Sub-Saharan Africa could increase its economic output by about 4 per cent over the next decade through artificial intelligence, according to a new paper by the International Monetary Fund.

However, the IMF warned that the region can only realise this potential if it urgently addresses critical gaps in electricity access, internet connectivity and digital skills.

The Deputy Division Chief and Mission Chief in the International Monetary Fund’s African Department and lead author of the paper, Martin Schindler, said the scale of the opportunity and risks for the region made immediate policy action an urgent priority rather than a long-term consideration, Reuters reported.

“Policy changes will be key to whether further growth can be unlocked from AI,” Schindler told Reuters, warning that without decisive action many sub-Saharan African countries could see productivity and growth gains of just 0.2% over the next decade.

“Frankly, that’s a rounding error,” he added.

He said that failing to act would effectively leave the region on the sidelines of one of the most significant economic transformations of the modern era.

The paper warned that the central risk facing Sub-Saharan Africa is not technological disruption itself, but the region’s slow pace of AI adoption.

“For Sub-Saharan Africa, the central concern is not the risk of technological disruption, but whether countries will be able to adopt, adapt, and scale AI quickly enough to capture its benefits and avoid falling further behind,” the paper stated.

Co-author Andrew Tiffin said electricity is the foundational constraint on which all other reforms depend.

“It’s hard to have anything without electricity,” he said.

He noted that the emergence of AI had added a new dimension to Africa’s longstanding electricity access challenge, as data centres could also become bankable investment projects capable of accelerating electrification efforts.

The IMF paper identified specific infrastructure gaps hindering AI adoption and outlined targeted interventions to help bridge them.

About half of Sub-Saharan Africa’s population lacks reliable access to electricity. To address the gap, the report recommended targeted investments in national grids and mini-grids around schools, clinics and other public facilities, creating local digital hubs that could support AI adoption at the community level.

Internet connectivity is another major constraint, with only 38 per cent of Africans using the internet in 2024, compared with 68 per cent globally.

The paper said increased investment in fibre-optic backbones and open-access networks could help lower costs and significantly expand internet access.