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The International Monetary Fund (IMF) and the World Bank have warned that aggressive adoption of artificial intelligence (AI) could undermine inclusive economic growth and job creation, particularly in developing economies struggling to translate technological advances into productive employment.
The warning came at the opening of the IMF and World Bank Annual Meetings in Bangkok, Thailand, where Singaporean President Tharman Shanmugaratnam joined the institutions in highlighting the need to balance AI-driven productivity gains with employment opportunities and economic resilience.
The meetings also provide Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who leads the Nigerian delegation alongside officials from the Central Bank of Nigeria (CBN), an opportunity to present investment opportunities arising from the country’s economic reforms. Fiscal and foreign exchange market reforms, and their reported gains, are central to Nigeria’s engagements with international investors.
IMF and World Bank warn of AI’s employment risks
As AI adoption accelerates, concerns are growing that automation could displace entry-level jobs, increase returns on capital and widen income inequality. The IMF and World Bank said governments must account for job protection and economic resilience when determining how the technology is adopted and deployed.
World Bank Group President Ajay Banga called for practical applications of AI that raise productivity while expanding employment opportunities in developing economies. He identified agriculture, primary healthcare, tourism, infrastructure and manufacturing as priority sectors where targeted AI solutions could help businesses operate more productively and create jobs.
Banga also urged governments to strengthen infrastructure, improve governance and reduce investment risks to attract the private capital needed to generate employment at scale.
World Bank places job creation at the centre of development
Banga said employment had become central to the World Bank’s development agenda because of the large number of young people expected to enter the global labour market in the coming years.
“In the coming 15 years, 1.2 billion young people are going to become 18 years of age,” he said, describing the demographic shift as a potential dividend if countries provide adequate healthcare, education and skills development.
He argued that employment should extend beyond traditional jobs in large or small companies to include entrepreneurship and other productive activities that enable people to earn a dignified living.
“The bank’s entire focus has moved towards that over the last few years. It is not that we do not build a school, or we would not build a highway, or we would not build a skilling centre or a healthcare clinic.
“We have to do all those, but we have to do them with the perspective of job creation,” he said.
Banga maintained that governments should establish the enabling environment for economic activity, while private businesses should remain the principal drivers of employment. He estimated that the private sector accounts for between 75 and 85 per cent of jobs in many countries.
He also highlighted infrastructure development, tourism and value-added manufacturing as sectors with significant employment potential. Developing economies, he said, must use technology to expand domestic productive capacity rather than rely solely on the transfer of jobs from advanced economies.
Singapore President warns growth alone will not deliver jobs
Tharman Shanmugaratnam cautioned that economic growth does not automatically translate into sufficient employment. He cited China and India as examples of economies experiencing growth alongside relatively weak job creation.
“Growth is going to be critical to secure good jobs, but growth is not itself going to be sufficient to achieve those good jobs,” he said.
Tharman warned that AI could widen the gap between economic growth and employment if governments failed to act. He urged policymakers to harness the technology to create quality jobs while helping workers acquire skills that support long-term careers in modern economies.
He identified manufacturing, green energy and healthcare as potential sources of well-paying employment and called for stronger skills development.
The central challenge, he said, is using AI to increase output without excluding workers from the benefits of economic progress.
IMF chief raises concerns over AI and public finances
IMF Managing Director Kristalina Georgieva warned that the shift towards AI could have significant implications for public finances, particularly if household income declines relative to returns on capital.
She noted that governments traditionally rely heavily on taxes on people and labour-related economic activity to generate revenue. If AI changes the structure of labour markets, governments may need to reconsider how they raise sufficient funds to support workers and help societies adjust.
“If AI changes the structure of the labour market, and then there is less labour, more capital. What do we tax?” Georgieva asked.
Her remarks highlighted a broader fiscal challenge associated with AI adoption: changes in the balance between labour and capital could affect the revenue base governments depend on to fund public services and respond to economic disruption.
Nigeria pitches reform-driven investment opportunities
Against the backdrop of global discussions on AI, productivity and employment, Nigeria is using the annual meetings to engage international investors on opportunities linked to its economic reforms.
Oyedele leads the Nigerian delegation, which includes the CBN team, with fiscal and foreign exchange market reforms forming part of the country’s investment pitch.
The discussions underscore the importance of ensuring that technological progress and economic reform translate into productive capacity, sustainable employment and inclusive growth, particularly in developing economies facing rapid demographic and technological change.
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