Nigeria’s artificial intelligence ecosystem has expanded to more than 120 active startups operating across healthtech, fintech, agritech and language technology, according to the Artificial Intelligence AI Outlook 2026: Shifts, Trends & Prediction report, which examined the major developments that shaped the country’s AI landscape in 2025.
The AI Outlook 2026 report, produced by AI CoLab Africa and AI in Nigeria in collaboration with African industry experts, highlights rapid innovation growth while warning that funding shortages, infrastructure deficits and fragmented adoption across sectors could slow national progress. The study surveyed 504 professionals and included interviews with dozens of ecosystem leaders, presenting Nigeria as a nation experiencing technological advancement alongside persistent structural challenges.
Government efforts to coordinate development were reflected in the launch of the Nigeria National AI Strategy in August 2024 and the establishment of the Nigeria National AI Trust in February 2025, both designed to guide responsible growth and institutional collaboration within the sector.
The Director General of the National Information Technology Development Agency, Kashifu Inuwa Abdullahi, described regulation as a framework intended to support innovation rather than restrict it. “Regulating AI is not about slowing down technological advancement; it is about governing it responsibly. It is about ensuring that the benefits of AI do not come at the cost of human rights, democratic values, or social cohesion,” he said.
He outlined NITDA’s Regulatory Intelligence Framework and the draft National Guideline for the Ethical Adoption and Use of AI, noting seven core requirements focused on human agency, transparency and accountability.
Indigenous innovation continues to expand steadily, with the report identifying 122 operational AI startups as of 2025. Most are concentrated in Lagos, while emerging innovation clusters are developing in Abuja and other states. Among notable initiatives, Awarri is building Nigeria’s first indigenous multilingual large language model supporting five major Nigerian languages, while CDIAL AI focuses on natural language processing for low-resource African languages.
In the health technology sector, Ubenwa Health deploys artificial intelligence to analyse infant cries for early diagnosis of neurological conditions, while BetaLife Health applies AI to optimise blood donation supply chains, attracting international funding and recognition. In autonomous systems development, Abuja-based Terra Industries, founded by engineers Maxwell Maduka and Nathan Nwachukwu, produces AI-powered drones with annual production capacity of 30,000 units, exporting to eight African countries while maintaining an entirely African software ecosystem.
Despite these achievements, the report reveals a fragile financial foundation underpinning the ecosystem. Survey findings show that 79 per cent of respondents identified limited access to capital as a major challenge, with 40 per cent of startups relying on personal savings to operate. Only 20 per cent have secured international funding, 16 per cent have accessed venture capital and just six per cent have benefited from government grants.
The report stated that the funding gap demonstrates the vulnerability of Nigeria’s AI innovation economy. “Without strong local investment networks or government support, many founders are forced to grow their companies with limited resources, often putting long-term survival at risk.”
Adoption of artificial intelligence remains uneven across industries. Financial services and technology currently lead implementation efforts, with fintech companies and digital banks deploying AI solutions for credit scoring, fraud detection and automated customer services. Growth Executive at Sterling Bank, Obinna Ukachukwu, said, “Gone are the days when banking meant long queues, stacks of paperwork, and one-size-fits-all services. Today, AI is moving financial services from a place of privilege to something more personal and accessible.”
Dr Stanley Jacob noted that electronic payment transactions reached N1.07 quadrillion in 2024, approximately three times the 2022 figure, partly driven by AI integration. He emphasised the need for collaborative strategies and shared services to enable smaller organisations to adopt artificial intelligence tools effectively.
However, sectors such as manufacturing, agriculture and healthcare remain at early adoption stages due to limited funding, weak infrastructure and inadequate access to quality data. Agriculture specialist Prof Gabriel Dedeke of the Federal University of Agriculture, Abeokuta, referenced pilot projects such as the Ogun SmartFarm Initiative, which “integrated drone-based crop surveillance, IoT soil sensors, and AI-based yield forecasting, scaling up yield by 35% while input costs dropped by 20% within a season.” He cautioned that a wide digital divide in rural communities and low data literacy among smallholder farmers continue to limit broader adoption.
Human capital development emerged as a central theme of the report. Prof Olayinka David-West stressed that sustained investment in AI education and training is essential to achieving Nigeria’s ambition of building a $1 trillion economy by 2030, advocating the integration of AI literacy from primary through tertiary education levels.
Global HR leader and executive coach Lara Yeku provided five strategic recommendations for developing an AI-ready workforce, stating, “The real promise of AI does not lie in the tools themselves, but in the people empowered to use them effectively will not replace people, but people who embrace AI will certainly outperform those who do not.”
The report also highlighted the importance of grassroots communities in driving innovation. Volunteer Lead at AI in Nigeria, Florence Nwadinso, said, “Transformation is happening in WhatsApp groups, in late-night Google Meet calls, in university classrooms without projectors, and in coworking spaces,” she said. She warned that many of these communities operate with minimal resources, relying on volunteers, inconsistent internet connectivity, low-end laptops and sustained personal commitment.
She recommended the creation of a national fund to support grassroots AI and technology learning hubs, particularly in underserved regions. Ashley Immanuel raised concerns about financial inclusion risks associated with expanding AI deployment, warning, “If we are not careful, the proliferation of AI-driven solutions may expose customers to data protection risks and consumer data misuse. Achieving the full potential of AI for financial inclusion in Nigeria will not be automatic; we must be deliberate,” she said.
Experts contributing to the report outlined seven strategic priorities for advancing Nigeria’s AI ecosystem, including establishing a unified national AI framework, prioritising artificial intelligence within education reform, investing in funding and infrastructure, and strengthening regulatory capacity.
Co-founder of AI in Nigeria, Ehia Erhaboh, summarised the country’s progress and future direction, stating, “Progress has been made, but the journey has just begun. As AI progresses from innovation to scale and governance, ecosystem stakeholders need to further domesticate the National AI Strategy, expand public digital infrastructure, adopt AI use in public service, focus on inclusion, and promote indigenous knowledge of AI systems.”
