ecent advances in artificial intelligence (AI) such as the release of generative AI and ChatGPT have set business leaders across the globe scrambling to harness its benefits including in Africa. Research institutions have boasted the boost AI could give to the continent’s GDP–with some estimating an increase of up to 50% (or $1.5 trillion) by the end of the decade. But with some economists warning that the AI revolution threatens to widen wealth inequality, what does the adoption of AI mean for poverty eradication efforts in a region already beset by an immense gap between rich and poor?
AI is already making inroads in Africa. So far, more than 2,400 companies on the continent have adopted the new technologies. The majority of them (66%) are in just four countries: South Africa, Kenya, Egypt, and Nigeria. A recent State of AI in Africa Report found that these companies span several industries including health, hospitality, insurance and finance but about 34% are medium-sized enterprises with less than 100 employees and 41% are startups with less than 10 employees. Clearly, AI adoption is still nascent on the continent.
Certain characteristics nonetheless make the region particularly ripe for technological disruption: Africa is the youngest and fastest growing continent with a highly entrepreneurial and tech-savvy population. Mobile money became ubiquitous in Kenya before the rest of the world and Africans were among the first to widely adopt mobile phone access to the internet.
Yet, Africa also has the highest rate of wealth inequality. On average across African states the top 10% of each population possess 54% of national wealth while the bottom 50% hold less than 10%. What’s more, strong economic growth over the past few decades in Africa has not led to proportional poverty alleviation, given the link between high inequality and low upward mobility.
Some economists warn that AI could exacerbate this trend. In the near term, it is expected that AI will hurt middle-level, white-collar workers rather than those working lower-level jobs.
Moreover, as western companies harness automation and other tech advancements like 3D printing, fewer will offshore manufacturing to countries with lower labor costs, instead opting to move operations closer to home. This means that office and manufacturing workers in the Global South could face downward mobility as they are pushed into lower-paying jobs.
In Africa, where nearly 83% of employment remains informal, automation-induced job displacement will likely threaten the continent's burgeoning middle class while thwarting prospects of upward economic mobility for those living below the poverty level.
Thus, the extent to which Africa can reap the many benefits of AI while mitigating the risks hinges on the ability of African states and international partners to implement AI policies that complement poverty reduction strategies. Here are a few:
Laying the foundation: As decision makers seek to strengthen data collection and sharing, special attention must be placed on equity and inclusion to ensure data used to train algorithms is representative of the population. To do so, data must include diverse languages and dialects. Individuals from all segments of society including diverse ethnic groups must also be involved in the development process.
Developing home-grown AI systems: While imported AI systems from the West or East can be a supportive supplement for digital transformation in the immediate-term, African states must develop their own AI models tailored to their unique needs and goals. For example, AI models used to address health or agricultural challenges in Africa will need to be trained on different diseases and soil than in other regions.
Workforce development: AI will undoubtedly produce novel ways of working as well as new jobs to deliver unforeseen products and services. To meet the needs of this new digital economy, African education ministries must equip youth with technical and entrepreneurial skills for the jobs that don’t exist yet. Workforce development must also be extended beyond wealthier urban centers to ensure that poorer rural communities have an equal opportunity to thrive.
Leveraging AI for Social Challenges: AI has the potential to not only improve productivity in Africa but also help address those issues most critical to ending poverty such as public health, climate change, education, and financial inclusion. African governments and international partners must enable growth of companies using AI to tackle social challenges while creating incentives for companies to share AI-generated insights for the public good.
How AI will transform the world is still yet to be seen as is the way the technology itself will evolve over time. But what is certain is that Africa is at a pivotal moment in time. With the right approach, the world’s fourth industrial revolution can be the most inclusive for Africa and remedy some of the continent’s most protracted challenges.
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Promise, Potential Pitfalls of AI in Africa
Nairobi's skyskrapers as seen from the Nairobi National Park. Photo by Murad Swaleh on Unsplash.
