Artificial intelligence (AI) could increase the economic output of Nigeria and other sub-Saharan African countries by up to four per cent over the next decade, provided governments make substantial investments in digital infrastructure and skills development, the International Monetary Fund (IMF) has said.
The IMF made the projection in a blog published on Tuesday, drawing from its latest departmental paper titled Unlocking the Potential: AI in Sub-Saharan Africa, authored by Martin Schindler, Nikola Spatafora and Andrew Tiffin of the Fund’s African Department.
According to the report, AI has the potential to transform economies across the region by raising productivity, improving service delivery and supporting innovation.
However, the Fund warned that these gains would remain largely unrealised if countries fail to strengthen the foundations required for widespread AI adoption.
The IMF estimated that, under current levels of preparedness, AI would contribute only 0.2 per cent to sub-Saharan Africa’s gross domestic product over the next 10 years.
“Our research shows AI’s promise, but it also points to significant risks and challenges,” the Fund stated.
It explained that with stronger digital infrastructure, improved internet access, greater investment in education and digital skills, and effective governance, AI’s contribution could rise to about four per cent of GDP over the decade, translating to nearly half a percentage point in additional annual economic growth.
The IMF noted that such growth would be particularly significant for Nigeria and other African countries struggling with the challenge of creating enough quality jobs for their rapidly growing populations.
It projected that by 2030, sub-Saharan Africa would account for roughly half of all new entrants into the global labour force, making productivity-enhancing technologies increasingly important.
Rather than replacing workers, the Fund said AI’s greatest value for Africa lies in improving efficiency across key sectors of the economy. It explained that AI can help informal businesses manage inventory more effectively, enable farmers to increase crop yields through digital advisory services, and support small and medium-sized enterprises in expanding into formal markets and export opportunities.
The report observed that a large proportion of Africa’s workforce remains employed in informal businesses and smallholder farming, where productivity levels are considerably lower than in the formal sector.
The IMF, however, warned that the continent risks falling further behind the rest of the world if governments fail to accelerate AI adoption.
It noted that AI uptake across sub-Saharan Africa remains significantly lower than in other regions, raising concerns that the productivity gap between African economies and more advanced countries could widen if richer nations continue to adopt the technology at a faster pace.
