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Artificial Intelligence, Task Automation and Macro-development: Modelling the productivity- welfare trade offs in the Nigeria Economy

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  • Ekpeyong, Paul

Abstract

This paper focuses on analyzing the implications of adopting generative artificial intelligence (AI) at the macroeconomic level in Nigeria through a task-based method of analysis informed by Acemoglu in 2018. In breaking the production process into individual tasks that are carried out either by labor or capital, the study then examines the impact of automation and task complementarities resulting due to AI, on productivity, gross domestic product (GDP), wages, and inequality due to a 10-year time frame. Based on the empirical estimates recorded by some related literatures regarding the effects of capital stock on the total factor productivity (TFP) of three economies, the paper is likely to improve by 0.51% to 0.66% depending on the growth of the capital stock; this translates to an increment in GDP of about 0.93 to 1.16 per cent. Every 10,000 when capital investment is higher by an upper scenario, GDP will increase by up to 1.56 percent. Nonetheless, the welfare issues arise due to the occurrence of bad jobs like misinformation and digital manipulation, which may have the potential to negate up to 0.072 percent gain in the GDP. Demographic and education-based impacts differ as the workers with low educational skills have a slight advantage, whereas those with high skills remain unaffected. Income share held by capital also will increase boosting inequality. The paper highlights the importance of focus on inclusive AI approaches, ethical governance and investments in digital infrastructure in Nigeria. Generative AI is promising in its economic development but will depend on the institutional decisions on its usage, their regulatory rules, and deliberate integration with national development plans.

Suggested Citation

  • Ekpeyong, Paul, 2025. "Artificial Intelligence, Task Automation and Macro-development: Modelling the productivity- welfare trade offs in the Nigeria Economy," MPRA Paper 125347, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:125347
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    References listed on IDEAS

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    1. Daron Acemoglu & Pascual Restrepo, 2020. "The wrong kind of AI? Artificial intelligence and the future of labour demand," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 13(1), pages 25-35.
    2. Daron Acemoglu & David Autor & Jonathon Hazell & Pascual Restrepo, 2022. "Artificial Intelligence and Jobs: Evidence from Online Vacancies," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 293-340.
    3. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    4. Erik Brynjolfsson & Danielle Li & Lindsey Raymond, 2025. "Generative AI at Work," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 140(2), pages 889-942.
    5. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    6. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
    7. Ernst Ekkehardt & Merola Rossana & Samaan Daniel, 2019. "Economics of Artificial Intelligence: Implications for the Future of Work," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-35, June.
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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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