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Artificial intelligence (AI) could boost Sub-Saharan Africa’s economy by about four percent over the next decade if governments improve electricity supply, internet access and digital skills, the International Monetary Fund (IMF) has said.
In a paper published on Tuesday, the IMF said the region could unlock significant productivity gains from AI, but warned that without reforms the economic dividend would be negligible.
As countries and companies race to harness AI’s economic potential, investment in data centres, energy infrastructure and digital networks is accelerating globally.
However, the IMF said Sub-Saharan Africa, which ranks lowest on its AI Preparedness Index, risked capturing only a fraction of those gains if infrastructure bottlenecks remained unresolved.
“Policy changes will be key to whether further growth can be unlocked from AI,” Martin Schindler, Deputy Division Chief and Mission Chief in the IMF’s African Department and lead author of the paper, said.
The Fund estimated that, without decisive action, many countries in Sub-Saharan Africa would see productivity and economic growth increase by only about 0.2 percent over the next decade.
“Frankly, that’s a rounding error,” Schindler said.
The report said Africa remained on the margins of the global AI boom, with Sub-Saharan Africa recording one of the world’s lowest AI adoption rates, ahead of only South Asia.
According to the IMF’s AI Preparedness Index, the gap is driven by weaknesses in digital infrastructure, technical skills and regulatory capacity, limiting both AI adoption and the region’s ability to manage labour market disruptions.
“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.
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The IMF noted that around half of the region’s population lacked reliable electricity, arguing that targeted investment in national grids and mini-grids around schools, clinics and other public facilities could help create local digital hubs.
“It’s hard to have anything without electricity,” said co-author Andrew Tiffin, adding that AI had introduced a new dimension to Africa’s longstanding electricity challenge. He said data centres could also become commercially viable projects capable of accelerating electrification.
Connectivity remains another major obstacle. The report said only 38 percent of Africans used the internet in 2024, compared with a global average of 68%.
Greater investment in fibre-optic backbone infrastructure and open-access networks could help reduce costs and expand internet access, the IMF said.
The report noted that private investors are already positioning themselves to benefit from growing AI demand.
Among the projects cited are Microsoft’s and G42’s planned US$1 billion, 100-megawatt geothermal-powered data centre campus in Kenya, and a US$700 million partnership between Cassava Technologies and NVIDIA to deploy 12,000 graphics processing units (GPUs) across South Africa, Nigeria, Kenya, Egypt and Morocco.
Africa currently hosts about 160 data centres—roughly 5.5 percent of the global total—with nearly half located in South Africa, Nigeria and Kenya, highlighting the risk that AI investment could further widen regional inequalities, the IMF said.
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