The world body said that advanced economies are expected to experience a higher impact compared to emerging markets and low-income countries.

In a blog post, Kristalina Georgieva, managing director of IMF, called on governments to establish social safety nets and offer retraining programmes to counter the impact of AI.

“In most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers must proactively address to prevent the technology from further stoking social tensions,” she wrote ahead of the yearly meeting of the World Economic Forum (WEF) in Davos, Switzerland, where the topic will be a key talking point.

Sam Altman, Chief Executive of ChatGPT-maker OpenAI, and his biggest backer, Satya Nadella, Microsoft CEO will speak at the event later this week as part of a programme that includes a debate today on ‘Generative AI: Steam Engine of the Fourth Industrial Revolution?’

As AI continues to be adopted by more workers and businesses, it is expected to both help and hurt the human workforce, Georgieva noted in her blog.

Echoing previous warnings from other experts, Georgieva said the effects were expected to be felt more deeply in advanced economies than emerging markets, partly because white-collar workers are seen to be more at risk than manual laborers.

In more developed economies, for example, as much as 60 per cent of jobs could be impacted by AI. Approximately half of those may benefit from how AI promotes higher productivity, she said.

“For the other half, AI applications may execute key tasks currently performed by humans, which could lower labor demand, leading to lower wages and reduced hiring,” wrote Georgieva, citing the IMF’s analysis.

“In the most extreme cases, some of these jobs may disappear.”

In emerging markets and lower-income nations, 40 per cent and 26 per cent of jobs are expected to be affected by AI, respectively. Emerging markets refer to places such as India and Brazil with sustained economic growth, while low-income countries refer to developing economies with per capita income falling within a certain level such as Burundi and Sierra Leone.

“Many of these countries don’t have the infrastructure or skilled workforces to harness the benefits of AI, raising the risk that over time the technology could worsen inequality,” noted Georgieva.

She warned that the use of AI could increase chances of social unrest, particularly if younger, less experienced workers leveraged the technology to help boost their output while more senior workers struggle to keep up.

AI became a hot topic at the WEF in Davos last year as ChatGPT took the world by storm. The chatbot sensation, which is powered by generative AI, sparked conversations on how it could change the way people work around the world due to its ability to write essays, speeches, poems and more.

Since then, upgrades to the technology have expanded the use of AI chatbots and systems, making them more mainstream and spurring massive investments.

Some tech firms have already directly pointed to AI as a reason they are rethinking staffing levels.

While workplaces may shift, widespread adoption of AI could ultimately increase labor productivity and boost global GDP by seven per cent yearly over 10 years, according to a March 2023 estimate by Goldman Sachs economists.

Georgieva also cited opportunities to boost output and incomes around the world with the use of AI.

“AI will transform the global economy,” she wrote. “Let’s make sure it benefits humanity.”

Recognizing the potential of this sector, the Nigerian federal government has set an ambitious target of earning $5 billion from exporting jobs in the outsourcing industry by 2024, according to Dr. Ezra Yakusak, the Executive Director of the Nigerian Export Promotion Council (NEPC).

Speaking at the National Conference on International Trade-in-Service organized by the council in Abuja, Dr. Yakusak shed light on the profound impact outsourcing can have on the Nigerian economy.

Under the umbrella of outsourcing, a diverse range of services can be offered, including financial, advertising, courier, customer support, and logistics. Dr. Yakusak emphasized that Nigeria is gradually shifting its focus towards exporting services, recognizing that this sector has long been overlooked.

Highlighting Nigeria’s strengths, Dr. Yakusak noted the country’s large population, cost-effective labor, and proficiency in the English language, making it an attractive destination for companies and businesses worldwide.

“The potential of Nigeria’s services sector is immense, and with the right measures in place, it can generate even greater revenue than the $4.8 billion currently earned from product exports,” remarked Dr. Yakusak.

The Nigerian government’s commitment to tapping into this lucrative economic avenue is evident in its determination to achieve the $5 billion services export target by 2024.

To achieve this goal, experts stress the importance of fostering a more export-focused approach and attracting foreign investments. However, Joachim MacEbong, a senior analyst at SBM Intelligence, highlighted that Nigeria still faces challenges in attracting foreign capital, which is vital for creating employment opportunities, especially for the nation’s youth grappling with high levels of unemployment.

MacEbong underscored the significance of becoming more welcoming to foreign investors, as this will enable Nigeria to leverage the opportunities presented by the Africa Continental Free Trade Agreement (AfCFTA).

Additionally, he emphasized the importance of language, suggesting that cultivating more French speakers in Nigeria can help bridge language barriers and further promote service exports.

With a renewed focus on services exports and business services outsourcing, Nigeria aims not only to bolster its economic growth but also to provide much-needed job opportunities for its burgeoning youth population.

As the nation adopts an export-oriented strategy, the hope is that it will attract foreign investments and implement language-friendly policies, ultimately propelling Nigeria toward its economic development goals in the years to come.

As the country embraces these opportunities, experts believe that Nigeria’s services sector has the potential to become a significant player in the global market, driving economic prosperity and positively impacting the lives of its citizens