Africa is experiencing a significant surge in artificial intelligence (AI) with increasing market valuations, emerging national strategies, and growing investor interest. According to SAP Africa’s 2025 report, the African AI market is anticipated to reach approximately US$4.51 billion in 2025, with projections indicating a rise to around US$16.53 billion by 2030. This represents a compound annual growth rate of roughly 27.4%. Despite this rapid expansion, Africa’s share of global AI spending remains modest, accounting for only about 1–1.5%. This disparity is rooted in complex structural factors and carries substantial implications.
Regional dynamics: Sub-Saharan Africa vs. North Africa
Investment in AI across Africa shows significant regional disparities, particularly between North Africa and Sub-Saharan Africa. North Africa encompasses the Mediterranean countries of Egypt, Morocco, Tunisia, Algeria, and Libya. Sub-Saharan Africa, stretching south of the Sahara, includes established technology centers like Nigeria, Kenya, and South Africa, as well as developing markets such as Ghana, Ethiopia, and Rwanda. These two regions present distinct environments for AI innovation and investment.
Sub-Saharan Africa leads the continent in AI funding, attracting 60–65% of total investment, driven by mobile-first fintech, a young population, rapid urbanization, and grassroots startups. North Africa secures 20–25% of AI investment, benefiting from strong European ties, robust urban infrastructure, and early digital-government initiatives. However, AI investment across Africa remains highly concentrated. In early 2025, Nigeria, Kenya, South Africa, and Egypt—the “Big Four”—received approximately 83% of AI startup funding, highlighting a growing risk of intra-continental divides despite overall expanding opportunities.
Major hubs and investment patterns
South Africa leads Sub-Saharan Africa in AI investment and development. It raised approximately US$610 million in AI ventures in 2023, attributed to its advanced data readiness, mature IT sector, reliable connectivity, and developed capital markets. Global tech firms have also made significant commitments to the country. Nigeria is another key player, primarily due to its fintech innovation and large domestic market. Kenya is establishing itself in mobile-first applications, particularly in finance and agriculture, although its investment levels are currently lower than South Africa and Nigeria.
Egypt stands out as North Africa’s leading AI hub, driven by its national AI strategies, regulatory alignment with European investors, and advantageous geographic position. These factors have significantly boosted international partnerships. Although Egypt’s AI funding is currently lower than that of top Sub-Saharan African nations, it is rapidly advancing. Notably, by the second quarter of 2025, North Africa surpassed all other African regions in venture capital deal flow for the first time in five years.
Sectoral focus: where AI is taking root
Investment in AI across Africa is experiencing rapid growth, though its distribution remains uneven. This trend reflects both regional strengths and practical demands. Fintech, for example, dominates in Sub-Saharan Africa. This is driven by high mobile penetration rates, a large unbanked population, and a wave of innovation in lending, payments, and financial inclusion. Agriculture also represents a significant area of growth, with AI tools for yield prediction, supply chain optimization, and crop monitoring becoming more accessible to smallholder farmers.
North Africa is seeing rapid AI adoption, particularly in healthcare, government technology, and smart city initiatives. Egypt exemplifies this trend with advancements in AI-driven hospital management and digital governance, often facilitated by collaborations with European tech companies. These regional and sectoral priorities highlight existing infrastructure and specific developmental objectives.
Opportunities: how Africa can leverage its strengths
While challenges persist, the opportunities in AI for Africa are substantial. Governments are increasingly prioritizing AI as a national strategic imperative. A significant stride towards harmonized investment in infrastructure, regulation, and skills development was made in 2024 with the African Union’s adoption of a continental AI strategy.
With major companies like Microsoft and Google investing in African AI through training, infrastructure, and cloud expansion initiatives, international partnerships are significantly boosting progress in the continent’s AI ecosystems. This comes amidst a surge in demand for AI-driven solutions across various sectors, including fintech, agriculture, healthcare, and logistics. A strong indicator of this growth is that approximately 85% of African businesses plan to invest in AI in the coming years, reflecting a high level of confidence in its transformative capabilities.
Beyond the "Big Four," other countries have the chance to specialize in unique AI applications that address local languages and challenges. Emerging economies like Rwanda, Ghana, and Ethiopia could form partnerships or concentrate on regional advantages instead of duplicating existing AI hubs. Greater cross-border collaboration, through shared data centers, AI training programs, and regional infrastructure, could lead to more equitable growth distribution and long-term sustainability.
Conclusion: towards a more inclusive AI future for Africa
Africa’s AI landscape presents both immense promise and significant challenges. While the continent demonstrates burgeoning innovation and considerable potential, its progress is hampered by inconsistent infrastructure, a scarcity of skilled professionals, and a concentration of investment in specific areas. The market is anticipated to expand substantially, growing from US$4.5 billion to US$16.5 billion by 2030. However, achieving sustained advancement will necessitate a strategic shift from immediate financial injections to cultivating a robust, long-term AI ecosystem.
To truly harness AI’s potential, investment must expand beyond current hubs like Lagos, Nairobi, and Cape Town, reaching emerging centers such as Kigali, Accra, Rabat, and Addis Ababa. The objective is to transition from isolated innovation hubs to interconnected regional systems, driven by African data, languages, and priorities. If Africa successfully tailors AI to its unique realities, it will not only secure a share of the global market but also redefine how AI benefits societies and economies in the Global South.
Sesona Mdlokovana
Associate at BRICS+ Consulting Group
African Specialist
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