Africa could miss out on the transformative economic benefits of artificial intelligence unless governments urgently address long-standing challenges in electricity supply, internet access, and digital skills development, the International Monetary Fund (IMF) has warned. In a new report titled Unlocking the Potential: AI in Sub-Saharan Africa, the global lender said AI has the potential to significantly boost economic growth across the region, but only if the right foundations are put in place.
According to the IMF, widespread adoption of AI could increase sub-Saharan Africa’s economic output by as much as 4 percent over the next decade under a high-adoption scenario. However, under current conditions, the impact is expected to remain limited, with productivity projected to rise by just 0.2 percent and economic growth by only 0.4 percent. The report stressed that these figures reflect today’s realities, including low adoption rates, inadequate infrastructure, and limited technological readiness.
Rather than fearing job losses from AI, the IMF believes Africa’s biggest challenge is ensuring that countries can adopt and scale the technology quickly enough to remain competitive. The report noted that sub-Saharan Africa ranks lowest on the IMF’s AI Preparedness Index, largely due to weaknesses in digital infrastructure, innovation ecosystems, workforce skills, and governance frameworks. Without meaningful progress in these areas, the region risks falling even further behind as AI adoption accelerates globally.
One of the most significant obstacles identified is unreliable electricity. The IMF revealed that nearly half of the region’s population lacks dependable access to power, while more than three-quarters of businesses regularly experience electricity outages that negatively affect revenue. Internet access also remains a major hurdle, with only 38 percent of Africans connected online in 2024 compared to the global average of 68 percent. The report further highlighted a shortage of technical talent, pointing out that STEM enrollment and tertiary education participation remain far below global standards.
Despite these challenges, signs of progress are emerging. The IMF highlighted major investments, including Microsoft and G42’s planned $1 billion geothermal-powered data centre campus in Kenya and Cassava Technologies’ $700 million partnership with NVIDIA to expand AI computing infrastructure across several African countries, including Nigeria and South Africa. The report identified Nigeria, South Africa, Mauritius, Botswana, and Namibia as countries with the greatest potential to benefit from AI if barriers are removed. The IMF concluded that sustained investment in power, broadband connectivity, technical education, and innovation will be crucial if Africa hopes to secure its place in the rapidly expanding global AI economy.
source: The cable
