Artificial intelligence (AI) could increase Sub-Saharan Africa’s economic output by up to 4% over the next decade, but only if governments accelerate investment in reliable electricity, affordable internet access, digital skills and effective AI governance, according to new research published by the International Monetary Fund (IMF).
The findings are outlined in the IMF’s latest departmental paper, Unlocking the Potential: AI in Sub-Saharan Africa, alongside a policy article titled Africa Can Grow Faster With AI If It Moves Now.
The Fund argues that while AI presents a significant opportunity to boost productivity, create better jobs and improve public services, the region must first overcome longstanding infrastructure and digital readiness challenges.
According to the IMF, Sub-Saharan Africa currently ranks lowest on its AI Preparedness Index due to limited electricity access, inadequate internet connectivity, shortages of digital skills and underdeveloped regulatory frameworks.
At present levels of preparedness, the Fund estimates AI would contribute only 0.2% to the region’s gross domestic product over the next decade.
However, with the right investments and policy reforms, that contribution could rise to around 4%, adding nearly half a percentage point to annual economic growth.
The IMF highlighted electricity as one of the region’s most pressing constraints.
Nearly half of Sub-Saharan Africa’s population still lacks reliable access to power, making it difficult to support the data centres, cloud infrastructure and digital services required for widespread AI adoption.
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The report recommends expanding electricity grids and investing in mini-grid solutions, particularly around schools, hospitals and business hubs, to support digital transformation.
Internet connectivity remains another significant barrier. While global internet penetration reached approximately 68% in 2024, only about 38% of people in Africa were connected.
The IMF says greater investment in fibre-optic networks, open-access broadband infrastructure and affordable connectivity will be essential if businesses and public institutions are to adopt AI technologies at scale.
The report also calls for stronger investment in education and workforce development to prepare people for an AI-driven economy.
Expanding digital literacy, technical training and AI-related skills will help businesses make productive use of the technology while reducing the risk of widening economic inequality across the region.
At the same time, the IMF urged governments to establish clear regulatory frameworks that promote innovation while ensuring AI is deployed safely and responsibly.
Despite the challenges, the IMF noted that momentum is already building across Africa.
Major technology investments, including new AI-focused data centres and computing infrastructure in countries such as Kenya, Nigeria and South Africa, demonstrate growing private-sector confidence in the continent’s digital future.
However, the Fund warned that without broader improvements in infrastructure, these investments could remain concentrated in only a handful of countries, limiting the wider economic benefits.
The IMF’s projections apply to Sub-Saharan Africa as a region, rather than any single country.
While Nigeria, as one of Africa’s largest economies, is expected to benefit from stronger AI adoption, the report does not forecast a specific 4% GDP increase for Nigeria alone. Instead, it concludes that the region’s ability to unlock AI-driven growth will depend on coordinated investment in power, connectivity, skills and governance over the coming decade.
AI Writer
Bio: Joseph Michael is an MBA graduate in Marketing from Ladoke Akintola University of Technology and a passionate tech enthusiast. As a professional writer and author at AIbase.ng, he simplifies complex AI concepts, explores digital innovation, and creates practical guides for Nigerian learners and businesses. With a background in marketing and brand communication, Joseph brings clarity, insight, and real-world relevance to every article he writes.