IMF: AI Could Add 4% To Africa’s Economy

The International Monetary Fund (IMF) has concluded that artificial intelligence could raise Sub-Saharan Africa’s economic output by about 4 per cent over the next decade if governments address persistent gaps in electricity, broadband infrastructure and computing capacity.

In a departmental paper, Unlocking the Potential: AI in Sub-Saharan Africa, released last week, the Fund estimates that under current conditions AI will increase regional productivity by only 0.2 per cent and economic growth by 0.4 per cent over the next decade. The report argues that those modest gains reflect the continent’s present level of preparedness rather than the technology’s full economic potential.

“The question for the region,” the authors write, “is whether it rides the wave or gets left behind.”

Nigeria, South Africa lead AI opportunity

The report identifies Nigeria, South Africa, Mauritius, Botswana and Namibia as the Sub-Saharan African economies best positioned to benefit from AI-driven productivity gains.

The ranking reflects economic structure rather than technological maturity. These countries have relatively larger shares of workers employed in finance, information and communications technology, and professional services, where AI is expected to enhance productivity most significantly.

At the same time, the IMF places Sub-Saharan Africa at the bottom of its AI Preparedness Index, citing weaknesses in digital infrastructure, human capital, innovation ecosystems and AI governance. In other words, the countries with the greatest potential still face significant barriers before those gains can be realised.

Three infrastructure gaps

The report identifies three critical bottlenecks limiting AI adoption across the continent.

The first is electricity. Around half of Sub-Saharan Africa’s population still lacks reliable access to power, limiting the operation of data centres, digital infrastructure and AI-enabled devices. The IMF recommends greater investment in national electricity grids as well as mini-grids capable of serving schools, health facilities and other public institutions.

The second is internet connectivity. Only 38 per cent of Africans were using the internet in 2024 compared with a global average of 68 percent. The Fund argues that expanding fibre-optic networks and adopting open-access broadband models will be essential to reducing connectivity costs and improving digital inclusion.

The third is computing infrastructure. Africa hosts approximately 160 data centres, representing about 5.5 per cent of global capacity, with nearly half located in South Africa, Nigeria and Kenya. Without broader investment, the IMF warns that AI infrastructure could become concentrated in a small number of countries, widening digital inequalities across the continent.

Practical AI is already delivering results

Despite the infrastructure gaps, the report highlights several examples where AI is already producing measurable benefits across Africa.

In agriculture, AI-powered advisory platforms help farmers improve planting schedules, fertiliser application and pest detection. Kenya’s Agricultural Observatory Platform provides real-time weather and crop information, while pilot projects in Ghana, Nigeria, Rwanda and Uganda have demonstrated improved crop yields when AI advice is combined with better farming inputs.

In education, AI tutors and SMS-based learning tools are helping address teacher shortages, with chatbot pilots in Nigeria showing measurable improvements in student learning outcomes.

The IMF also points to public administration, where South Africa’s revenue authority uses data analytics to improve tax audit selection, increasing efficiency and strengthening revenue collection.

Collectively, the examples suggest that AI’s greatest near-term impact is likely to come from practical, sector-specific applications that solve existing development challenges rather than from cutting-edge frontier models.

Governments respond

Nigeria’s Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, welcomed the report’s recognition of Nigeria among the region’s leading AI economies, saying it reflected years of investment in policy, talent development and innovation.

He cited initiatives including the National AI Strategy, National AI Trust, AI Collective, the Nigeria AI Scaling Hub, the Three Million Technical Talent programme and Project BRIDGE, the country’s national fibre expansion initiative.

Tijani also acknowledged the IMF’s central recommendation that sustained investment in electricity, broadband infrastructure and digital skills will determine whether countries can fully realise AI’s economic benefits.

Other governments have also begun laying policy foundations. Mauritius became the first African country to publish a national AI strategy in 2018, while Kenya is implementing its own national AI strategy alongside continued investment in data centre infrastructure. Earlier this month, African ministers meeting in Abuja adopted the Abuja Declaration on Meaningful Connectivity, committing to infrastructure sharing, technology-neutral regulation and closer coordination between telecommunications and energy planning.

The IMF says future progress can be measured through improvements in the AI Preparedness Index, rising internet adoption, expanded data centre capacity beyond today’s leading markets, and stronger digital infrastructure across the continent.

For the Fund, the numbers tell the story. The projected 0.2 per cent productivity gain reflects Africa’s current state of readiness. The potential 4 per cent increase in economic output depends on policy choices governments make over the next decade.