AI Could Unlock Africa's Growth, But Infrastructure and Skills Hold the Key to Success: IMF

The IMF says artificial intelligence can become a major engine of growth in Sub-Saharan Africa, but only if governments invest in reliable electricity, digital infrastructure, skills and supportive policies. With stronger public investment and international support, AI could significantly boost productivity, improve public services, attract private investment and accelerate inclusive economic development across the region.

Artificial intelligence (AI) could become one of the biggest drivers of economic growth in Sub-Saharan Africa, but only if governments invest in the foundations needed to support it, according to a new report by the International Monetary Fund (IMF) African Department. The report argues that the region's biggest risk is not losing jobs to AI, as many advanced economies fear, but falling behind in productivity and competitiveness because of weak infrastructure, limited digital skills and slow technology adoption. It urges policymakers to treat AI as part of a broader economic development strategy rather than as a standalone technology initiative.

Today, Sub-Saharan Africa remains the least prepared region for AI adoption. While countries such as Kenya, Rwanda, Mauritius, Seychelles and South Africa have made progress by investing in digital infrastructure and innovation, much of the region continues to struggle with unreliable electricity, low internet penetration, limited computing capacity and shortages of AI-skilled professionals. These challenges have slowed the adoption of advanced technologies and reduced the ability of businesses to improve productivity and compete globally. The report suggests that closing these gaps could allow AI to become a powerful tool for accelerating economic development instead of widening the gap between Africa and more advanced economies.

AI Can Boost Growth, But Only If Africa Builds the Right Foundation

Unlike advanced economies, where AI is expected to automate many office-based jobs, Sub-Saharan Africa has a different employment structure. The IMF estimates that around 80% of jobs in the region have relatively low exposure to AI, mainly because most people work in agriculture, informal businesses and manual occupations. Only about 20% of jobs are highly exposed to AI technologies.

This means the region is unlikely to face large-scale job losses in the near future. However, it also means that Africa will initially benefit less from AI-driven productivity improvements unless businesses begin adopting the technology across more sectors.

The report projects that, under current conditions, AI could increase productivity by only 0.2% over the next decade, resulting in around 0.4% cumulative GDP growth. However, if governments improve infrastructure and encourage wider adoption, productivity could rise by about 2.1%, while GDP could increase by nearly 4% over ten years, adding approximately 0.5 percentage points to annual economic growth. These estimates highlight that policy decisions, not technology alone, will determine AI's economic impact.

Power, Internet and Skills Are the Real Priorities

The IMF identifies reliable electricity as the single biggest requirement for successful AI adoption. Nearly half of Sub-Saharan Africa's population still lacks access to reliable electricity, making it difficult for businesses to operate digital services, cloud computing systems and AI-powered applications. Expanding electricity generation, strengthening transmission networks and investing in renewable energy would not only support AI but also improve the broader investment environment.

Digital infrastructure is another major challenge. Broadband access, internet connectivity and local data centre capacity remain well below global averages, forcing many businesses to depend on overseas cloud services. The report recommends expanding affordable broadband, increasing domestic computing capacity and strengthening regional digital networks to lower costs and encourage innovation.

Human capital is equally important. The region continues to face shortages of AI engineers, data scientists and digital specialists because of limited STEM education and the migration of skilled workers. At the same time, initiatives such as Carnegie Mellon University Africa, Deep Learning Indaba, Masakhane, and Nigeria's Three Million Technical Talent Programme show that Africa is building a stronger AI talent pipeline. Expanding these programmes could help create a workforce capable of supporting future digital industries.

AI Offers Big Opportunities for Governments and Businesses

The report highlights agriculture as one of the sectors with the greatest potential to benefit from AI. Technologies such as precision farming, weather forecasting, crop monitoring and smart irrigation can improve yields, reduce costs and strengthen resilience to climate change. Some long-term scenarios suggest AI-supported farming could significantly increase agricultural productivity, helping improve food security across the region.

Governments could also use AI to modernize tax administration, customs systems, healthcare and education. AI-assisted medical diagnosis, telemedicine and digital learning platforms can improve service delivery while reducing costs. Evidence cited in the report also shows that AI-powered tutoring systems have delivered substantial learning improvements in schools.

For the private sector, AI presents opportunities across telecommunications, fintech, agritech, healthcare, renewable energy, cloud computing and data centre development. Companies investing early in AI infrastructure, digital skills and responsible technology practices could gain a competitive advantage as demand for digital services expands. However, businesses will continue to face risks from weak infrastructure, fragmented regulations, cybersecurity challenges and limited access to skilled workers unless broader reforms are implemented.

Development Partners Have a Critical Role to Play

The IMF argues that international development partners should view AI as part of a wider development agenda rather than simply supporting technology projects. Multilateral development banks, bilateral donors and development agencies can help governments finance electricity expansion, broadband infrastructure, digital education, research institutions and AI governance frameworks. Blended finance, technical assistance and regional cooperation will be essential to reduce investment risks and accelerate digital transformation.

AI will not automatically transform Sub-Saharan Africa's economies. Its success will depend on sustained investments in energy, digital infrastructure, education, innovation and effective regulation. Governments that act early can use AI to improve productivity, create higher-value jobs, strengthen public services and attract private investment. Those that delay risk widening the development gap as AI becomes an increasingly important driver of global economic growth.