AI could add 4% to Nigeria, sub-Saharan Africa’s GDP, says IMF

Artificial intelligence holds the potential to significantly increase economic output in Nigeria and across sub-Saharan Africa, potentially adding as much as 4% to the region's GDP over the next decade. This optimistic outlook, detailed in a blog by the International Monetary Fund (IMF), hinges on governments accelerating investments in crucial areas like digital infrastructure, skills development, and robust governance frameworks.

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Our research shows AI’s promise, but it also points to significant risks and challenges.

The IMF's research indicates that without substantial improvements in preparedness, AI's contribution to the region's economy would remain minimal, adding only about 0.2% to GDP over the next ten years. This negligible impact, described as "little more than a rounding error," highlights the critical need for foundational changes to unlock AI's transformative power. The report, authored by Martin Schindler, Nikola Spatafora, and Andrew Tiffin of the Fund’s African Department, emphasizes that the gains could rise to nearly half a percentage point of additional growth annually if the right conditions are met.

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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.

Such economic growth is particularly vital for Nigeria and other African nations grappling with the challenge of creating jobs for a rapidly expanding youth population. By 2030, sub-Saharan Africa is projected to account for nearly half of new entrants into the global labor force. The IMF stresses that the focus should not solely be on the quantity of jobs but also on their quality, noting that many workers are currently employed in low-productivity sectors like informal microenterprises or smallholder agriculture.

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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 IMF argues that AI's primary value in Africa lies in boosting productivity across key sectors rather than replacing workers. It could help informal firms manage inventory, enable farmers to increase crop yields, and support mid-sized companies in transitioning to formal operations and export readiness. However, the Fund warns that Africa risks falling further behind if AI adoption continues to lag behind other global regions, potentially widening the existing productivity gap.

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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.