Keypoints:
- UNECA urges borrowing to fund AI infrastructure
- Africa hosts under 1 percent of global data centres
- AI seen as pathway to industrialisation and value addition
AFRICAN governments should borrow billions and mobilise domestic capital to finance critical infrastructure needed for artificial intelligence, according to a new report titled Economic Report on Africa 2025: Advancing Digital Transformation for Inclusive Growth by the United Nations Economic Commission for Africa (UNECA), presented at the Conference of African Ministers of Finance, Planning and Economic Development in Morocco.
A narrow window to capture the AI moment
The report warns that Africa risks missing a major technology-driven economic shift unless it urgently expands its digital and energy infrastructure.
Across Africa’s 54 countries, UNECA says the stakes are high: failure to invest now could leave economies on the margins of a global transition increasingly shaped by data, automation and frontier technologies.
Borrowing to fund AI shift
At the centre of the report is a clear recommendation that governments expand financing options, including borrowing, to accelerate infrastructure development.
Strategic debt, UNECA argues, can support the rollout of data centres, digital networks and energy systems required for AI adoption. Governments are also urged to strengthen domestic revenue mobilisation, deepen capital markets and tap institutional pools such as pension funds and sovereign wealth funds.
‘Public budgets alone will not suffice,’ the report states, calling for blended finance models that combine public and private investment.
Efforts to scale digital infrastructure align with broader trends highlighted in Africa’s digital economy expansion, where investment gaps—running into tens of billions of dollars—continue to constrain growth.
Africa’s data centre deficit
Despite rising digital demand, Africa accounts for less than 1 percent of global data centre capacity, the report notes.
This shortfall limits the continent’s ability to store, process and govern its own data, raising concerns about competitiveness and digital sovereignty.
Without local infrastructure, African economies remain dependent on external systems, restricting the development of domestic AI industries.
Energy and AI: a twin challenge
UNECA highlights the close link between digital infrastructure and energy supply. Data centres and AI systems require reliable electricity, while growing digital demand can help justify investment in power generation.
‘Strategic investments in data infrastructure and energy generation can reinforce each other,’ the report states.
This dual challenge reflects wider constraints outlined in Africa’s power sector financing gap, where unreliable electricity continues to limit industrial expansion.
AfCFTA and skills push
Beyond infrastructure, the report calls for increased investment in skills development to prepare African workers for AI-driven industries.
UNECA also emphasises the need to fully implement the African Continental Free Trade Area (AfCFTA), which could support cross-border digital markets and scale innovation across the continent.
A more integrated market would strengthen competitiveness, reinforcing arguments made in AfCFTA trade integration efforts.
From minerals to manufacturing
The report argues that AI adoption could help Africa move beyond exporting raw materials toward producing higher-value goods.
The continent holds significant reserves of critical minerals—used in batteries, processors and other advanced technologies—but most are still exported in raw form, limiting economic returns.
By investing in digital technologies and manufacturing capacity, African countries could capture more value domestically, a shift already under discussion in Africa’s critical minerals strategy.
‘Competitiveness increasingly depends on a country’s capacity to generate, govern, and apply data and frontier technologies,’ the report states.
A decisive policy moment
UNECA concludes that Africa faces a pivotal policy moment. Strategic borrowing, combined with stronger domestic revenue systems and institutional investment, could position the continent to benefit from AI-led growth.
However, without decisive action, Africa risks being left behind as global economic power increasingly depends on data, technology and infrastructure.
