Africa Could Unlock Billions from AI, but Electricity Shortages Threaten Growth, IMF Warns

Artificial intelligence (AI) could become one of the biggest drivers of economic growth in Sub-Saharan Africa over the next decade, but only if the region overcomes persistent shortages of electricity, internet connectivity and digital skills, according to new research by the International Monetary Fund (IMF).

The IMF estimates that widespread AI adoption could increase the region’s economic output by about 4% over the next 10 years if governments invest in the infrastructure and policies needed to support the technology. However, without these investments and reforms, the economic gains could fall to as little as 0.2%—a difference the Fund says would have little measurable impact on growth.

The findings come as governments and global technology companies accelerate investments in African data centres, cloud computing, AI infrastructure and advanced digital networks, hoping to secure a share of the rapidly expanding global AI economy.

Despite growing enthusiasm for AI across the continent, the IMF warns that Africa’s biggest challenge is no longer access to AI tools, but building the foundations required to deploy and use them effectively at scale.

Infrastructure Gap Slowing AI Adoption

Reliable electricity and internet connectivity remain the biggest barriers to AI adoption across much of Sub-Saharan Africa.

The IMF’s AI Preparedness Index ranks the region as the least prepared in the world for widespread AI adoption, citing major weaknesses in digital infrastructure, human capital, innovation capacity and regulatory readiness.

“Policy changes will be key to whether further growth can be unlocked from AI,” said Martin Schindler, Deputy Division Chief in the IMF’s African Department and lead author of the report.

Unlike many advanced economies, where discussions around AI largely focus on job displacement, ethics and regulation, the IMF says Africa’s immediate challenge is far more basic: ensuring businesses, institutions and households have the infrastructure needed to use AI technologies.

Electricity and Internet Access Remain Critical Challenges

According to the International Energy Agency (IEA), around 600 million people in Africa still lack access to electricity, making unreliable power one of the continent’s greatest obstacles to digital transformation.

The IMF recommends targeted investments in national electricity grids, mini-grids and power infrastructure around schools, hospitals and other public institutions to create digital hubs capable of supporting AI-powered services.

Internet connectivity also remains a major constraint. Only 38% of Africans were using the internet in 2024, compared with a global average of 68%, limiting access to cloud-based AI platforms, online education, digital businesses and remote work opportunities.

The report says expanding fibre-optic networks, reducing broadband costs and promoting open-access digital infrastructure would significantly improve AI adoption across the region.

Skills Shortage and High Technology Costs

Beyond infrastructure, the IMF notes that Sub-Saharan Africa faces a shortage of AI engineers, data scientists and other highly skilled digital professionals needed to develop and deploy AI solutions.

Many businesses also struggle with the high costs of cloud computing services, advanced processors and specialised computing resources required to train and operate AI models.

The Fund argues that strengthening digital education, expanding technical training programmes and encouraging investment in research and innovation will be essential to building a competitive AI ecosystem.

The IMF concludes that while artificial intelligence presents a significant opportunity to accelerate economic growth and improve productivity across Africa, its potential will largely depend on governments’ ability to invest in reliable electricity, affordable internet, digital skills and supportive policies. Without those foundations, the region risks missing out on one of the world’s fastest-growing technological revolutions.