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African Business Leaders Embrace AI, Yet Lag Global Adoption Rates - Report

Monday, 01 July 2024 14:54
African Business Leaders Embrace AI, Yet Lag Global Adoption Rates - Report

(Ecofin Agency) - The report highlights that more than half of African business leaders expect emerging technologies to significantly impact how their company creates, delivers, and captures value in the future.

Fewer businesses in SSA have integrated generative AI compared to global counterparts, according to a report published on May 30 by audit and consulting firm PricewaterhouseCoopers (PwC).

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The report is based on a survey of 380 business leaders operating in the region as part of the "Global CEO Survey 2024" conducted in 105 countries around the world. The results showed that 27% of African bosses surveyed said their company has already adopted generative AI compared with a global average of 32%.

This adoption rate is likely to increase in the future, however, given that 51% of African executives expect generative AI to increase competitive intensity in their industry over the next three years, driving the market entry of new players, the emergence of innovative products and the emergence of new pricing approaches.

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Similarly, 61% of respondents believed that generative AI will significantly alter the way their business creates, delivers and captures value over the next three years, while 51% predict that this disruptive technology will improve the quality of products and services offered to consumers.

33% of African business leaders said they have already modified their technology transformation strategy, due to this profoundly transformative technology, a rate slightly higher than the global average of 31%. All the more so as generative AI is set to revolutionize all sectors. In financial services, for example, its main interests lie in improving fraud detection, enhancing risk assessment and personalizing customer interactions, thereby increasing efficiency and promoting cost reduction.

The healthcare sector is set to benefit from AI-assisted early disease detection, personalized treatment planning and new drug discovery.

Retail players also benefit from the technology through personalized product recommendations, price optimization and improved customer service, while manufacturing and logistics sectors can use generative AI to optimize supply chains, predict demand and improve production efficiency.

Increased investment in cloud computing

Entitled "Africa Business Agenda-Tech-enabled digital transformation", the report revealed that African bosses perceive significant risks associated with generative AI, due to the technology's current limitations such as hallucinations (incorrect or misleading results generated by large language models) and lack of coherent logical reasoning. Indeed, 48% of them recognize that generative AI can increase legal liabilities and reputational risk, compared with 46% worldwide. Hence the need to adopt stronger data governance frameworks and involve employees in the technology integration process.

On the other hand, 21% of executives surveyed expect downsizing due to the growing adoption of this technology, which is viewed with some apprehension by workers, compared with 25% worldwide.

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On another level, the report indicated that the adoption of cloud computing by companies operating in sub-Saharan Africa is greater than that of generative AI. 12% of executives surveyed say they have adopted this technology in all operations, while 38% claim to have adopted it in many parts of their business. 32% have adopted the cloud in some operations, and 19% are not yet using this type of solution.

Because of the benefits of cloud computing for businesses, 82% of respondents claim to have increased their investments in this area by 2023.

More generally, more than half of the African business leaders (52%) covered by the survey expect emerging technologies to have a significant impact on the way their company creates, delivers and captures value in the future, which is higher than the global average (46%).

The report also noted that 40% of executives believe that their company would not be economically viable within a decade if it remained on its current trajectory of transformation. This rate rises to 57% over a time horizon of more than ten years, underlining the need to accelerate the reinvention of business models for companies operating south of the Sahara.



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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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