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Sub-Saharan Africa stands at a crossroads. By 2030, the region is projected to be home to 90% of the world's extreme poor and whether AI becomes a tool for transformation or a driver of deeper inequality may determine the trajectory of millions of lives. AI carries dual potential: it can make public services more equitable and accessible, while also amplifying misinformation and enabling identity-based violence. Without deliberate intervention, the risk is a future where AI automates poverty rather than solving it entrenching algorithmic inequality and creating new forms of exclusion that are invisible to policymakers. The benefits of AI must not accrue only to those with the infrastructure and digital fluency to access them. The choices made today will shape whether AI lifts the region's most vulnerable communities or leaves them further behind. To help close these critical knowledge gaps, the International Development Research Centre (IDRC) and the UK’s Foreign, Commonwealth and Development Office (FCDO), through the Artificial Intelligence for Development (AI4D) programme, have launched a research initiative to generate actionable, locally grounded evidence. Supported by diagnostic research from Genesis Analytics, the initiative advances a focused research agenda across four thematic areas. Poverty and inequality the focus of this brief is one of these priority areas, aimed at strengthening evidence and empowering African researchers to inform policies that shape the continent’s role in the global AI economy.

The global AI economy is projected to contribute up to $15.7 trillion to global GDP by 2030. Yet 85% of these gains are expected to flow to North America, China, and Europe leaving Africa and other regions to share a fraction of the benefits. The current global AI architecture risks entrenching a model of AI Colonialism, where Africa serves as a source of raw data and a consumer of finished AI products, while wealth generation remains elsewhere. Global technology firms harvest data from African users to train models that are sold back to African governments and businesses as licensed services mirroring historical patterns of extracting raw commodities while importing finished goods. The consequences are stark: permanent trade deficits in the digital economy, loss of agency through reliance on algorithms trained on Western norms, and wealth generated by African data flowing to Silicon Valley or Shenzhen rather than Nairobi, Lagos, or Johannesburg. This trajectory is not inevitable but it is the default if we do not intervene. To help address these critical knowledge gaps, the Artificial Intelligence for Development (AI4D) programme supported by the International Development Research Centre (IDRC) and the UK’s Foreign, Commonwealth and Development Office (FCDO) has launched a research initiative to generate actionable, locally grounded evidence, with diagnostic support from Genesis Analytics. This policy brief forms part of a broader research agenda examining four thematic areas, including global inequality and AI colonialism, with the aim of equipping African researchers and policymakers with the insights needed to shape the continent’s role in the global AI economy.

Africa stands at a critical economic crossroads. While growth is projected to accelerate to 4% by 2026, structural challenges including declining Official Development Assistance, commodity dependence, and low industrial bases underscore the urgency for sustainable productivity gains. Artificial Intelligence presents a significant opportunity to address this challenge. With the capacity to drive efficiency across sectors, AI adoption could inject $2.9 trillion into African economies by 2030, equivalent to a 3% annual increase in GDP. For Africa, harnessing AI is an economic imperative. To address these critical knowledge gaps, the International Development Research Centre (IDRC) and the UK’s Foreign, Commonwealth and Development Office (FCDO), through the Artificial Intelligence for Development (AI4D) programme, have launched a research initiative to generate actionable, locally grounded evidence on AI’s economic impact. Supported by diagnostic research from Genesis Analytics, the initiative focuses on four thematic areas. This brief examines productivity and economic transformation, highlighting the evidence needed to guide Africa’s position in the emerging AI-driven global economy.

Artificial Intelligence is reshaping the global division of labour and Africa has the most at stake. By 2050, the continent's working-age population will double to 1.6 billion, representing an extraordinary demographic dividend. But this potential can only be realised if there is meaningful work for young people. Today, 72 million youth are already classified as Not in Employment, Education or Training (NEET), and millions of new jobs must be created annually just to keep pace. AI could inject $2.9 trillion into African economies but it also threatens to disrupt the very entry points through which young people access the workforce. From automating routine clerical and analytical tasks to destabilising key sectors like Business Process Outsourcing, AI risks narrowing the pathways that have historically absorbed young workers. For the 85% of Africans in the informal economy, the stakes are even higher, as AI-driven platforms introduce new forms of algorithmic management that could deepen economic precarity. The question is not whether AI will transform Africa's labour market, it will. The question is who shapes that transformation, and in whose interest. To help close these critical knowledge gaps, the International Development Research Centre (IDRC) and the UK’s Foreign, Commonwealth and Development Office (FCDO), through the Artificial Intelligence for Development (AI4D) programme, have launched a research initiative to generate actionable, locally grounded evidence, supported by diagnostic research from Genesis Analytics. This first policy brief, focused on productivity and economic transformation, introduces one of four thematic research areas designed to inform policies and strategies that position Africa more equitably within the global AI economy.