The International Monetary Fund (IMF) has warned that sub-Saharan Africa risks missing out on the economic benefits of artificial intelligence (AI) unless governments address longstanding deficits in electricity supply, internet connectivity and digital skills.
Gatekeepers News reports that in its departmental paper, Unlocking the Potential: AI in Sub-Saharan Africa, released on Tuesday, the IMF said widespread AI adoption could raise the region’s economic output by about four percent over the next decade. However, it cautioned that the expected gains would remain limited if critical infrastructure and policy challenges are not addressed.
Under existing conditions, the fund projects that AI would increase productivity by only 0.2 percent and lift economic growth by just 0.4 percent over the next decade.
“These estimates should be interpreted as a current-conditions diagnostic rather than a forecast of AI’s technological potential,” the report stated.
“They reflect today’s low adoption, infrastructure gaps, and sectoral structure; they do not capture the full range of gains that could arise from faster diffusion, structural transformation, public sector applications, or AI-enabled innovation.”
According to the IMF, the region’s primary challenge is not the fear of AI replacing jobs but its ability to adopt, adapt and scale the technology quickly enough to remain competitive.
“For Sub-Saharan Africa, the central concern is not the risk of technological disruption, but whether countries will be able to adopt, adapt, and scale AI quickly enough to capture its benefits and avoid falling further behind,” the report added.
Region Ranks Lowest in AI Readiness
The IMF said sub-Saharan Africa ranks lowest on its AI Preparedness Index due to weaknesses in digital infrastructure, human capital, innovation ecosystems and AI governance, factors that continue to constrain AI adoption and the region’s ability to respond to changing labour market demands.
The report identified unreliable electricity as one of the biggest barriers to AI development, noting that about half of the region’s population lacks dependable power, while 78 percent of businesses experience frequent electricity outages that reduce annual sales by an average of 8.4 percent.
Internet access also remains limited. According to the report, only 38 percent of Africans used the internet in 2024, compared with the global average of 68 percent. The IMF said expanding fibre-optic networks and making broadband more affordable would be essential to accelerating AI adoption across the continent.
The report further highlighted a shortage of technical expertise, noting that fewer than one in four higher education students in sub-Saharan Africa are enrolled in science, technology, engineering and mathematics (STEM) programmes. Tertiary education enrolment in the region stands at just nine percent, significantly below the global average.
AI Investment Gathering Pace
Despite these challenges, the IMF noted that investment in AI infrastructure is beginning to accelerate across Africa.
It cited Microsoft and G42’s planned $1 billion geothermal-powered data centre campus in Kenya, as well as Cassava Technologies’ $700 million partnership with NVIDIA to deploy 12,000 graphics processing units (GPUs) across Nigeria, South Africa, Kenya, Egypt and Morocco.
According to the report, Africa currently hosts about 160 data centres, representing roughly 5.5 percent of the global total, with nearly half located in South Africa, Nigeria and Kenya.
However, the IMF warned that AI investments could become increasingly concentrated in a small number of countries if existing digital infrastructure gaps are not addressed.
The fund identified Nigeria, South Africa, Mauritius, Botswana and Namibia as the sub-Saharan African countries with the greatest potential to benefit from AI-driven productivity gains once barriers to adoption are removed.
The IMF stressed that unlocking AI’s full economic potential will require sustained investment in reliable electricity, affordable broadband, technical skills and innovation, warning that countries that fail to make these investments risk falling further behind as AI adoption continues to accelerate worldwide.
