IMF Paper: AI Could Boost Sub-Saharan Africa Economy by 4% with Power and Internet Reforms

Artificial intelligence could increase Sub-Saharan Africa’s economic output by approximately 4% over the next decade if governments improve electricity supply, expand internet access and build digital skills, according to an International Monetary Fund departmental paper released this week (Reuters).

Without decisive policy action the productivity and growth gains would amount to only about 0.2% over the same period, IMF Deputy Division Chief Martin Schindler, the paper’s lead author, told Reuters. “Frankly, that’s a rounding error,” he said. The findings appear in the paper “Unlocking the Potential: AI in Sub-Saharan Africa.”

Nigeria and other countries in the region could share in those gains provided they accelerate infrastructure and skills investments, The Whistler Newspaper reported, citing the same IMF analysis (The Whistler). Sub-Saharan Africa ranks lowest on the IMF’s AI Preparedness Index because of shortfalls in digital infrastructure, technical skills and regulatory capacity.

The central concern for the region is not technological disruption of jobs but whether countries can adopt, adapt and scale AI quickly enough to capture benefits and avoid falling further behind, the paper states. Around half the region’s population still lacks reliable electricity, making it difficult to run data centres or digital services. “It’s hard to have anything without electricity,” co-author Andrew Tiffin noted, adding that AI-related demand could itself help mobilise investment in power infrastructure.

Internet penetration remains low: only 38% of Africans used the internet in 2024 compared with a global average of 68%, according to the IMF paper as reported by Reuters. Greater investment in fibre backbones and open-access networks could lower costs and widen access. Targeted grid and mini-grid projects around schools, clinics and public facilities could create local digital hubs.

Private-sector interest is already visible. Microsoft and G42 have announced a $1 billion, 100 MW geothermal-powered data-centre campus in Kenya. Cassava Technologies and NVIDIA have a $700 million deal to deploy 12,000 GPUs across South Africa, Nigeria, Kenya, Egypt and Morocco. Africa currently hosts only about 160 data centres—roughly 5.5% of the global total—with nearly half concentrated in South Africa, Nigeria and Kenya, raising the possibility that AI investment could widen regional inequalities if infrastructure is not broadened.

The IMF paper emphasises that policy choices will determine outcomes. Strengthening electricity supply, digital connectivity, skills, cybersecurity and data governance is required to turn potential AI productivity gains into measurable growth. In the absence of those reforms the region risks remaining on the margins of the global AI expansion while other parts of the world capture larger benefits.