital acceleration. While it is a growth process for many businesses, it is no surprise as interconnection offers numerous advantages, such as reduced latency, enhanced security, and improved performance.

For Nigerian businesses with international reach, this technology enables them to connect with partners and customers around the world efficiently. It fosters collaboration, accelerates digital transformation, and provides a competitive edge in an increasingly interconnected global economy.

Still on this, Funke Opeke, the CEO of MainOne- an Equinix company said:

“The growth of interconnection bandwidth and associated IT budgets for interconnection and carrier-neutral colocation shows how businesses are embracing interconnection as a critical component of their digital strategy, and how they are future-proofing their digital infrastructure to gain competitive advantage.”

The survey revealed a 35% increase in spending on carrier-neutral colocation compared to the prior year, which showed a 14% increase. This result is not surprising given projections from the previous year, which predicted an increase in digital deployments that will not only enhance digital transformation but also build resilience.

In the upcoming 12 months, more organizations (29%) want to raise their colocation spending. Respondents identified a number of top priorities for their long-term digital development plans, including driving innovation, enhancing customer experience, and adhering to data protection laws.

Data sovereignty rules are the primary determining factor for the plans of 37% of the 100 IT leaders polled in 2023 to geographically expand into a new region. 30% into a new country, and another 45% into a new city inside an existing country. 79% of these respondents indicated that they will probably change their expansion plans in some way to comply with the data sovereignty laws that have been put in place in these new countries.

According to Funke, “As businesses expand their infrastructure to meet the constantly growing need for digital services, data sovereignty laws play a critical part in their expansion plans. This is because businesses need to ensure that their data is stored and processed in accordance with the laws of the country in which they operate. However, strict data sovereignty laws can make it difficult for businesses to expand their infrastructure across borders.”

AI Revolutionizing Nigerian Business Landscape

IT leaders in Nigeria must embrace artificial intelligence (AI) if they want to ensure a sustainable future. Artificial intelligence (AI) has emerged as a transformative force that is reshaping conventional business models and redefining industry standards globally.

The survey’s findings showed that the adoption of AI is increasing across all industries, with 93% of the 2,900 IT decision-makers surveyed worldwide expressing a desire to take advantage of its benefits and either utilizing or planning to utilize it for several important tasks.

In Nigeria, 94% of companies are either utilizing AI in cybersecurity or plan to, closely followed by IT operations (93%), and customer experience (92%).

Only 3 in 10 (37%) of the IT leaders polled in Nigeria believe their team or current IT infrastructure is properly prepared for the needs of artificial intelligence technology, despite the fact that it has been widely adopted across industries.

Businesses must make sure their IT infrastructures can support the necessary intake, sharing, storage, and processing of enormous and heterogeneous data sets while keeping sustainability in mind in order to develop scalable AI solutions.
 
In addition, as regards digital infrastructure, the survey also highlighted the need for education and collaboration to enable IT teams to optimize the deployment of this infrastructure, with AI and machine learning expertise being sought by 52% of those growing their IT teams.

However, one of the key areas where AI is making significant strides in Nigeria is customer service. AI-powered chatbots and virtual assistants are increasingly being deployed by businesses to provide quick and efficient support to customers.

This improves customer satisfaction while also allowing businesses to streamline their processes and better allocate their resources. Additionally, decision-making processes in Nigerian businesses are being revolutionized by AI-driven analytics.

Businesses can learn a lot about market trends, client preferences, and operational efficiencies by utilizing big data and AI algorithms. With this information, Nigerian businesses are more equipped to make data-driven decisions, spot untapped potential, and react quickly to shifting consumer expectations.

Challenges and Opportunities

While the adoption of connectivity and AI in Nigeria offers businesses tremendous potential, it is not without difficulties. A key issue is the requirement for a strong digital infrastructure. For smooth integration and AI-powered apps, dependable data centres and internet access are necessary.

As a result, both the public and private sectors need to place high importance on investing in digital infrastructure. Also, the development, management, and optimization of AI systems call for the expertise of qualified people.

Therefore, it is essential for maintaining Nigeria’s tech-driven prosperity to foster a competent pool of AI specialists through educational initiatives and training programs.

As Nigeria continues to assert its position as a major player in the global economy, leveraging technological advancements becomes indispensable for businesses seeking to thrive in the digital era.

By embracing these technologies, businesses in Nigeria can unlock new horizons of growth, enhance operational efficiency, and make informed, data-driven decisions to stay ahead in a fiercely competitive market.