The transformative potential of AI in Africa’s industrialisation is often overlooked. Picture: Gerd Altmann/Pixbabay
By Paul Terna Gbahabo
Artificial intelligence (AI) has emerged as a significant focal point in corporate and development policy agendas in the 21st century.
Its significance has reached such heights that it influenced decisions at the 2024 Nobel Prize Selection Committee – this year the Nobel Prize in Physics was awarded to John Hopefield and Geoffrey Hinton for their groundbreaking work in AI along with the Chemistry Prize presented to John Jumper, David Baker, and Demis Hassabis for their use of AI to predict protein structures essential to biological processes.
With the 2024 Africa Industrialisation Day theme, Leveraging Artificial Intelligence and Green Industrialization to Accelerate Africa's Structural Transformation, the potential of emerging technologies such as AI and green innovations in accelerating Africa's industrialisation is underscored.
This theme advocates for robust policies that tap into AI's capabilities to fuel Africa's industrial revolution, enhancing efficiency, increasing productivity, and fostering innovation across the continent's industrial sectors.
However, the transformative potential of AI in Africa’s industrialisation is often overlooked. Just like Africa could not capitalise on past innovations to boost its industrial growth, the risk of missing out on this critical opportunity again stares Africa in the face.
At its core, AI is about machines learning from data and adapting to improve outcomes. Artificial neural networks (ANNs), inspired by the human brain, form the backbone of machine learning. These networks process vast datasets, identify patterns, and make predictions, continually refining their accuracy through techniques like backpropagation and gradient descent.
Machine learning operates on two pillars: data and algorithms. Data serves as the foundation, while algorithms—whether through supervised, unsupervised, or reinforcement learning—enable systems to learn, adapt, and optimise processes. By leveraging these capabilities, AI has the potential to revolutionise industries across Africa, much like the steam engine and electricity transformed production in earlier eras.
To avoid Africa repeating the pattern of not capitalising on transformative technologies. , African policymakers and leaders must consciously embrace AI through strategic policies and investments. With a disciplined, robust 25-year development plan, the continent can unlock AI’s potential to drive a new era of prosperity and economic growth.
The 25-year timeline is essential. Simon Kuznets, who received the 1971 Nobel Prize in Economics emphasised that structural transformation—meaning structural changes in the relative importance of different sectors, demography, and institutions within an economy —is a gradual process. This transformation often takes at least a generation to yield noticeable changes.
The role AI could play in Africa’s industrial transformation
Concerns about AI and robots replacing human jobs, leading to widespread unemployment, are valid and cannot be ignored.
At the heart of technological innovation lies the "creative destruction" principle introduced by economist Joseph Schumpeter. This principle explains how innovation can disrupt outdated industries, resulting in short-term job losses while simultaneously developing the emergence of new sectors and job opportunities. Creative destruction reflects the dynamic nature of capitalism; it reallocates resources more efficiently, encourages competition, and spurs continuous innovation. Although it can lead to temporary upheavals, Schumpeter argued that this process is essential for long-term economic vitality, enabling progress and renewal in the workforce and economy.
To mitigate these effects, African governments should:
By embracing AI with thoughtful policies and investments, Africa can transform its industries, uplift millions from poverty, and position itself as a global economic powerhouse. The journey will require collaboration, foresight, and commitment, but the rewards—a sustainable, equitable future—are well worth the effort.
Paul Terna Gbahabo is a research consultant and a PhD graduate in Development Finance at Stellenbosch Business School.
BUSINESS REPORT