World Bank Says Sub-Saharan Africa’s Growth Gains Require AI-Ready Foundations

By Ayo Susan

The World Bank Group’s October 2026 ‘Africa Economic Update’, titled ‘Building AI Readiness’, projects economic growth in Sub-Saharan Africa will rise from 4.1 percent in 2025 to 4.3 percent in 2026, an upward revision of 0.3 percentage points from its April forecast. Growth projections improved for nearly three-quarters of countries, including Angola, Ethiopia, Nigeria and Zambia, despite geopolitical tensions, climate shocks, declining development assistance and fiscal pressures.

The report, led by the World Bank’s Africa Region Chief Economist, Mr. Andrew Dabalen, examines how building an artificial intelligence (AI)-ready economy could translate regional growth into more jobs, higher productivity and better opportunities for the region’s expanding labour force.

DECISION HIGHLIGHT

The World Bank identifies investment in electricity, digital connectivity, computing infrastructure, skills, data and governance as essential to converting economic resilience into inclusive growth. Its central concern is that stronger output alone will not deliver sufficient employment or significantly reduce extreme poverty without productivity gains and structural transformation.

DECISION MEMO

Sub-Saharan Africa’s improved growth outlook demonstrates resilience, but the more consequential question is whether expansion can generate sufficient jobs and raise living standards. The World Bank’s assessment places artificial intelligence within this broader development challenge, presenting readiness for adoption as an economic foundation rather than merely a technology ambition.

“Despite a challenging global environment, economic activity in Sub-Saharan Africa continues to demonstrate remarkable resilience, with growth forecasts upgraded for nearly three-quarters of countries in the region, including Angola, Ethiopia, Nigeria, and Zambia. These gains reflect years of reforms and improved economic management. The next challenge is turning growth into more jobs and better opportunities. By investing in the foundations of an AI-ready economy, African countries can unlock productivity gains, spur innovation, and accelerate the structural transformation needed to raise living standards and reduce poverty,” Dabalen said.

The report attributes the improved outlook partly to stronger domestic demand, macroeconomic resilience and investment associated with the global energy transition and digital technologies. However, the recovery remains vulnerable to Middle East tensions, volatile commodity prices, climate-related disruptions and restricted fiscal space.

Inflationary pressures are also expected to return. The report projects median inflation across Sub-Saharan Africa will rise from 3.7 percent in 2025 to 5.5 percent in 2026. Meanwhile, public debt has stabilised at approximately 57 percent of gross domestic product, but elevated debt-service costs continue to constrain expenditure on infrastructure, education and health.

These pressures make productivity-enhancing investment particularly important. Yet the region faces substantial barriers to AI adoption, including inadequate electricity, limited computing capacity, connectivity gaps and shortages of digital skills. AI benefits will therefore depend on strengthening these foundations and adapting practical applications to local economic needs.

The report identifies Kenya, Nigeria and South Africa among the economies where AI activity is concentrated. This uneven adoption creates an opportunity for regional cooperation to pool infrastructure, improve data systems and reduce the costs of developing digital capabilities.

The policy implication is clear: growth, technology adoption and employment creation must be connected through deliberate investment and implementation. Without these links, stronger regional output may coexist with persistent poverty and inadequate job creation.

DATA BOX

• Regional growth: 4.1 percent in 2025; projected 4.3 percent in 2026.
• Forecast revision: Upward by 0.3 percentage points.
• Median inflation: Projected to rise from 3.7 percent to 5.5 percent.
• Public debt: Approximately 57 percent of gross domestic product.
• AI activity concentrated in: Kenya, Nigeria and South Africa.
• Principal constraints: Electricity, connectivity, computing infrastructure, skills and governance.

WHO WINS / WHO LOSES

Potential winners: Workers, businesses, technology providers and public institutions that use AI to improve productivity and service delivery.

Potential losers: Economies and communities excluded by infrastructure gaps, unaffordable connectivity and limited digital skills risk missing emerging productivity gains.

POLICY SIGNALS

Governments need to coordinate investment in reliable electricity, broadband, technical education, data infrastructure and responsible AI governance, while mobilising domestic resources and strengthening regional cooperation.

INVESTOR SIGNAL

Potential opportunities include digital infrastructure, power supply, data centres, agricultural technology and AI-enabled services. Returns will depend on reliable infrastructure, affordability, skills and effective regulation.

RISK RADAR

Geopolitical instability, rising commodity prices, climate shocks, declining development assistance and high debt-service costs could weaken growth and restrict investment. Unequal AI readiness could further concentrate economic opportunities unless access and capabilities broaden.

Ayo Susan is a journalist, covering business, infrastructure, insurance, technology, society and emerging developments with an emphasis on credible and engaging storytelling.