5 Ways AI will Shape Africa’s Economic Development Trajectory
In this piece,Kotin argues artificial intelligence will be positive for Africa in 5 ways: this technology will propel growth in financial services, healthcare, skills development, logistics, and agritech.
AI will add over $32 billion in labor productivity to the U.S. by 2035. However, the World Economic Forum estimates that AI will eliminate five million net jobs worldwide by 2020; 41% of all jobs in South Africa are susceptible to automation.
Despite the coming changes, Africa is ripe for transformation.
In a region where two in three people still lack access to reliable power, new technology can stimulate unparalleled economic development. AI will be positive for Africa in 5 ways: this technology will propel growth in financial services, healthcare, skills development, logistics, and agritech.
By incorporating AI into service offerings, fintech companies can reach more customers, improve efficiency, and tailor products to the community. Africa is home to many of the world’s 2 billion unbanked people. By 2050, there will be more Nigerians than Americans, yet 47% of Nigerian adults lack access to traditional banking. But with mobile penetration at over 120% in countries like Ghana, digital financial services have taken hold in the region.
In fact, Africa is now home to 15 of the top 20 countries for mobile money. In ten years, Kenya’s M-Pesa has grown to over 30 million users and proved financial inclusion can be profitable. Platforms such as Saida in Kenya use AI to evaluate millions of loan applicants in underserved markets. Fintech is extending money management tools to poor, rural, and underbanked populations, bringing financial stability and intergenerational wealth within reach.
Digital lender Tala uses alternative data points such as phone use, social networks, and utility payments to assess and support new types of loan applicants. In addition, Tala sends positive credit reports to Kenya’s credit bureau, empowering its customers with traditional credit histories for the first time. With smartphone adoption and internet access on the rise, broader economic inclusion can finally flourish across African markets.
Adequate healthcare is a challenge across African markets: the region reports 25% of global disease cases, but has only 2-3% of the world’s doctors. Nearly one in two Africans lacks access to modern medical services - a figure expected to rise as the region’s population doubles by 2050.
Enter AI, dubbed “the stethoscope of the 21st century.” Powerful algorithms can now reduce Africa’s service gap by enabling remote diagnosis of patients. In Nigeria, for example, an app called Ubenwa can diagnose asphyxiation in newborns by sound of the child’s cry. As their accuracy improves, medtech tools have the potential to save millions of lives and protect family units.
Ghana and Zambia have piloted medical record digitization to identify patterns in data to better predict and prevent disease. If predictive technology is rolled out across the continent, it will increase the speed of diagnosis and reduce the incidence of financially-crippling emergency treatment.
Access to healthcare is tied to productivity; technologies that expands medical reach will propel economic growth in the region.
Education reform is long overdue in Africa, where the world’s 10 youngest populations still learn by rote memorization. AI can address STEAM learning needs by creating dynamic instruction and multiplying reach where teachers are scarce.
In Kenya, for example, Eneza extends quality virtual tutoring to millions of rural students. AI can also help teachers customize instruction. Bridge International Academies equip teachers in Uganda and Liberia with handheld devices that guide lessons, collect data, measure comprehension, and adapt lessons. But tech-enabled teaching is just the start: African markets must also rapidly scale digital skills as AI shapes the skills needed to manage future shifts.
Poor infrastructure raises the cost of doing business in Africa by 30-40% relative to other regions, which creates major opportunities for local logistics companies.
The self-driving vehicle technology being piloted in the U.S could transform transport and logistics systems from Addis Ababa to Abidjan. Autonomous transportation could give cities like Nairobi on-demand access to shared taxis, thereby reducing the city’s notorious traffic, increasing road safety, and improving productivity overall. Rwanda is building the first airport exclusively for drones to expand access to medical supplies.
Logistics technology will improve efficiency and lower business costs throughout African markets by reaching places paved roads and people cannot reach. Even warehouse inventory teams are becoming more productive thanks to companies like Drone Scan in South Africa. These technologies could have permanent implications for warehouse design and supply chains and breathe new life into e-commerce and other industries constrained by logistics.
The key to Africa’s economic development and food security is to boost productivity in the agriculture sector. Agriculture employs 65% of Africa’s labor force, yet farm yields are among the lowest in the world. AI can catalyze agricultural productivity by monitoring crop growth, analyzing soil quality and weather patterns, and making appropriate interventions.
In Cape Town, for example, Aerobotics’ drones work in tandem with agriculture consultants to anticipate and sidestep production issues for staple crops. Meanwhile, farmers in Kenya can receive tailored agricultural recommendations by phone thanks to UjuziKilimo’s data analytics.
With Africa’s population expected to reach 2 billion by 2050, self-improving digital tools are critical for improving food production and distribution, avoiding widespread hunger, and increasing output per person. And with more private equity in Africa expected to go to agriculture this year, AI can help turn this key sector into a more resilient, more productive economic engine for decades to come.
Africa’s policy makers and business executives should not let fear dominate the AI narrative: AI could transform the continent’s youth bulge and unemployment challenges into enormous opportunities. Indeed, AI will give African economies an advantage over the West, allowing them to build sectors with cutting-edge technology as a foundation, not an afterthought.
Timothy Kotin is a Ghanaian entrepreneur and the co-founder SuperFluid Labs, a data analytics platform based in Ghana and Kenya.
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