Artificial intelligence (AI) could create 4.5 million new jobs in South Africa and even millions more in Africa. But first, the continent must create AI laws and policies that allow the technology to thrive in an environment that is catalytic to its advancement, according to a new report by research and advisory firm Caribou Digital and the Mastercard Foundation.
Africa currently lacks the fundamental structure to lead local AI development. The continent needs an economic game-changer—and AI’s ability to create new industries positions it as that. Yet, the lack of a deep understanding of AI and its impact on the economy, which holds the key to youth employment on the continent, is becoming a fringe problem.
Africa risks missing out on AI-driven growth due to a lack of understanding of the technology’s potential and economic implications. AI could be a key driver of youth employment, yet many governments have not developed policies that foster innovation while addressing AI’s risks. Existing policies are either too restrictive or too lax, preventing progress in AI development. Governments must collaborate with sector-specific researchers and practitioners to develop practical, forward-thinking AI frameworks.
The gap between government policy and AI development is a recurring issue. As co-founder of the data science training platform Zindi, Megan Yates explains, “What often happens is governments not calling in practitioners and people that actually do stuff. When governments don’t organise and work with practitioners, there’s a risk that the emerging policies are just unworkable and would stifle innovation.”
While a few African countries have made strides in AI policy—Mauritius became the first to publish a national AI policy in 2018, followed by Algeria, Benin, Ghana, and Senegal—most nations still lack a formal framework for AI development. Despite this, several countries are taking steps toward creating AI laws, and others have established expert bodies to guide policy development. However, AI innovation clusters—vital to the region’s economic growth and youth employment—continue to operate without cohesive government support or coordination.
In the report titled, “The Role of AI Innovation Clusters in Fostering Youth Employment in Africa,” Caribou’s study highlights these AI innovation clusters as governments and policy-makers, academia, investors, Big Tech companies, human capital, and grassroots communities.
Academia is crucial for AI development in Africa. Limited institutions are offering AI curricula across Africa and face a shortage of staff, trainers, and researchers to move the technology forward.
“We’re looking at developing programs that are practical, moving away from just theory capacity building. I advocate for this because we need more practical skills within these students than just theory,” said Dr. Deji Ajani, Chief Digital Officer at Leads Innovation Limited.
Another major challenge to AI development in Africa is insufficient infrastructure. AI models require substantial computing power, yet most African countries depend on international cloud services. Although local data centers are growing, energy shortages, high operational costs, and inadequate internet connectivity continue to limit their capacity.
As Ojoma Ochai, Managing Director of Co-creation Hub in Nigeria, points out, “There are no GPUs—not that many GPUs. So, the compute capability to build large-scale AI startups is not ubiquitous on the continent.” This gap in infrastructure means that only a small percentage of Africa’s AI talent has access to the resources needed to build and scale advanced models.
While investors, Big Tech, and donor-led organisations have led infrastructure and talent development across different African regions, the continent will keep battling the same problems without the collaboration of all six players.
With a market size of $3.7 billion and a 28.34% compound annual growth rate (CAGR), AI shows a firm promise that is there for the taking.
Governments must be catalysts for AI innovation, collaborating with researchers to formulate stronger policies. Local investment into AI already shows promise. Having funneled $1.2 billion into deep tech in 2023, investors need to create more funding opportunities for innovators.
To fully harness the economic potential of AI, Africa needs coordinated efforts from governments, academia, the private sector, and international organizations. As the report emphasises, without collaboration between these stakeholders, the continent will continue to face the same barriers to AI innovation.
The time for action is now—only by building the right infrastructure, policies, and educational frameworks will Africa be able to unlock the transformative power of AI for its economy and youth.
