The veteran winger is on loan from Chelsea for the season, but has scored only one goal in eight appearances so far.
Nicol believes the Gunners could have secured a more productive player in Sterling’s place in the summer.
Nicol told ESPN: "Let’s be honest, what has he done? He’s done zero. I mean, at the very least, come on and give Martinelli and Saka on the other side a break and push the rest of the players to be better.
"I mean, just all the things, all the reasons that he was brought. You know, use your experience, push the other two to be better, giving them competition, and then when you do get a chance, make it count.
"I mean, he’s done nothing, absolutely zero. (I expected) more than zero, I expected more than nothing at all, absolutely. Okay call me crazy, but if you sign somebody and they do nothing, that’s not good."
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