Title: Artificial Intelligence Adoption and Organizational Performance in Nigerian SMEs: Between Digital Promise and Structural Constraint
Authors: Ogonna Okafor
Volume: 10
Issue: 8
Pages: 148-156
Publication Date: 2026/08/28
Abstract:
Small and medium enterprises account for close to half of Nigeria's GDP and the overwhelming majority of its employment, yet the sector remains structurally fragile, undercapitalised, and technologically uneven. This paper examines the relationship between artificial intelligence adoption and organizational performance among Nigerian SMEs, situating the discussion within the wider debate on digital transformation in resource-constrained economies. Rather than treating AI adoption as a linear driver of efficiency, the paper argues that its performance effects in Nigeria are conditional, filtered through infrastructural deficits, managerial capacity, and an institutional environment that has not caught up with the pace of technological diffusion. Drawing on a qualitative synthesis of recent Nigerian and comparative African studies, alongside secondary data from SMEDAN, the National Bureau of Statistics, and the Nigerian Communications Commission, the paper applies the Technology-Organization-Environment framework and the Resource-Based View to interpret why AI adoption produces measurable gains for some firms and negligible or even counterproductive outcomes for others. The findings suggest that awareness of AI tools among Nigerian SME operators is high and rising, but actual integration remains shallow, concentrated in customer-facing functions such as chatbots and social media analytics, while deeper applications in inventory optimisation, credit scoring, and production planning remain rare. The paper contends that the dominant policy narrative, which frames AI as a leapfrogging opportunity, understates the extent to which existing infrastructural and financing gaps reproduce old inequalities in new technological form. It closes by arguing for a more differentiated policy approach that distinguishes between adoption as symbolic participation and adoption as operational transformation.