Africa on brink of AI-fueled economic boom as emerging applications projected to add $2.9trn by 2030

Joy Agwunobi

Africa’s economic prospects are set for a transformative boost thanks to the potential of emerging AI applications, despite its current limited contribution to the global AI market. Projections suggest that AI could add as much as $2.9 trillion to the continent’s economic output by 2030, highlighting the enormous untapped potential of this nascent technology to drive a revolution in Africa’s economic landscape and secure its position at the forefront of the global AI race.

In Nigeria, this potential is already being recognised and harnessed, particularly in critical sectors such as agriculture, energy, and climate action.

According to a recent GSMA report titled, “AI for Africa: Use Cases Delivering Impact – Nigeria Deep Dive”, the strategic deployment of AI in these areas could significantly enhance Nigeria’s socio-economic development and establish the country as a frontrunner in harnessing AI for economic growth and prosperity across Africa.

The GSMA report emphasised the game-changing potential of AI and digital technologies to revolutionize Nigeria’s agriculture sector. The report highlighted that AI and digital tools could significantly enhance resource efficiency, increase productivity, expand market access, and minimize post-harvest losses, delivering immense benefits to the country’s agribusinesses, farmers, and consumers alike.

Nigeria’s agricultural sector, a cornerstone of the country’s economy, has long faced limitations that hinder its growth and efficiency, such as inadequate market access and post-harvest losses. Nevertheless, the GSMA report emphasised that AI-driven solutions have emerged as promising tools to tackle these challenges, revolutionising the agricultural landscape in Nigeria.

The GSMA report also identified specific AI-driven platforms that are already making an impact in Nigeria’s agricultural sector. Crop2Cash’s FarmAdvice and ThriveAgric’s Agricultural Operating System were highlighted as prime examples, with their AI-powered capabilities offering personalised advice and financial services to farmers, aiding in increased productivity and reduced waste.

While these platforms offer immense potential for growth and efficiency, the report underlined significant challenges that have inhibited the broad adoption of AI in agriculture. Data scarcity, high costs, and a significant digital skills gap among smallholder farmers are among the obstacles that must be overcome to ensure that the benefits of AI are realised across the agricultural sector in Nigeria, according to the GSMA’s findings.

The energy sector in Nigeria, plagued by aging infrastructure and an over-reliance on fossil fuels, is also an area of significant untapped potential for AI applications, according to the GSMA report. While AI solutions in this sector are currently in their early stages, the report underlines the vast potential for AI to bring about improvements in energy distribution and reliability in Nigeria, unlocking new possibilities for growth and efficiency in the country’s energy industry.

The GSMA report identified two key AI-driven innovations in Nigeria’s energy sector: Beacon Power Services’ grid management platform and Husk Power Systems’ AI-enabled mini-grids. These technologies, highlighted in the report, could play a pivotal role in optimising energy usage and expanding access to underserved rural areas, driving increased efficiency and sustainability across both on-grid and off-grid systems in Nigeria. As such, these innovations hold great promise for the future of the country’s energy sector, in line with the report’s findings.

According to the GSMA report, AI also holds immense potential for energy planning, aiding in the financing of solar appliances and reducing energy poverty. By leveraging AI-driven data analysis and predictive modeling, policymakers and financial institutions can make more informed decisions, allocate resources more efficiently, and tailor financing solutions for solar appliances in a way that better meets the needs of Nigerians. In doing so, the report asserts, the potential of AI to positively impact the country’s energy sector is vast and diverse.

In light of Nigeria’s vulnerability to climate change, despite its relatively low greenhouse gas emissions, the GSMA emphasised the crucial role that AI could play in building resilience. Existing AI applications, such as Google’s flood forecasting tool and Chemotronix’s AI-enabled carbon credit platform, are pioneering examples of how AI is already contributing to greater climate resilience in Nigeria. These applications demonstrate the growing potential of AI to play a significant role in safeguarding the country against climate-related risks, as highlighted by the report.

While existing AI applications are already making significant strides in climate resilience in Nigeria, the GSMA report underscored the potential for further expansion of AI’s role in this sector. By leveraging technologies like satellite imagery for biodiversity mapping and climate modeling to forecast future impacts in highly polluted areas, Nigeria could effectively manage its natural resources and mitigate the adverse effects of climate change, according to the report. In doing so, AI would be playing an even more crucial part in protecting the country against climate-related risks, the report noted.

To fully realise the potential of AI in enhancing climate resilience and sustainable development in Nigeria, the GSMA report emphasised several key areas for action.

The report highlighted the importance of investing in local data collection, strengthening AI infrastructure, and boosting digital literacy in order to create an enabling environment for AI to be effectively deployed. These measures, according to the report, are crucial in maximising the benefits of AI for Nigeria and in securing a more sustainable and resilient future for the country.

Beyond focusing on data collection, infrastructure, and digital literacy, the GSMA report further highlighted the need for a clear policy roadmap, cross-sector collaboration, and increased local investment to create a strong and well-supported AI ecosystem that drives sustainable development in Nigeria. These policy interventions, the report argues, are essential for creating an enabling environment for AI to flourish, contributing to long-term economic, social, and environmental benefits for Nigeria.

According to Max Cuvellier Giacomelli, the head of mobile for development at the GSMA, the existing AI-driven innovations in agriculture, energy, and climate action in Nigeria are only the tip of the iceberg. By further advancing data availability, connectivity, and skills development, Nigeria can unlock the full potential of AI to drive significant socio-economic progress.