By TOSI ORE

Africa’s AI Moment: IMF Says Infrastructure, Skills & Policy Will Decide the Continent’s Digital Future

IMF Warns Africa Against Missing the Artificial Intelligence Revolution

THE International Monetary Fund (IMF) has delivered a strong message to governments across sub-Saharan Africa, warning that the continent faces a defining moment in its economic development. According to the global financial institution, Africa risks missing one of the greatest technological and economic opportunities of the decade unless it urgently invests in the infrastructure and human capital required to support the rapid adoption of artificial intelligence (AI).

The warning comes in a new report titled Africa Can Grow Faster With AI—If It Moves Now, which argues that artificial intelligence has the capacity to reshape economies, create millions of opportunities and improve public services. However, the report stresses that these benefits will remain largely theoretical unless African countries address longstanding structural weaknesses that continue to slow digital transformation.

For the IMF, the challenge is no longer whether AI will redefine the global economy. Rather, it is whether Africa can position itself to become an active participant instead of remaining a passive consumer of technologies developed elsewhere.

AI Could Become a Powerful Driver of Economic Growth

The IMF projects that under an ambitious reform agenda, artificial intelligence could increase sub-Saharan Africa’s economic output by approximately four per cent over the next decade.

Although four per cent may appear modest at first glance, economists note that such an increase across an entire regional economy represents billions of dollars in additional production, stronger business competitiveness and expanded employment opportunities.

The institution believes AI could significantly improve productivity across agriculture, manufacturing, healthcare, education, financial services and government administration.

Conversely, if governments fail to improve infrastructure and policy environments, AI’s contribution to regional growth could be limited to as little as 0.2 per cent over the same period.

That difference, the IMF argues, illustrates the enormous economic cost of delayed action.

Electricity Remains Africa’s Biggest Digital Obstacle

Perhaps the strongest message contained in the report concerns electricity.

Artificial intelligence relies heavily on stable computing systems, cloud infrastructure and data centres that require uninterrupted power supplies.

Yet nearly half of sub-Saharan Africa’s population continues to live without reliable electricity.

According to the IMF, this represents one of the continent’s greatest barriers to AI adoption.

Without dependable energy, businesses cannot operate advanced computing systems.

Research institutions struggle to develop new technologies.

Technology startups face higher operating costs.

Governments also find it difficult to digitise public services effectively.

The IMF therefore recommends accelerated investments in national electricity grids alongside expanded mini-grid and renewable energy projects capable of supporting schools, hospitals, innovation hubs and digital business clusters.

Closing Africa’s Internet Gap

Internet connectivity presents another major concern.

While mobile phone ownership has expanded rapidly across Africa over the past decade, internet penetration remains significantly below global averages.

The IMF estimates that only about 38 per cent of Africans had internet access in 2024, compared with roughly 68 per cent globally.

Limited broadband coverage, expensive data services and inadequate fibre-optic infrastructure continue to restrict access to digital technologies.

The report argues that expanding affordable broadband and open-access digital infrastructure would dramatically improve AI adoption across businesses, educational institutions and government agencies.

Digital connectivity, it says, has become as important to economic development as roads, ports and electricity.

Developing Human Capital for an AI Economy

Infrastructure alone will not determine Africa’s AI future.

The IMF says countries must also invest aggressively in education and workforce development.

It recommends stronger emphasis on science, technology, engineering and mathematics (STEM) education.

Beyond formal education, workers will require practical digital skills that enable them to use AI tools effectively across different industries.

The report notes that countries capable of building digitally skilled workforces will attract greater technology investment while improving productivity across both public and private sectors.

Universities, technical institutions and vocational centres therefore have a critical role to play in preparing young Africans for the changing labour market.

Transforming Agriculture, Healthcare & Public Services

The IMF identifies several sectors where artificial intelligence could generate immediate development benefits.

In agriculture, AI-powered weather forecasting, precision farming and predictive analytics could improve food production while reducing crop losses.

Healthcare systems could deploy intelligent diagnostic tools to improve disease detection, patient management and treatment outcomes.

Educational institutions could use personalised digital learning platforms to improve teaching quality and student performance.

Governments could leverage AI to strengthen tax administration, improve public financial management, reduce fraud and deliver social services more efficiently.

These applications demonstrate that AI is not merely a technology-sector issue but a cross-cutting development tool capable of influencing virtually every aspect of national life.

Private Investment Signals Growing Confidence

The report also highlights encouraging signs from the private sector.

Among the most significant investments cited is Microsoft’s partnership with G42 to develop a US$1 billion geothermal-powered data centre in Kenya.

The IMF also references Cassava Technologies’ collaboration with NVIDIA to expand advanced computing infrastructure across several African countries.

These projects are expected to increase the continent’s AI computing capacity substantially.

Nevertheless, the Fund warns that AI investment remains concentrated in only a handful of countries.

South Africa, Nigeria and Kenya currently host the majority of Africa’s approximately 160 data centres.

Without broader regional investment, other African countries risk falling even further behind.

Balancing Innovation with Regulation

The IMF also urges governments to develop modern regulatory frameworks capable of supporting innovation while protecting citizens.

Privacy.

Cybersecurity.

Data governance.

Responsible AI deployment.

Consumer protection.

All require clear policy direction.

The institution argues that governments must avoid excessive regulation that discourages innovation while ensuring that AI technologies are developed and deployed responsibly.

Creating this balance will be essential to building public confidence in emerging digital technologies.

A Race Africa Cannot Afford to Lose

Around the world, governments are investing heavily in artificial intelligence as they compete for technological leadership and future economic growth.

The IMF believes Africa still has an opportunity to benefit from this transformation.

However, that opportunity will depend less on sophisticated AI software than on solving fundamental development challenges that have persisted for decades.

Reliable electricity.

Affordable internet.

Digital education.

Supportive regulation.

Research investment.

These, according to the IMF, remain the true foundations upon which Africa’s AI future will be built.

For policymakers, the report serves both as a warning and a roadmap. Move decisively, the Fund says, and artificial intelligence could become one of Africa’s most powerful engines of inclusive growth. Delay further, and the continent risks watching another global technological revolution unfold from the sidelines.