IMF:Africa Can Grow Faster With AI—If It Moves Now

 

AFRICA Africa Can Grow Faster With AI—If It Moves Now (Credit: Luke Dray/Stringer via Getty Images)  français   português A farmer in Kenya gets weather and planting advice on a basic phone. A teacher in Nigeria uses a chatbot to help students catch up in math. South Africa’s revenue authority uses data analytics to better target tax audits. These are not futuristic examples from Silicon Valley. They are early signs of the broader transformation that artificial intelligence (AI) could bring to sub-Saharan Africa.   AI will reshape the global economy. The question for Africa is whether it rides the wave or gets left behind.   Transformative potential   Our research shows AI’s promise, but it also points to significant risks and challenges. At current levels of preparedness, we estimate that AI will add just 0.2 percent to the region’s GDP over the next decade—little more than a rounding error. However, if countries can put the right foundations in place to accelerate adoption and extend the impact of AI beyond today’s digitally connected firms, the gains could rise to about 4 percent over the decade—nearly half a percentage point of additional growth a year. That extra growth is critical given Africa’s vast jobs challenge. By 2030, sub-Saharan Africa will account for roughly half of new entrants into the global labor force. But the issue is not only the number of jobs needed—it is also their quality. Most workers are still in informal microenterprises or smallholder agriculture, where productivity is far below that of formal firms.   For the region, AI’s main promise is not about replacing office workers, but boosting productivity across the economy—helping informal firms manage inventory, enabling farmers to increase yields, and supporting mid-sized firms to transition to formality and export readiness.   The risk is that the opposite happens. AI adoption in sub-Saharan Africa currently lags well behind every other region. If richer economies race ahead while African firms and governments lag, the productivity gap between the region and the rest of the world will only widen. A different reality   Aid flows have always fluctuated. But this episode stands apart.   The recent cuts are large and broadly simultaneous across countries. They are driven by donor decisions rather than changes in recipient economies. And they come at a time when traditional buffers are weaker: multilateral institutions and NGOs, which have often cushioned past declines, are themselves facing funding constraints. While non-traditional donors, such as China and the Gulf States, have grown their aid presence in the region, the magnitudes are not able to cover the reduction in traditional donors.   The cuts are also difficult to manage because they follow six years of successive shocks—including the pandemic, tighter global financial conditions, and food and energy crises—that have already eroded fiscal space. Delivering on AI’s promise   Two priorities for AI adoption stand out.   First, countries must build the foundations for broad adoption.    AI depends on reliable electricity, affordable broadband and data infrastructure, and workers with digital skills. That means investing in power and connectivity, supporting regional data infrastructure where viable, and strengthening digital and AI literacy through education and training. Countries in Africa do not need to develop the world’s most powerful AI models. But they do need the capacity to adopt, adapt, and scale AI quickly.   Second, build trust—and scale.   AI can widen inequality if its benefits are concentrated among large firms, skilled workers, and urban hubs. It also creates risks around privacy, cybersecurity, misinformation, and dependence on foreign providers. Governments need clear and practical rules on data, competition, consumer protection, cybersecurity, and the public sector’s use of AI. Regional cooperation will also be essential. Many African economies are too small to build AI ecosystems alone. But together they can create the scale needed for infrastructure, data standards, regulation, and markets.   AI in Africa is not just a technology policy issue—it is central to the region’s growth strategy. Africa does not need to win the race to build cutting-edge AI models, but it must find ways to use AI widely, cheaply, and safely. The window is narrow. Over the next debate, Africa’s young and growing workforce will either find more productive jobs, or watch the global productivity gap widen further. The outcome will not be shaped in Silicon Valley, but in the choices made across governments, schools, farms, and firms from Dakar to Dar es Salaam.   *****   Martin Schindler is an advisor, Nikola Spatafora is a senior economist, and Andrew Tiffin is a deputy division chief, all in the IMF’s African Department.   *****   This blog is based on the departmental paper, “Unlocking the Potential: AI in Sub-Saharan Africa,” prepared by an IMF team led by Martin Schindler and Andrew Tiffin, under the general guidance of Andrea Richter Hume and comprising Kamil Dybczak, Marwa Ibrahim, Youssouf Kiendrebeogo, Jacinta Bernadette Shirakawa, Nikola Spatafora, and Solo Zerbo. Related Links Unlocking the Potential: AI in Sub-Saharan Africa We'd love to hear your thoughts and suggestions. Feel free to contact us.   Peter Walker  Managing Editor | IMF Country Focus  pwalker@IMF.org Stay connected with the International Monetary Fund:       This email was sent to politikimx@gmail.com on behalf of: International Monetary Fund 1900 Pennsylvania Ave NW · Washington, DC · 20431