AI technology: New bullet likely to drive African economies

Artificial Intelligence (AI) has the potential to significantly boost Africa's economies in various ways, addressing challenges and unlocking new opportunities.

However, the lack of investment by the majority of African states hinders them from fully benefiting from AI technology.

Michael Kimani, chairman of the Blockchain Association of Kenya opines that “AI-driven innovation can help diversify economies by fostering the growth of technology and knowledge-based industries. Startups and entrepreneurs can leverage AI tools to create new products and services, contributing to economic diversification."

He says that while there are concerns about job displacement, the adoption of AI can also lead to the creation of new jobs in AI development, data science, and related fields.

"AI can enhance productivity in various sectors, leading to overall economic growth and increased job opportunities,” Kimani says.

He also called for a collaboration between the African states and Asian tech giant China to streamline the growth of AI in the continent.

“I believe that as a continent we need to strengthen educational programs focused on AI, machine learning, and data science at universities and technical institutions. We also need to establish research centres and encourage collaboration between academia and industry to promote cutting-edge research in AI if we are to compete globally,” Kimani adds.

China-Africa Partnership Plan

Already there is the China-Africa Partnership Plan on Digital Innovation that outlines promising areas for collaboration.

The Asian economic giant has allocated $600 billion to grow its AI industry in the African continent.

Chris Otundo, CEO of BrighterMonday Kenya, a local recruitment firm with a presence in the African continent, says that the continent needs to be strategic to reap from the AI sector.

“We should be asking ourselves what China can do for us to develop our AI industry, for instance, we can work with China in establishing innovation hubs and incubators that support AI-driven innovation and development,” adds Chris.

Otundo further states that African states need to allocate more funding toward the growth of the AI industry.

“China has a budget allocation of $600 billion for AI growth, we must be able to allocate a reasonable percentage from our budget in a bid to grow the AI industry in the African continent and there is no other way out of this because it either we get it right or forget about it,” he says.

A 2022 data from PwC Research Company reveals that by 2030 the AI industry globally will be worth $15 trillion.

The findings also show that 45 per cent of total economic gains by 2030 will come from product enhancements, stimulating consumer demand. This is because AI will drive greater product variety, with increased personalisation, attractiveness, and affordability over time.

However, the lack of a better regulatory framework is a major bottleneck for the growth of the AI industry in the African continent.

“Most African countries, including Kenya, rely on data protection laws and other ‘soft laws ‘to regulate AI. These laws often predate significant AI advancements and may not adequately address the unique risks and opportunities presented by the technology. With over 30 countries applying their regulations, navigating the legal landscape can be complex and cumbersome, potentially hindering cross-border collaboration and innovation,” Kimani says.

He further noted that the lack of specific AI regulations creates uncertainty for developers and investors, potentially slowing down growth in the industry.