AI investment gap threatens Africa's future growth

This is according to a research report by Boston Consulting Group (BCG), titled: “Advancing Africa's AI and digital economy”.

It focuses on how Africa can accelerate investment in digital infrastructure, AI capabilities and regional collaboration, to build a competitive AI-driven economy and avoid falling behind in the global AI race.

The report argues that while AI is expected to contribute $15.7 trillion to the global economy by 2030, Africa is capturing only a fraction of the opportunity because it lacks the infrastructure, skills and investment needed to compete in the emerging AI economy.

Although the continent has one of the world's youngest populations and rapidly growing digital adoption, BCG warns that Africa remains primarily a consumer of digital technologies, rather than a producer of the infrastructure, platforms and intellectual property that will underpin future economic growth.

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"Africa stands at a defining moment in the global AI revolution," says Hamid Maher, MD and senior partner at BCG and one of the report's authors.

"The continent has significant structural advantages, including a young population, growing digital adoption and the opportunity to build without legacy constraints.

“However, unless Africa invests in owning its digital infrastructure, data and AI capabilities, it risks becoming a consumer rather than a creator of the technologies that will shape future economic growth.

“The decisions taken today will determine whether Africa captures value from AI or simply imports it."

The report highlights the widening gap between Africa and the rest of the world. While digital activities account for about 15% of global GDP, Africa's digital economy contributes only 5% of the continent's GDP. At its current pace, this figure is projected to reach only 8.5% by 2050, it notes.

BCG says this slow progress comes despite encouraging developments, including Africa's position as the world's fastest-growing cloud market and strong adoption of mobile technology.

However, the continent accounts for 18% of the world's population but less than 1% of global data centre capacity. At the same time, fewer than 2% of Africa's approximately 2 000 languages are supported by large language models, limiting the relevance and accessibility of AI technologies for millions of people.

The report warns that these shortcomings are becoming increasingly significant as AI reshapes global industries. Traditional growth sectors − such as business process outsourcing, call centres and labour-intensive manufacturing − are likely to become increasingly automated, reducing opportunities that previously helped emerging economies industrialise.

“Without stronger participation in AI production, Africa risks exporting its data, while importing expensive AI services developed elsewhere, repeating historical patterns in which the continent supplied raw materials but captured little value from downstream industries,” it warns.

BCG identifies the top challenges that continue to constrain Africa's AI ambitions.

The first is economic fragmentation. “Africa's 54 economies are individually too small to justify many of the large-scale investments required for AI infrastructure, while organisations within countries often lack sufficient capital to build digital platforms independently, “it says.

The second challenge is a shortage of AI talent. According to the report, Africa has about 62 000 AI specialists, representing only around 5% of the global AI workforce. Many of these professionals work remotely for overseas employers, limiting the development of domestic AI ecosystems.

"Africa has the ambition and, crucially, the talent it needs. With focus, coordination and political will, the continent can transition from disadvantaged digital consumer to empowered digital value creator and can secure its economic future."

The third barrier is reliance on imported technology. African organisations often face higher software licensing costs than their international counterparts, while remaining dependent on foreign technology vendors, restricting innovation and limiting local value creation, the report asserts.

Patrick Dupoux, MD and senior partner at BCG, said these structural constraints are not unique to Africa, but require coordinated action.

"The challenge is not simply about adopting more digital technologies," he points out.

"It is about ensuring African institutions increasingly build, govern and own the infrastructure, data and innovation ecosystems that power AI. Countries that produce AI capabilities rather than merely consume them will capture far greater economic value and create more sustainable jobs for future generations."

Rather than focusing solely on technology adoption, the report argues that Africa must establish the foundations needed to create its own AI economy.

BCG recommends building digital public infrastructure through public-private partnerships, with digital identity systems, payment platforms and secure data exchange networks serving as core building blocks.

The report also stresses the importance of stronger data governance to ensure information can be securely shared, while remaining under African ownership and control.

Ali Ziat, MD and partner at BCG, said collaboration will be essential if Africa is to compete globally.

"No single country or organisation can build Africa's digital future alone," he said.

"Pooling investment, creating shared infrastructure and embracing open systems will make projects financially viable, while encouraging innovation across borders. Combined with strong governance and coordinated leadership, these actions can help Africa become a global AI value creator instead of remaining on the side-lines."