April 12, 2023
Artificial intelligence has a lot to offer the African continent due to certain characteristics shared among most African nations, but poor mobilization of AI could exacerbate existing socio-economic disparities. APCO's Malcom Temple explores how we can maximize the good while mitigating the bad.
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ecent advances in artificial intelligence (AI) such as the release of generative AI and ChatGPT have set business leaders across the globe scrambling to harness its benefits including in Africa. Research institutions have boasted the boost AI could give to the continent’s GDP–with some estimating an increase of up to 50% (or $1.5 trillion) by the end of the decade. But with some economists warning that the AI revolution threatens to widen wealth inequality, what does the adoption of AI mean for poverty eradication efforts in a region already beset by an immense gap between rich and poor?
AI is already making inroads in Africa. So far, more than 2,400 companies on the continent have adopted the new technologies. The majority of them (66%) are in just four countries: South Africa, Kenya, Egypt, and Nigeria. A recent State of AI in Africa Report found that these companies span several industries including health, hospitality, insurance and finance but about 34% are medium-sized enterprises with less than 100 employees and 41% are startups with less than 10 employees. Clearly, AI adoption is still nascent on the continent.
Certain characteristics nonetheless make the region particularly ripe for technological disruption: Africa is the youngest and fastest growing continent with a highly entrepreneurial and tech-savvy population. Mobile money became ubiquitous in Kenya before the rest of the world and Africans were among the first to widely adopt mobile phone access to the internet.
Yet, Africa also has the highest rate of wealth inequality. On average across African states the top 10% of each population possess 54% of national wealth while the bottom 50% hold less than 10%. What’s more, strong economic growth over the past few decades in Africa has not led to proportional poverty alleviation, given the link between high inequality and low upward mobility.
Some economists warn that AI could exacerbate this trend. In the near term, it is expected that AI will hurt middle-level, white-collar workers rather than those working lower-level jobs.
Moreover, as western companies harness automation and other tech advancements like 3D printing, fewer will offshore manufacturing to countries with lower labor costs, instead opting to move operations closer to home. This means that office and manufacturing workers in the Global South could face downward mobility as they are pushed into lower-paying jobs.
In Africa, where nearly 83% of employment remains informal, automation-induced job displacement will likely threaten the continent's burgeoning middle class while thwarting prospects of upward economic mobility for those living below the poverty level.
Thus, the extent to which Africa can reap the many benefits of AI while mitigating the risks hinges on the ability of African states and international partners to implement AI policies that complement poverty reduction strategies. Here are a few:
Laying the foundation: As decision makers seek to strengthen data collection and sharing, special attention must be placed on equity and inclusion to ensure data used to train algorithms is representative of the population. To do so, data must include diverse languages and dialects. Individuals from all segments of society including diverse ethnic groups must also be involved in the development process.
Developing home-grown AI systems: While imported AI systems from the West or East can be a supportive supplement for digital transformation in the immediate-term, African states must develop their own AI models tailored to their unique needs and goals. For example, AI models used to address health or agricultural challenges in Africa will need to be trained on different diseases and soil than in other regions.
Workforce development: AI will undoubtedly produce novel ways of working as well as new jobs to deliver unforeseen products and services. To meet the needs of this new digital economy, African education ministries must equip youth with technical and entrepreneurial skills for the jobs that don’t exist yet. Workforce development must also be extended beyond wealthier urban centers to ensure that poorer rural communities have an equal opportunity to thrive.
Leveraging AI for Social Challenges: AI has the potential to not only improve productivity in Africa but also help address those issues most critical to ending poverty such as public health, climate change, education, and financial inclusion. African governments and international partners must enable growth of companies using AI to tackle social challenges while creating incentives for companies to share AI-generated insights for the public good.
How AI will transform the world is still yet to be seen as is the way the technology itself will evolve over time. But what is certain is that Africa is at a pivotal moment in time. With the right approach, the world’s fourth industrial revolution can be the most inclusive for Africa and remedy some of the continent’s most protracted challenges.
