Generative AI Poised to Add $100 Billion to Africa’s Economy, McKinsey Report Reveals
Africa could unlock as much as $100 billion in additional annual economic value if it embraces generative artificial intelligence (Gen AI) at scale, according to a new McKinsey report titled “Leading, Not Lagging: Africa’s Gen AI Opportunity.” Presented at McKinsey’s first-ever media day in Lagos, the study highlights how Gen AI is already reshaping industries on the continent and points to even greater potential ahead.
Mayowa Kuyoro, McKinsey’s global leader for Fintech Practice and head of Financial Services Practice in Africa, said during the briefing that African institutions are not lagging behind global peers. “Over 40 percent of the organisations we surveyed have already begun experimenting with Gen AI, and some are implementing significant solutions,” she explained, adding that traditional AI combined with Gen AI could generate more than double the impact of Gen AI alone.
Generative AI, a form of artificial intelligence that produces original content by analysing vast datasets, has clear applications across Africa’s fastest-growing sectors. McKinsey’s research shows that over half of Gen AI’s potential economic value lies in industries with established players, such as banking, retail, telecommunications, insurance, mining, heavy industry, energy, and public services, including healthcare. These sectors already have the infrastructure and customer bases to benefit from large-scale AI deployment.
In retail alone, Gen AI could unlock between $6.6 billion and $10 billion annually by enabling next-generation shopping experiences, personalised marketing campaigns, smarter store layouts, and better supplier decisions. The telecoms sector stands to gain up to $6 billion through improved B2B and B2C marketing with AI copilots, automated outreach, personalisation, and network issue detection and resolution.
Banking remains one of the biggest opportunities yet to be fully realised. While many African banks are still at the proof-of-concept stage, McKinsey estimates that applying Gen AI across the banking value chain could create $4.7 billion to $7.9 billion in economic value. With strong regulatory frameworks and trust in data governance, experts say Africa has a unique chance to leapfrog into an AI-driven future and ensure that both public and private sectors share in the benefits.
source: business day