The International Monetary Fund (IMF) has warned that sub-Saharan Africa could miss out on the economic benefits of artificial intelligence (AI) unless governments close persistent gaps in electricity supply, internet connectivity and digital skills.
In its departmental paper titled ‘Unlocking the Potential: AI in Sub-Saharan Africa,’ released on Tuesday, the IMF said AI could increase the region’s economic output by about 4 percent over the next decade under a high-adoption scenario.
The global financial institution warned that without improvements in infrastructure and policy, the gains would remain modest.
The fund estimated that under current conditions, AI would increase productivity in sub-Saharan Africa by just 0.2 percent and raise economic growth by only 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 said.
“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.”
The IMF said the region’s biggest challenge is not the risk of AI disrupting jobs but whether countries can adopt, adapt and scale the technology quickly enough to benefit from it.
“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 said.
According to the IMF, sub-Saharan Africa ranks lowest on its AI Preparedness Index due to weaknesses in digital infrastructure, human capital, innovation ecosystems and AI governance, limiting both AI adoption and the region’s ability to respond to labour market changes.
The fund identified unreliable electricity as one of the biggest barriers to AI adoption, noting that about half of the region’s population lacks reliable power, while 78 percent of firms experience routine electricity outages that cost businesses an average of 8.4 percent of annual sales.
Internet connectivity also remains a major constraint, according to the report, with only 38 percent of Africans using the internet in 2024, compared with the global average of 68 percent.
The Bretton Woods institution added that expanding fibre-optic infrastructure and improving broadband affordability would be critical to accelerating AI adoption.
IMF also highlighted a shortage of technical skills, noting that fewer than one-quarter of higher education students in sub-Saharan Africa are enrolled in science, technology, engineering and mathematics (STEM) programmes, while tertiary enrolment in the region stands at about 9 percent, well below the global average.
Despite the challenges, IMF said investment in AI infrastructure is beginning to gain momentum across the continent.
The report cited Microsoft’s and G42’s planned $1 billion geothermal-powered data centre campus in Kenya, alongside Cassava Technologies’ $700 million partnership with NVIDIA to deploy 12,000 graphics processing units (GPUs) across Nigeria, South Africa, Kenya, Egypt and Morocco.
It added that Africa hosts about 160 data centres — roughly 5.5 percent of the global total — with nearly half located in South Africa, Nigeria and Kenya.
IMF warned that AI investment could become increasingly concentrated in a handful of countries if digital infrastructure gaps persist.
The report also identified Nigeria, South Africa, Mauritius, Botswana and Namibia as the sub-Saharan African countries with the highest potential AI productivity gains if barriers to AI adoption are removed.
The IMF said unlocking AI’s full economic potential would require sustained investment in reliable electricity, affordable broadband, technical skills and innovation, warning that countries that fail to make those investments risk falling further behind as AI adoption accelerates globally.
