The International Monetary Fund (IMF) has warned that sub-Saharan Africa risks missing out on one of the biggest economic opportunities of the decade unless governments move swiftly to invest in electricity, digital infrastructure, internet connectivity and workforce skills needed to support the adoption of artificial intelligence (AI).

In a new report titled: “Africa Can Grow Faster With AI—If It Moves Now” posted on its blog, the IMF said AI has the potential to increase the region’s economic output by about four per cent over the next 10 years, creating better jobs, improving productivity and transforming public service delivery. However, the institution cautioned that these gains will only materialise if African countries close long-standing infrastructure and digital readiness gaps.

According to the Washington-based lender, the greatest risk for Africa is not that AI will replace jobs, but that the continent could fall further behind the rest of the world if governments fail to adopt and deploy the technology quickly.

“The central concern for sub-Saharan Africa is not technological disruption but whether countries can adopt, adapt and scale AI rapidly enough to capture its benefits,” the IMF said.

The report estimates that under an ambitious reform scenario, AI could add roughly four per cent to regional GDP over the coming decade.

Without significant improvements in infrastructure and policy, however, AI’s contribution to growth could be as little as 0.2 per cent, highlighting the enormous cost of delayed action.

The IMF noted that Africa currently ranks lowest on its AI Preparedness Index due to weak digital infrastructure, limited technical capacity, inadequate regulations and insufficient investment in research and innovation.

Among the biggest obstacles identified is unreliable electricity supply. Nearly half of sub-Saharan Africa’s population still lacks access to dependable power, making it difficult for businesses, research institutions and technology companies to deploy AI systems that require stable energy supplies.

The Fund urged governments to accelerate investments in national power grids while expanding mini-grid solutions around schools, hospitals and innovation hubs to create reliable digital ecosystems capable of supporting AI-driven industries.

Internet access remains another critical challenge. Although mobile phone usage has expanded rapidly across the continent, only about 38 per cent of Africans were using the internet in 2024, compared with the global average of approximately 68 per cent. The IMF said expanding broadband infrastructure, fibre-optic networks and open-access internet systems would significantly improve AI adoption across businesses and public institutions.

Beyond infrastructure, the report stressed the importance of investing heavily in education and digital skills. It argued that African countries should strengthen science, technology, engineering and mathematics (STEM) education while equipping workers with practical AI and digital competencies to meet future labour market demands.

The Fund believes AI can become a powerful tool for accelerating development across agriculture, healthcare, education, financial services and public administration. Farmers could use AI-powered weather forecasting and precision agriculture to improve yields, while hospitals could deploy intelligent diagnostic systems to improve healthcare outcomes. Governments could also leverage AI to enhance tax administration, strengthen public financial management and improve the delivery of social services.

Private investment in Africa’s AI ecosystem is already gathering pace.

The IMF highlighted major investments in digital infrastructure, including Microsoft’s partnership with G42 to develop a US$1 billion geothermal-powered data centre in Kenya, as well as Cassava Technologies’ collaboration with NVIDIA to deploy advanced graphics processing units across several African countries. These investments are expected to expand the continent’s AI computing capacity substantially.

Nevertheless, the IMF warned that AI development remains concentrated in only a handful of countries. Africa currently has about 160 data centres, most of them located in South Africa, Nigeria and Kenya, raising concerns that the benefits of AI could become unevenly distributed unless other countries improve their digital infrastructure.

The report also called for stronger regulatory frameworks that encourage innovation while safeguarding privacy, cybersecurity and responsible AI deployment. Policymakers, it said, must strike a balance between promoting technological advancement and managing emerging risks associated with the technology.

The IMF’s recommendations come as governments worldwide intensify investments in artificial intelligence, viewing the technology as a key driver of future productivity and economic competitiveness.

For Africa, however, the institution insists that success will depend less on the sophistication of AI models and more on addressing basic development constraints such as electricity, internet access, digital skills and supportive regulation.

“If Africa moves decisively now, AI can become a powerful engine for faster growth, higher productivity and more inclusive development rather than another missed technological revolution”,

the IMF stated. (The Sun)

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