TLDR: Dr. Nasir Aminu, a Senior Lecturer in Economics and Finance at Cardiff Metropolitan University, advocates for the strategic deployment of Artificial Intelligence (AI) in Nigeria’s government budgeting processes. He asserts that AI, particularly generative AI, can significantly enhance transparency, detect fraud, improve fiscal discipline, and boost overall budget efficiency, addressing the nation’s persistent challenges with budget padding and public finance mismanagement.
Nigeria faces ongoing struggles with budget padding, misappropriation, and inefficiencies within its public finance management system. In light of these challenges, Dr. Nasir Aminu, a Senior Lecturer in Economics and Finance and a Senior Fellow of Advanced Higher Education at Cardiff Metropolitan University, highlights the transformative potential of Artificial Intelligence (AI) in promoting transparency and efficiency.
In an exclusive interview, Dr. Aminu presented a compelling case for integrating AI into government budgeting processes, describing it as a ‘game-changer’ for detecting fraud, improving fiscal discipline, and enhancing overall budget efficiency. He noted, ‘So, there is room for it, especially in Nigeria, where we have a culture of slow and lack of inefficient work. GenAI can enhance and make things more efficient.’
Dr. Aminu’s insights are informed by his recent research, conducted with scholars from the United Kingdom and Bulgaria, which explored the relevance of generative artificial intelligence chatbots in investment decision-making. The study investigated the accuracy and specificity of AI chatbot recommendations for investments in both a strong financial center like the UK and a lower-income developed economy like Bulgaria. The research employed a two-stage mixed approach, combining quantitative questionnaires with verification by financial experts. It found that while AI provides valuable information, human verification remains crucial, and the prompts provided did not significantly influence responses in Bulgaria but were significant for UK investments. The study’s originality lies in its assessment of GenAI chatbots’ investment recommendations across different periods, investment amounts, and countries.
Applying these principles to the Nigerian context, Dr. Aminu emphasized that AI functions as an ‘assistant,’ capable of processing vast amounts of data. He stated that without the necessary data, AI would be ‘handicapped,’ and stressed that the ‘final decision comes into play’ with human involvement. However, he highlighted AI’s utility in tasks like spreadsheet analysis and data extrapolation, noting its potential to detect fraud, a significant issue in Nigeria’s financial system, much like its application in the UK’s healthcare and financial sectors.
A prime example of AI’s potential in Nigeria is in budget scrutiny. Dr. Aminu pointed out that the 2025 budget, with its 2100 lines and 285 pages of expenditures, could be quickly analyzed by generative AI to detect padded elements within minutes. He contrasted this with the three months it took an NGO like BudgIT to identify a few loopholes, some of which were later debunked. AI could empower members of the National Assembly to swiftly identify duplications and inconsistencies, thereby fostering fiscal efficiency, a key objective advocated by institutions like the World Bank and IMF. He cited concerns over substantial allocations, such as over N300 billion for streetlights and boreholes, questioning the lack of sustainable solutions, and suggested that GenAI could offer theoretical and data-driven alternatives.
Furthermore, AI could measure performance indices for budget implementation, addressing issues like the inability to implement the 2025 budget due to uncompleted capital expenditures from 2024. While acknowledging AI’s powerful capabilities, Dr. Aminu clarified that it would not replace traditional investment advisors but rather serve as an ‘additional tool’ to enhance their efficiency. He underscored that human experience and the ability to factor in all risks cannot be replicated by AI, making human decisions indispensable.
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Beyond AI’s direct application, the interview also touched upon Nigeria’s Foreign Direct Investment (FDI) landscape and exchange rate policies. Dr. Aminu noted Nigeria’s FDI at approximately $1.08 billion, significantly lower than Egypt’s $14 billion, indicating an underperformance compared to other African nations and historical figures. He attributed this to the unconducive economic environment for businesses and policies that hinder profitability projections for foreign investors. Regarding the unification of the exchange rate, Dr. Aminu argued that while it sounded academic, it has created volatility and devalued the currency, making imports more expensive and hindering investor confidence due to unpredictability. He suggested that countries with stable or managed exchange rates, like China or Japan, attract more investment than Nigeria, where the unified exchange rate has proven to be the ‘wrong way to go.’ He concluded that the ‘true value’ of the naira is a broad term, and currency value is fundamentally based on trust and confidence, not just intrinsic factors.
