The International Monetary Fund (IMF) has said artificial intelligence (AI) could increase Sub-Saharan Africa’s economic output by about four per cent in the next decade, but warned that the gains would depend on urgent investments in electricity, Internet connectivity and digital skills.

In a new report released yesterday, the IMF said the region risked missing out on the global AI boom if critical infrastructure and policy gaps are not addressed. It noted that without the necessary reforms, AI could contribute as little as 0.2 per cent to economic growth over the same period.

The report found that SSA ranks lowest on the IMF’s AI Preparedness Index and trails every other region except South Asia in AI adoption. It identified inadequate infrastructure, limited digital skills and weak regulatory capacity as the main barriers slowing AI adoption across the region.

The Deputy Division Chief and Mission Chief in the IMF’s African Department and lead author of the paper, Martin Schindler, said policy decisions taken now would determine whether the region benefits from AI-driven growth.

According to Schindler, the region’s ability to benefit from AI would depend largely on the policy choices governments make.

“Policy changes will be key to whether further growth can be unlocked from AI. Frankly, that’s a rounding error,” he said, warning that without decisive action many SSA countries could see productivity and growth gains of only 0.2 per cent over the next decade.

The IMF stressed that the region’s biggest challenge is not the threat of AI replacing jobs, but its ability to adopt and deploy the technology fast enough to benefit from it.

“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 paper stated.

The co-author, Andrew Tiffin, said improving electricity supply remains the foundation for wider AI adoption across the continent.

“It is hard to have anything without electricity,” Tiffin said, noting that growing investment in AI data centres could also help drive broader electrification by making power projects more commercially viable.

The IMF said about half of the population in Sub-Saharan Africa still lacked reliable electricity, recommending targeted investments in national grids and mini-grids around schools, health centres and other public facilities to create community digital hubs.

It also identified internet access as another major obstacle, noting that only 38 per cent of Africans used the internet in 2024, compared with the global average of 68 per cent. According to the report, expanding fibre backbone infrastructure and open-access networks could reduce costs and improve connectivity across the region.

The paper further noted that Africa had only about 160 data centres, representing roughly 5.5 per cent of the global total, with almost half located in South Africa, Nigeria and Kenya. It warned that continued concentration of AI investments in a few countries could widen regional disparities.