A new report by research and advisory firm Caribou Digital and the Mastercard Foundation suggests that artificial intelligence (AI) could create 4.5 million new jobs in South Africa and millions more across Africa. However, the continent must first develop AI laws and policies that allow the technology to thrive in an environment that is catalytic to its advancement.

The report, titled "The Role of AI Innovation Clusters in Fostering Youth Employment in Africa," highlights the potential of AI to create new industries and drive economic growth in Africa. However, it notes that the lack of a deep understanding of AI and its impact on the economy is a major obstacle to realizing this potential. Many governments in Africa have not developed policies that foster innovation while addressing the risks associated with AI, and existing policies are often either too restrictive or too lax, preventing progress in AI development.

According to Megan Yates, co-founder of the data science training platform Zindi, the gap between government policy and AI development is a recurring issue. "What often happens is governments not calling in practitioners and people that actually do stuff. When governments don't organize and work with practitioners, there's a risk that the emerging policies are just unworkable and would stifle innovation," she said.

While a few African countries, such as Mauritius, Algeria, Benin, Ghana, and Senegal, have made strides in AI policy, most nations still lack a formal framework for AI development. The report emphasizes the need for a continent-wide strategy to support AI innovation, noting that innovation clusters – vital to the region's economic growth and youth employment – continue to operate without cohesive government support or coordination.

Academia is also crucial for AI development in Africa, but limited institutions are offering AI curricula across Africa, and there is a shortage of staff, trainers, and researchers to move the technology forward. Dr. Deji Ajani, Chief Digital Officer at Leads Innovation Limited, emphasized the need for practical skills training, saying, "We're looking at developing programs that are practical, moving away from just theory capacity building. I advocate for this because we need more practical skills within these students than just theory."

Insufficient infrastructure is another major challenge to AI development in Africa. AI models require substantial computing power, yet most African countries depend on international cloud services. Although local data centers are growing, energy shortages, high operational costs, and inadequate internet connectivity continue to limit their capacity. Ojoma Ochai, Managing Director of Co-creation Hub in Nigeria, noted, "There are no GPUs – not that many GPUs. So, the compute capability to build large-scale AI startups is not ubiquitous on the continent."

The report emphasizes that governments must be catalysts for AI innovation, collaborating with researchers to formulate stronger policies. Local investment into AI already shows promise, with investors funneling $1.2 billion into deep tech in 2023. However, more funding opportunities are needed to support innovators. The report concludes that coordinated efforts from governments, academia, the private sector, and international organizations are necessary to fully harness the economic potential of AI in Africa.

With a market size of $3.7 billion and a 28.34% compound annual growth rate (CAGR), AI shows a firm promise that is there for the taking. The time for action is now – only by building the right infrastructure, policies, and educational frameworks will Africa be able to unlock the transformative power of AI for its economy and youth.