(Photo: IBM)
Africa could unlock more than $100 billion in economic value annually through the full-scale deployment of generative artificial intelligence (GenAI) which will redefine operations across business sectors.
A new McKinsey report released at the African CEO Forum in Abidjan, Côte d’Ivoire, on Monday, says GenAI has the potential to generate between $61 billion and $103 billion of additional economic value on the continent. It already contributes $2,6 trillion to $4.4 trillion to the global economy annually.
The report highlights how analytical AI has become essential across several industries for performing data classification, prediction, clustering and evaluation with greater speed and efficiency than humans.
Africa is “on the brink of a revolution” as GenAI presents a transformative opportunity to accelerate its economic and technological trajectory “not just as a participant in the global economy but as a leader driving innovation”, McKinsey partner and co-author of the report Mayowa Kuyoro said.
“The continent has already shown its capacity to leapfrog traditional development pathways, from mobile payments reshaping financial systems to rapid cloud adoption,” Kuyoro said.
More than 40% of institutions on the continent have either started to experiment with GenAI or have already implemented significant solutions, according to the report. However, the continent has only scratched the surface of what is possible with both AI and GenAI, and it faces hurdles to growth.
“To fully capture the economic potential of GenAI, Africa must focus on scaling solutions tailored to its unique challenges and opportunities, while investing in critical infrastructure, talent and ecosystems. This is not just about unlocking economic value — it’s about positioning Africa as a global leader in the next wave of technological advancement,” Kuyoro said.
Sectors where GenAI development in Africa could jump ahead of other regions include banking, retail, consumer packaged goods, telecommunications, insurance, mining, heavy industry, energy and the public sector.
South African insurance industry leads the way
Already, South Africa’s insurance industry is leading the charge in the global adoption of GenAI and is often used as a reference point for developed countries in terms of penetration and innovation. The most common use is for copilots to assist employees with routine and knowledge-based tasks.
“South Africa … is pursuing wider and at-scale applications of GenAI. Emerging innovations range from voice bots and enablement in call centre and claims functions to personalised outbound sales campaigns and at-scale, hyper-personalised customer engagements through agents and direct-to-client outreach,” the report noted.
For example, one South African life insurer is combining GenAI with behavioural science to equip agents and financial advisers with personalised advice content to engage clients and drive cross-selling, retention and overall financial well-being. This represents one of the most sophisticated deployments of GenAI in insurance, globally, to date.
Life insurers typically have low customer engagement, compared with other customer-facing industries, which makes it challenging to update information and increase wallet share.
“The same insurer built a solution using developed insurers’ most common existing analytical AI models … by adding solutions mastered by teledirect insurers … to build a ‘language’ and engagement layer to generate output across different media,” the report noted.
“The trickiest part was to avoid crossing the line into automated financial advice — with the ‘agent in the loop’, this is controlled. However, checking for bias, hallucination, regulatory compliance and appropriate style was still a critical part of the development.”
Another insurer in South Africa is using GenAI to develop personalised and gamified educational content to help with self-led financial planning.
In addition, several life and nonlife insurers are using GenAI to automate, enable and standardise customer underwriting, servicing and claims operations, even in complex cases.
“African insurers are racing to improve both efficiency and customer satisfaction and GenAI can play a key role. We estimate that GenAI could unlock around $2.1 billion to $3.2 billion in economic value for African insurers, with opportunities across the value chain,” the report noted.
Other African countries that are growing and experimenting with GenAI include Ghana, Kenya, Morocco and Nigeria.
The report also highlighted challenges that need to be overcome to fully realise the potential of GenAI, including insufficient infrastructure, a shortage of skilled professionals, regulatory uncertainties and data quality issues.
African groundbreakers are demonstrating how to overcome these obstacles and scale solutions effectively with key strategies including focusing on domain-level transformation, building robust AI ecosystems and ensuring strong user adoption through targeted adoption and change management.
“Success depends on a holistic approach that aligns vision with action, addressing strategy, talent, operating models, technology, data and adoption. This is not just a technological challenge, it’s a leadership imperative,” Kuyoro said.
“African frontrunners are already proving, with the right focus and investment, we can overcome barriers and build AI capabilities that deliver real, scalable impact. The time to act is now. Africa has the talent, ingenuity and ambition to lead in the AI revolution — and the world is watching.”