IMF Warns AI Could Shrink Graduate Job Prospects in Nigeria and Other Developing Nations
The International Monetary Fund (IMF) has issued a warning that artificial intelligence (AI) may reduce job opportunities for young people just entering the workforce, heightening worries about whether developing economies can generate enough employment to absorb their expanding labour forces.
IMF Managing Director Kristalina Georgieva stated that demand for first jobs after graduation is already falling, notably in sectors exposed to technology, and cautioned that governments need to rethink education, skills training and labour market policies to equip workers for a shifting employment landscape.
Georgieva made these remarks at a World Bank Group flagship event titled "Small AI: More and Better Jobs," held during the 2026 World Bank and IMF meetings. She noted that AI is already altering the global employment structure, with routine and repetitive roles seeing reduced demand even as fresh opportunities arise in other areas.
She estimated that AI's impact on jobs worldwide could touch about 40 per cent of employment through augmentation, downgrading or elimination, stressing the importance of governments grasping how the technology is transforming labour markets.
The IMF chief emphasised that authorities must closely monitor labour market trends, adjust education systems and encourage lifelong learning, since workers can no longer rely on a single skill for their entire careers.
Also addressing the event, Singapore President Tharman Shanmugaratnam said the drop in demand for entry-level positions is already apparent, particularly in sectors most exposed to AI. "The first job upon graduation is now seeing less demand. The evidence is already very clear," he said.
Tharman cautioned that developing countries could see a growing gap between economic growth and job creation if they do not react to technological shifts. He observed that some developing economies are posting strong growth without matching improvements in employment, and added that AI could widen this divergence if governments remain inactive.
He urged governments to collaborate with private businesses to generate opportunities for fresh graduates, arguing that losing the first step on the career ladder could rob young people of more than a year's work experience.
According to him, extended delays in landing first jobs could leave successive groups of graduates vying for scarce openings while eroding their skills and confidence in the future. "We can't afford to lose that," he said, calling on governments to enact policies that motivate private sector employers to hire new graduates.
Tharman also advocated for reforms in higher education, saying universities and other tertiary institutions must focus more on practical training, internships and workplace attachments.
He noted that the link between academic qualifications and career prospects is weakening, making it essential for education systems to prepare students for evolving workplace demands instead of depending overwhelmingly on academic credentials.
The Singapore president added that workers will need to continuously upgrade their skills as AI becomes more deeply integrated into economic activities.
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