By Ivy Samuel
Artificial Intelligence (AI) is no longer a technology reserved for multinational corporations but has become a strategic tool that can help Nigerian small and medium-sized enterprises (SMEs) improve productivity, reduce operating costs, and remain competitive, according to a new study by Dr. Ayodeji Idowu Phd.
The study, published in the International Journal of Comparative Studies in International Relations and Development, argues that advances in cloud computing, affordable digital platforms, and application programming interfaces (APIs) have made AI accessible to businesses of all sizes. The researcher noted that SMEs no longer require huge investments or specialized data science teams to deploy AI-powered solutions for customer service, marketing, finance, and operations.
According to the researcher, AI is already transforming business processes through automated customer support, predictive marketing analytics, intelligent inventory management, and AI-driven accounting systems that reduce manual errors and improve decision-making, adding that logistics firms can also leverage AI to optimize delivery routes, reduce fuel costs, and improve operational efficiency.
The study cited global examples of businesses benefiting from AI adoption, including TKG, a German family-owned manufacturing company that reduced order-processing time by more than 50 percent after integrating AI into its operations and recovered its investment in less than three years. It also noted that retailers using AI-powered predictive analytics recorded sales increases of about 25 percent within a single quarter.
Despite the opportunities, the research by Dr. Ayodeji identified several barriers slowing AI adoption among Nigerian SMEs, including misconceptions about high implementation costs, inadequate digital skills, poor electricity supply, unreliable internet connectivity, and resistance to replacing traditional manual processes. The study found that about 65 percent of SMEs consider limited technical expertise their biggest obstacle to adopting digital technologies.
To address these challenges, Dr. Ayodeji recommended a phased six-step implementation strategy, advising business owners to first understand AI’s value, begin with affordable off-the-shelf tools, prioritize high-impact business functions, automate repetitive administrative tasks, invest in employee digital literacy, and gradually adopt customized AI solutions as their digital capabilities improve.
The researcher also called for greater collaboration between government, technology firms, educational institutions, and business owners to accelerate AI adoption across Nigeria’s SME sector. He urged policymakers to provide grants, tax incentives, and low-interest technology loans, while encouraging SMEs to build quality digital records that will support future AI applications.
According to the study, businesses that embrace AI strategically will be better positioned to improve efficiency, strengthen customer relationships, and compete successfully in an increasingly digital economy.