Harnessing Digitalization Advantage for Economic Transformation:,Evidence from Nigeria

This paper is premised on the proposition that economic transformation occurs when macroeconomic reform is accompanied by innovation policy. Nigeria’s digital economy has expanded rapidly due to digitalization advantage created by innovation policy involving several initiatives that enabled a transition from ICT policy to digital economy policy. This paper applies the Growth with DEPTH analytical framework to diagnose Nigeria’s economic transformation trajectory and examine how digitalization advantage can foster economic transformation powered by technology upgrading and signified by diversification of production and exports, export competitiveness, increases in productivity of labour, and human economic wellbeing. The analysis identifies a persistent paradox: Nigeria leads Africa in fintech, technology startups, and AI readiness, yet ranks at or near the bottom of 32 sub-Saharan African countries in export competitiveness and economic diversification. The paper highlights concrete digitalization effects at the firm and sector level, in agro-processing, solid minerals, petrochemicals, ICT services, environmental technology, and financial inclusion, and derives evidence-grounded policy imperatives for converting digitalization advantage into sustained economic transformation. The lessons from the Nigerian case analysis are instructive for digital economy governance across sub-Saharan Africa.