Artificial Intelligence for Economic Policymaking: The Frontier of Africa’s Economic Transformation

This report was designed to assess the viability of using artificial intelligence (AI) to inform inclusive and sustainable economic, financial and industrial policies in Africa and to help identify where traditional and non-traditional data exists and where there are gaps. It was also written with the objective of establishing the basis for future work on how to fill gaps and develop an approach for designing and implementing a research initiative based on well-designed models for economic transformation. Secondarily, it was designed to better understand the interests of national stakeholders and international development partners on this important topic. The research was conducted through a combination of desk analysis, key informant interviews and stakeholder workshops. The research addressed how AI may contribute to, or inform, policy that supports inclusive and sustainable economic transformation on issues such as productivity, employment, taxation, resource utilization, fiscal and monetary policy or economic output. There are lessons learned from regional and global experience, although this remains a frontier area of inquiry. The research also sought to understand what data exists across sectors suitable for AI solutions and what new data may be created using new tools and approaches. In developing a framework for future study, the authors have addressed opportunities that exist to experiment and scale AI applications directly in economic policy planning processes using economic transformation models. This includes a high-level assessment of how well countries are positioned to test applications and how to ensure research leads to policy impact. It also identifies prospective countries for future engagement whereby it may be possible to test and scale AI for economic policymaking approaches. Through the analysis and stakeholder consultations, the research identifies African organizations, researchers and policymakers that have an interest in using AI to inform economic policy and planning. The analysis also identifies a series of research questions to inform future analysis and prospective sandbox policy exercises. Finally, throughout the work, the authors identified risks and challenges to using AI solutions to inform economic policymaking. This work began in April 2022 and was concluded in January 2023. It was carried out by the African Center for Economic Transformation (ACET), with financial support from the Artificial Intelligence for Development (AI4D) Africa program, a partnership between International Development Research Centre (IDRC) and the Swedish International Development Cooperation Agency (Sida).