AI could add 4% to Nigeria, sub-Saharan Africa’s GDP, says IMF
Artificial intelligence could increase Nigeria’s and sub-Saharan Africa’s economic output by as much as four per cent over the next decade if governments accelerate investment in digital infrastructure, skills development and governance, the International Monetary Fund has said.
The IMF disclosed this in a blog published on Tuesday, based on its departmental paper titled Unlocking the Potential: AI in Sub-Saharan Africa.
The report was authored by Martin Schindler, Nikola Spatafora and Andrew Tiffin of the Fund’s African Department.
According to the IMF, AI’s contribution to the region’s economy would remain negligible without significant improvements in preparedness, estimating that current conditions would add only 0.2 per cent to gross domestic product over the next decade.
“Our research shows AI’s promise, but it also points to significant risks and challenges,” the Fund stated.
It added: “At current levels of preparedness, we estimate that AI will add just 0.2 percent to the region’s GDP over the next decade—little more than a rounding error. However, if countries can put the right foundations in place to accelerate adoption and extend the impact of AI beyond today’s digitally connected firms, the gains could rise to about 4 percent over the decade—nearly half a percentage point of additional growth a year.”
The IMF said such growth would be particularly important for Nigeria and other African economies facing rising pressure to create jobs for a rapidly expanding workforce.
“That extra growth is critical given Africa’s vast jobs challenge. By 2030, sub-Saharan Africa will account for roughly half of new entrants into the global labour force. But the issue is not only the number of jobs needed—it is also their quality,” the report noted.
It observed that most workers across the region remain employed in informal microenterprises or smallholder agriculture, where productivity is significantly lower than in formal businesses.
Rather than replacing workers, the IMF argued that AI’s greatest value in Africa lies in improving productivity across key sectors.
“For the region, AI’s main promise is not about replacing office workers, but boosting productivity across the economy—helping informal firms manage inventory, enabling farmers to increase yields, and supporting mid-sized firms to transition to formality and export readiness,” it said.
The Fund, however, warned that Africa risks falling further behind if AI adoption continues to trail other parts of the world.
“The risk is that the opposite happens. AI adoption in sub-Saharan Africa currently lags well behind every other region. If richer economies race ahead while African firms and governments lag, the productivity gap between the region and the rest of the world will only widen,” it stated.
The IMF highlighted Nigeria among countries already experimenting with AI applications capable of delivering measurable benefits.
It cited the example of Nigerian teachers using chatbots to improve mathematics learning, noting that “recent pilot programs in Nigeria show that well-designed chatbot tutoring can deliver sizable learning gains.”
The report also pointed to trials conducted in Nigeria, Ghana, Rwanda and Uganda, which indicated that digital agricultural advisory services could improve crop yields when combined with better farming inputs.
According to the IMF, agriculture presents one of Africa’s biggest opportunities for AI because of the sector’s large share of employment and persistent productivity gaps.
“AI tools can give farmers practical, low-cost advice—when to plant, how much fertilizer to use, how to spot pests, and how to cope with weather shocks,” it said.
Beyond agriculture, the Fund said AI could improve education, healthcare and tax administration across the continent.
“In healthcare, AI will not replace Africa’s overstretched nurses and doctors, but it can help them do more by supporting triage, diagnosis and follow-up care,” it stated.
The IMF also noted that AI-driven data analytics were already helping governments, including Kenya and South Africa, strengthen tax compliance and mobilise more revenue for development.
The report argued that Africa had previously demonstrated its ability to leapfrog technological barriers through mobile money and could replicate that success with AI if the technology remained affordable, practical and trusted.
“AI could help deliver the next leapfrog if it is affordable, useful and trusted in the African context,” the Fund said.
To unlock the projected economic gains, the IMF identified two priorities for governments across the region.
The first, it said, is building the foundations for widespread AI adoption by expanding electricity supply, broadband infrastructure and digital skills.
“AI depends on reliable electricity, affordable broadband and data infrastructure, and workers with digital skills. That means investing in power and connectivity, supporting regional data infrastructure wheretion and training,” the report stated
It added that African countries did not necessarily need to develop frontier AI models but should instead strengthen their capacity to adopt, adapt and deploy existing technologies at scale.
The second priority, according to the IMF, is building public trust through appropriate regulation and regional cooperation.
The Fund warned that AI could worsen inequality if its benefits remain concentrated among large firms, highly skilled workers and urban centres.
It also highlighted growing concerns about privacy, cybersecurity, misinformation and dependence on foreign technology providers.
“Governments need clear and practical rules on data, competition, consumer protection, cybersecurity, and the public sector’s use of AI,” the report said.
It further argued that collaboration among African countries would be essential because many economies are too small to independently develop competitive AI ecosystems.
“Many African economies are too small to build AI ecosystems alone. But together they can create the scale needed for infrastructure, data standards, regulation, and markets,” it stated.
The IMF concluded that AI should be treated as a central pillar of Africa’s economic development strategy rather than merely a technology policy issue.
“AI in Africa is not just a technology policy issue—it is central to the region’s growth strategy,” the Fund said.
It added: “Africa does not need to win the race to build cutting-edge AI models, but it must find ways to use AI widely, cheaply, and safely. The window is narrow. Over the next decade, Africa’s young and growing workforce will either find more productive jobs, or watch the global productivity gap widen further. The outcome will not be shaped in Silicon Valley, but in the choices made across governments, schools, farms, and firms from Dakar to Dar es Salaam.”
Sami Tunji is a Senior Business Correspondent at Punch Newspapers with about five years of experience in data-driven reporting. He covers finance, ICT, and broader macroeconomic issues, combining analytical insight with clear storytelling. Sami’s work reflects strong editorial judgment, professional development, and a commitment to accurate and informative business journalism.
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