AI May Widen Inequality Before Gains Emerge, Edun Warns

Nigeria’s minister of finance and coordinating minister of the economy, Wale Edun, has cautioned that the rapid rise of artificial intelligence could deepen global inequality in the near term, even as the technology holds long term promise for improving efficiency and economic outcomes.

Speaking at the G24 policy discussions in Washington, Edun who also chairs the G24, said the world is entering a technology driven era that will increasingly be shaped by artificial intelligence, but warned that the distributional effects may not be evenly felt across countries or income groups.

“The era we are in is one that clearly is going to be dominated by AI,” he said, adding that while the technology could eventually help close development gaps, its initial impact may be to widen them.

He noted that rather than delivering an immediate leapfrog effect for developing economies, AI could reinforce existing structural inequalities, particularly between advanced economies with stronger digital infrastructure and poorer countries still struggling with basic systems of data, automation and connectivity.

The caution adds to a growing policy debate among emerging market policymakers about whether frontier technologies will accelerate convergence or deepen divergence in global income levels.

However, Edun also pointed to potential domestic gains if countries are able to harness digital tools effectively, particularly in the area of public finance and revenue mobilisation. He said improvements in tax collection and government revenue as a share of gross domestic product would increasingly depend on automation, digitisation and emerging AI driven systems.

According to him, efforts to broaden the tax base and improve efficiency in public administration are already being reshaped by technology, with AI expected to play a growing role in reducing leakages and improving compliance.

In his view, while the early stages of AI adoption may be disruptive, developing economies that invest in digital infrastructure and institutional capacity could eventually use the technology to strengthen governance and support long term growth.