The International Monetary Fund (IMF) has said artificial intelligence (AI) could increase Sub-Saharan Africa’s gross domestic product by about four per cent over the next decade if countries, including Nigeria, address long-standing constraints such as unreliable electricity, weak digital infrastructure and skills shortages.
In its 2026 departmental paper, ‘Unlocking the Potential: AI in Sub-Saharan Africa ‘, released on Tuesday, the IMF said the region has a “narrow but meaningful window of opportunity” to use AI to accelerate economic growth, improve productivity and overcome traditional development challenges.
However, the Fund warned that the region remains the least prepared globally to adopt AI because of major structural weaknesses.
“At present, the region’s capacity to adopt AI is constrained by structural bottlenecks—unreliable and insufficient electricity, limited digital infrastructure, scarce technical skills, and gaps in regulatory and institutional capacity.
“The IMF’s AI Preparedness Index places Sub-Saharan Africa below all other regions, owing to gaps in digital infrastructure, skills, and regulatory capacity, which all serve to limit both AI adoption and resilience to labour market disruption,” it said.
According to the report, AI adoption across Sub-Saharan Africa remains low, with only about nine per cent diffusion compared with 30 per cent in North America.
Despite the low adoption rate, the IMF said the region’s rapidly growing population makes AI increasingly important for future economic growth.
“By 2030, Sub-Saharan Africa will account for roughly half of all new entrants into the global labour force—equivalent to up to 15 million new jobs each year.”
The report said AI offers an opportunity for the region to repeat its history of adopting new technologies rapidly.
“Sub-Saharan Africa bypassed fixed telephone lines in favour of mobile networks with lower fixed costs—a technological shift that has delivered substantial economic gains, connecting previously isolated informal sectors to more efficient formal markets.
“AI presents a narrow but meaningful window of opportunity for countries in Sub-Saharan Africa to accelerate growth and improve living standards,” it said.
Nigeria featured prominently in the report as one of the countries best positioned to benefit from AI because of its labour market structure, technology ecosystem and digital talent initiatives.
According to the IMF, “Job composition in Botswana, Mauritius, Namibia, Nigeria, the Seychelles, and South Africa more closely resembles the patterns observed in emerging market economies.”
The report ranked Nigeria among the top five countries in the region with the greatest potential productivity gains under current conditions.
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However, it said poor electricity supply remains one of the country’s biggest obstacles to AI adoption.
“Evidence from the World Bank’s Enterprise Surveys suggests that generator ownership is widespread in the three countries currently hosting the largest number of data centres—86 per cent of Nigerian firms report owning or sharing a generator.”
Although Nigeria hosts 25 data centres, the IMF noted that electricity subsidies accounted for 0.2 per cent of GDP in 2022, highlighting the fiscal cost of meeting rising power demand.
The report also highlighted several examples of AI already delivering results in Nigeria.
It cited the AI-supported education platform uLesson and noted that “A six-week chatbot-based tutoring program in Nigerian secondary schools generated learning improvements equivalent to roughly two years of schooling.”
The IMF also acknowledged Nigeria’s efforts to strengthen digital skills.
“Nigeria’s Three Million Technical Talent program, launched in late 2023, aims to train 3 million Nigerians in digital and technical skills.”
In agriculture, the Fund said AI-powered advisory tools are already improving productivity.
“Randomised trials across Nigeria, Ghana, Rwanda, Kenya, and Uganda show digital advisories lifting yields up to 15 per cent, and 20–30 per cent with complementary inputs.”
The IMF modelled two possible paths for AI adoption across the region.
Under existing conditions, it projected only marginal productivity gains.
“Under current conditions—including low adoption rates… and limited access to complementary or necessary inputs… productivity in Sub-Saharan Africa [is] projected to rise by only 0.2 per cent cumulatively over the next decade.”
However, the report said reforms that improve electricity supply, digital connectivity and AI adoption could transform the region’s economic outlook.
“If adoption rates were to nearly double… the potential gains in Sub-Saharan Africa would be around 0.8 percentage point… extending AI adoption… to agriculture and other sectors would add a further 0.8 and 0.3 percentage point, respectively… This would raise the median productivity effect more than 10-fold, from 0.2 to around 2.1.”
According to the IMF, the higher adoption path would significantly boost economic growth.
“The effect on GDP would be similarly amplified, rising to 4.0 per cent over the coming decade, equivalent to adding nearly ½ percentage point of annual real GDP growth over the same time period.”
Beyond economic growth, the Fund said AI could improve government revenue collection, customs administration and public service delivery.
“AI can also increase productivity in the public sector, including domestic revenue mobilisation, customs administration, expenditure control, and service delivery—areas where even modest efficiency gains could have an important economic effect.”
The report also highlighted agriculture as one of the sectors with the greatest potential.
“In agriculture—where productivity gaps are widest—AI-enabled advisory tools… have already demonstrated double-digit yield and income gains.”
Despite the opportunities, the IMF warned that AI could widen inequality if governments fail to address structural constraints.
“Without deliberate policy action, these constraints will make adoption slow and uneven. They could also reinforce inequality, as advanced firms, skilled workers, and urban hubs benefit, whereas informal sectors, smaller firms, and lower-income populations are left behind.”
The IMF added that for Nigeria and the rest of Sub-Saharan Africa, the benefits of AI will depend largely on governments’ willingness to implement reforms that improve electricity supply, digital infrastructure, technical skills and regulatory capacity.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X