Joy Agwunobi
Africa’s artificial intelligence (AI) industry is set for rapid expansion, with its market value projected to more than quadruple over the next five years. According to a new Mastercard whitepaper, the market will grow from $4.5 billion in 2025 to $16.5 billion by 2030, reflecting a compound annual growth rate (CAGR) of 27.4 percent.
The report, Harnessing the Transformative Power of AI in Africa, attributes this growth to the continent’s rapidly evolving digital ecosystem, fueled largely by the widespread adoption of mobile technologies that are laying the groundwork for large-scale AI integration.
It highlights that if implemented responsibly and inclusively, AI could reshape critical industries such as agriculture, healthcare, energy, finance, education, and urban development, while at the same time advancing digital inclusion and creating millions of jobs. Mastercard estimates that Sub-Saharan Africa alone could generate up to 230 million digital jobs by 2030 if enabling conditions including talent development, infrastructure, and clear regulatory frameworks are strengthened.
“Technological disruption defines the world we live in today and Africa is positioned at a unique crossroads,” the report stated. “With the world’s youngest population, a vibrant entrepreneurial spirit, and an expanding digital economy, AI holds the promise of reshaping industries while addressing urgent social challenges.”
Regional and national progress
The whitepaper notes that countries such as South Africa, Nigeria, Egypt, Rwanda, Mauritius, and Kenya are already advancing AI policy by establishing national strategies and regulatory frameworks for ethical deployment. At the continental level, the African Union has rolled out an AI strategy and the Declaration on Responsible AI in Africa, prioritising responsible adoption.
Among the countries spotlighted in the report, South Africa stands out as a continental leader, having attracted $610 million in AI-focused venture capital in 2023, with total investments expected to reach $3.7 billion by 2030. The country boasts the highest level of data and infrastructure readiness on the continent and hosts the Artificial Intelligence Institute of South Africa, which serves as a hub for world-class education, research, and industry development. National plans also aim to establish up to 300 AI startups and train 5,000 professionals by the end of the decade, laying the foundation for a vibrant, homegrown AI ecosystem.
Nigeria follows closely as one of the most dynamic AI ecosystems in Africa, ranking second in the number of AI startups and attracting $218 million in venture funding in 2023. The country’s applications of AI are wide-ranging, from personalized learning platforms such as Rising Academies, to microfinance solutions offered by Kudi.ai, and governance tools that enhance transparency in public fund allocation. With its AI market projected to reach $1.4 billion by 2025, Nigeria’s growth reflects a blend of proactive government initiatives and strong private-sector innovation.
Kenya, often described as Africa’s “Silicon Savannah,” has also emerged as a key player in AI development. It has applied the technology across diverse sectors, with platforms like Tala using mobile data for credit scoring, while Jacaranda Health’s UlizaLlama chatbot provides maternal health support in five local languages. The launch of Kenya’s National AI Strategy (2025–2030) further underscores the government’s ambition to position the country as a regional hub for AI research, development, and commercialization in pursuit of broader socio-economic transformation.
In North Africa, Morocco is positioning itself as a rising hub for AI adoption, advancing the use of the technology in healthcare, agriculture, energy, and finance. Academic and research institutions such as Mohammed VI Polytechnic University, alongside innovators like DeepEcho, are fueling this progress. The annual MoroccoAI Conference has become a focal point for shaping the country’s national AI dialogue, while its Digital 2030 strategy sets ambitious goals to attract $1.1 billion in investments and create 240,000 digital jobs. Despite this progress, the report warns that Morocco, like other parts of Africa, must guard against risks such as data fragmentation, language exclusion, and regulatory inconsistency, which could deepen the digital divide.
Despite the continent’s progress, the report also underscored that Africa remains a complex landscape where AI adoption faces critical hurdles. Challenges around infrastructure, talent, and contextual adaptation continue to slow down growth. While adoption is vital, the process must remain inclusive—ensuring that AI solutions are not simply imported but are tailored to the realities of African businesses, governments, and communities.
One of the most pressing issues is data. The report identified limited access to accurate, timely, and locally relevant data as a key barrier to building effective AI systems. Africa’s data ecosystems are still at a nascent stage, with much of the advancement driven by private-sector efforts. Many existing models depend heavily on imported algorithms trained on foreign datasets, which often fail to capture the unique demographic, cultural, and economic realities of African societies. This misalignment, the report warns, risks reinforcing inequalities and deepening socio-economic divides.
The study further explained that as the volume of data generated globally grows exponentially, the ability to model data at the terabit level will be decisive for Africa’s AI transformation. Emerging digital ecosystems across finance, healthcare, and agriculture already produce vast amounts of information, but without advanced techniques such as distributed computing frameworks, parallel processing algorithms, and machine learning integration—this potential remains underutilised.
According to the report, Applications such as real-time fraud detection in banking, predictive analytics in agriculture, and early-warning systems for disease outbreaks all hinge on strengthening these capabilities. Federated learning, the report added, offers particular promise in Africa, as it enables decentralised processing while safeguarding sensitive data, especially in sectors like healthcare.
Infrastructure also plays a defining role. The expansion of cloud computing and improved internet connectivity are creating a foundation for data-driven economies, offering scalable and cost-effective alternatives to expensive on-premises systems. Demand for cloud services is rising by 25 to 30 percent annually—faster than in Europe or North America. The report cautions that Africa’s data center capacity remains underdeveloped, with over two-thirds located in South Africa, while Egypt, Nigeria, Kenya, and Morocco account for much of the rest, leaving many countries underserved.
Another challenge lies in ensuring that AI truly reflects Africa’s diversity. The report highlighted the rapid rise of natural language processing (NLP) and large language models (LLMs), which are making conversational AI more accessible by lowering the reliance on specialised coding or data science skills. However, the limited representation of African languages in these systems risks excluding millions of speakers.
With between 1,000 and 2,000 languages spoken across the continent, the report described this gap not only as a challenge but also as an opportunity for local innovators to build inclusive AI systems rooted in Africa’s linguistic and cultural realities.
The issue of skilled manpower remains one of the most pressing challenges for Africa’s AI ambitions. The report emphasised that sustaining a vibrant ecosystem depends on the availability of professionals such as data scientists, machine learning engineers, and domain experts who can translate insights into practical solutions. Yet, the continent faces a significant talent gap, worsened by brain drain as many trained specialists leave for more developed markets.
“Only a small number of universities currently offer dedicated AI programmes, leaving the majority of students without access to critical technical training. This skills shortage is further compounded by limited access to advanced computational resources—such as GPUs and high-capacity cloud platforms—restricting the ability of local researchers and innovators to carry out cutting-edge development,”the report said.
Looking ahead, the report underscored Africa’s demographic trajectory, with the population projected to increase by 800 million by 2050, describing it as both a daunting challenge and a powerful opportunity. It stressed that artificial intelligence will play a pivotal role in scaling production, meeting the demands of a rapidly expanding consumer base, and generating employment.
However, the outcome will hinge on the continent’s ability to develop AI systems tailored to Africa’s needs—designed by African innovators and anchored by policies that capture its unique realities. Only under these conditions, the report argued, can African nations evolve from consumers of imported technologies into creators and shapers within a global tech ecosystem increasingly defined by artificial intelligence.
