johannesburg
Artificial intelligence could boost sub-Saharan Africa’s economy by about 4% over the next decade by improving electricity supply, internet access and digital skills, an International Monetary Fund paper showed on Tuesday. But without such reforms, the dividends of growth could be negligible.
Investment in data centers, energy infrastructure, and digital networks is surging around the world as countries and companies race to secure the economic benefits of AI.
But sub-Saharan Africa, which ranks last on the IMF’s AI Readiness Index, risks reaping only a fraction of the potential gains unless infrastructure bottlenecks are resolved, the paper said.
“Policy changes are key to whether AI can unlock further growth,” said Martin Schindler, deputy director and mission chief of the fund’s Africa department and lead author of the paper.
Without decisive action, he said, many sub-Saharan African countries could see productivity and growth rates of just 0.2% over the next decade.
“Frankly, it’s a rounding error,” he added.
Africa remains on the periphery of the global AI boom, with sub-Saharan Africa recording one of the lowest AI adoption rates of any region in the world, after all regions except South Asia.
The IMF’s AI Readiness Index attributes this gap to a lack of digital infrastructure, technical skills, and regulatory capacity, which limit both adoption and the region’s resilience to labor market disruptions.
“For sub-Saharan Africa, the central concern is not the risk of technological disruption, but whether countries can adopt, adapt, and scale AI fast enough to reap its benefits and avoid further fallback,” the paper says.
Approximately half of the region’s population lacks reliable electricity.
The report says investments in targeted grids and mini-grids around schools, clinics and other public facilities could help create regional digital hubs.
“If you don’t have electricity, it’s hard to get anything,” says co-author Andrew Tiffin. He said the advent of AI essentially added a new wrinkle to Africa’s long-standing electricity problem, as data centers could also become a new profitable project to accelerate electrification.
Connectivity is another constraint. Only 38 percent of Africans used the internet in 2024, compared to 68 percent globally. The paper said increasing investment in fiber backbones and open access networks could reduce costs and expand access.
Some private investors are already betting on growing demand for AI. Microsoft and G42 announced the construction of a $1 billion, 100 MW geothermal power data center campus in Kenya. Cassava Technologies and NVIDIA have signed a $700 million deal to deploy 12,000 GPUs in South Africa, Nigeria, Kenya, Egypt, and Morocco.
Africa has only about 160 data centers, accounting for about 5.5% of the global total, with almost half of them located in South Africa, Nigeria and Kenya, highlighting the risk that AI investments will widen inequality in the region, the report said.
