Artificial intelligence (AI) adoption is skyrocketing in Africa, hitting $4.5 billion this year and projected to more than triple over the next five years, a new report says.
Titled ‘Harnessing the transformative power of AI in Africa’ and published by Mastercard (NASDAQ: MA), the report projects that the AI market size on the continent will grow at a CAGR of 27.4% to hit $16.53 billion by the decade’s end.
According to Mastercard Africa President Mark Elliott, Africa’s young population gives it an edge in technology adoption.
“Home to one of the youngest populations in the world, with a median age of about 19 years, technological development assumes greater significance in Africa. The youth are among the earliest adopters and most frequent users of digital tools,” he stated.
While AI has been projected to slash millions of jobs globally, the report estimates that the technology will create 230 million new digital jobs across Sub-Saharan Africa. It’s also expected to boost financial inclusivity and enhance the growth of critical sectors like agriculture, mining, and health.
However, Mastercard believes that AI’s impact in Africa will likely favor some countries more than others. The report found a sizable variance in the preparedness of African governments to integrate the technology, with Egypt leading the region at 55.6. Only three other countries—Mauritius, South Africa, and Rwanda—scored above 50%.
The global average for emerging economies stands at 46%, while advanced economies stands at 68%.
This government preparedness could be the most defining factor in how countries harness AI, says Gabriela Ramos, the assistant director-general at UNESCO.
“Public investments in skills and infrastructure, data centers, and regulations and legislation might create incentives for companies and other actors to align on the best use of AI. I think that’s fundamental,” she said.
“…the main enabler of our economies is the government – because they produce the legal frameworks, the incentives, and the public investments necessary.”
While AI promises an economic revolution for the continent, challenges abound. The first is data; timely, relevant, and readily available data is critical to developing AI applications. Most of Africa’s data is stored outside the continent and controlled by foreign tech giants; some reports claim it’s home to a paltry 1.3% of global data storage capacity despite housing a fifth of the population.
This overreliance on foreign solutions for data storage is only going to worsen, with tech giants and foreign governments investing billions to stay in charge of the data pipelines. Italy, Japan, Canada, and the U.S. are among the governments shifting resources from traditional industries in Africa to AI. Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOGL) lead a multi-billion-dollar AI investment plan from tech giants.
Other challenges include regulatory constraints, talent shortage, insufficient local cloud storage options, and limited funding.
Still, experts interviewed for the report concurred that AI would shape Africa’s future, open new opportunities, and enhance existing industries.
Nigeria, Cape Verde launch Digital Africa Corridor
Meanwhile, Nigeria and Cape Verde have launched the Digital Africa Corridor to facilitate partnerships between the two West African nations in emerging technologies.
The initiative is spearheaded by two Nigerian tech startups—SheCode and Kryterion—and champions the development of digital technologies across the two countries. It was launched at an event in Abuja hosted by Cape Verde’s Ministry of Digital Economy, which signed an endorsement letter backing the corridor.
“With Cabo Verde, we now have proof: a government-endorsed flagship program and a mandate to expand into business cooperation,” commented SheCode’s founder, Christiana Onoja.
“This pilot corridor shows that when governments, innovators, and the private sector collaborate, the result is not talk, but programs and partnerships,” added Kryterion’s Felix Alaita.
Cape Verde is an island nation in West Africa with 500,000 residents. Despite being one of the smallest economies on the continent, its digital economy is rapidly growing. The government has set a target to digitize at least two-thirds of all public services by next year and to hit 80% by 2030.
“This endorsement is not just about Cabo Verde. It is about showing that African nations can lead their own digital future. We are proud to launch the first Digital Africa Corridor with Nigeria,” commented Cape Verde’s Secretary for Digital Economy, Pedro Lopes.
In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.
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Source: https://coingeek.com/africa-ai-market-to-hit-16-5b-by-2030-report/
