IMF Says AI Could Boost Sub-Saharan Africa's Economy by 4% With Better Power and Internet
A new IMF report shows that artificial intelligence could increase Sub-Saharan Africa's economic output by about 4% over the next decade — but only if governments significantly improve electricity, internet connectivity, and digital skills. Without reforms, the growth dividend would be negligible.
Sub-Saharan Africa stands at a crossroads, with the potential to see its economy grow by approximately 4% over the next decade through artificial intelligence adoption, but only if it can close critical gaps in electricity and internet access, according to a new International Monetary Fund report.
The IMF's departmental paper, "Unlocking the Potential: AI in Sub-Saharan Africa," warns that without decisive policy action, the region's growth dividend could be negligible — adding just 0.2% to GDP, a figure lead author Martin Schindler described as a "rounding error."
The region faces foundational challenges: about half its population lacks reliable power, and only 38% of Africans used the internet in 2024 compared to the global average of 68%.
Sub-Saharan Africa ranks lowest on the IMF's AI Preparedness Index, trailing every region except South Asia, due to shortfalls in digital infrastructure, technical skills, and regulatory capacity.
The report emphasizes that the central concern is not the risk of technological disruption but whether countries can adopt and scale AI quickly enough to capture its benefits and avoid falling further behind.
"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." – IMF departmental paper
Despite the challenges, private-sector investment is gaining momentum. Microsoft and G42 have announced a $1 billion geothermal-powered data center campus in Kenya, while Cassava Technologies and NVIDIA have a $700 million deal to deploy 12,000 GPUs across South Africa, Nigeria, Kenya, Egypt, and Morocco.
However, Africa hosts only about 160 data centers — roughly 5.5% of the global total — with nearly half concentrated in South Africa, Nigeria, and Kenya.
As the AI economic transformation in Africa unfolds, the region's future will depend on decisions made across governments, schools, farms, and firms. As the IMF concluded, Africa does not need to win the race to build cutting-edge AI models — it must find ways to use AI widely, cheaply, and safely.
The window is narrow: over the next decade, the region's young workforce will either find more productive jobs or watch the global productivity gap widen further.
