The International Monetary Fund (IMF) says artificial intelligence (AI) could raise Nigeria’s and sub-Saharan Africa’s economic output by up to four per cent over the next decade if governments invest more aggressively in digital infrastructure, skills development and effective governance.
The projection was contained in an IMF blog published on Tuesday, drawing from its departmental paper, Unlocking the Potential: AI in Sub-Saharan Africa, authored by Martin Schindler, Nikola Spatafora and Andrew Tiffin of the Fund’s African Department.
According to the report, AI’s economic impact on the region would remain minimal under current conditions, contributing only about 0.2 per cent to gross domestic product over the next 10 years unless countries improve their level of preparedness.
“Our research shows AI’s promise, but it also points to significant risks and challenges,” the IMF said.
It explained that while current adoption levels would have little impact on economic growth, stronger investments in digital infrastructure and broader AI adoption could significantly increase productivity.
“At current levels of preparedness, we estimate that AI will add just 0.2 percent to the region’s GDP over the next decade. 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 Fund stated.
The IMF noted that such growth would be vital for Nigeria and other African economies grappling with the challenge of creating enough quality jobs for their rapidly expanding populations.
It projected that by 2030, sub-Saharan Africa would account for nearly half of all new entrants into the global labour force, stressing that improving job quality is as important as increasing employment opportunities.
The report observed that a large proportion of workers across the region remain in informal businesses and smallholder farming, sectors characterised by low productivity.
Rather than replacing workers, the IMF said AI offers Africa its greatest value by improving productivity across critical sectors of the economy.
“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 lag behind the rest of the world.
“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 cautioned.
The IMF highlighted Nigeria as one of the countries already exploring practical AI applications with measurable benefits.
It pointed to pilot programmes where Nigerian teachers used AI-powered chatbots to improve mathematics learning, saying the initiative delivered significant learning gains.
The report also referenced trials in Nigeria, Ghana, Rwanda and Uganda, which showed that digital agricultural advisory services could improve crop yields when paired with better farming practices and inputs.
According to the Fund, agriculture represents one of Africa’s biggest opportunities for AI because of the sector’s importance to employment and its significant 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 noted.
Beyond agriculture, the IMF said AI could strengthen education, healthcare and public revenue collection.
It explained that AI can support healthcare professionals through improved patient triage, diagnosis and follow-up care without replacing medical personnel.
The report also noted that countries such as Kenya and South Africa are already using AI-driven data analytics to improve tax compliance and boost government revenue.
According to the IMF, Africa has previously demonstrated its ability to leapfrog technological barriers through innovations such as mobile money and could achieve similar success with AI if the technology is made affordable, practical and trusted.
To unlock AI’s economic potential, the Fund identified two key priorities for governments.
The first is investing in the infrastructure needed for widespread AI adoption, including reliable electricity, affordable broadband, data infrastructure and digital skills development.
“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 where viable, and strengthening digital and AI literacy through education and training,” the report stated.
The IMF added that African countries do not necessarily need to develop cutting-edge AI models but should instead focus on adopting, adapting and deploying existing technologies effectively.
The second priority, it said, is establishing appropriate regulations and strengthening regional cooperation to build public trust and encourage responsible AI adoption across the continent.
