AI could contribute $1.5 trillion to Africa’s economy by 2030 if the continent secures 10% of the global AI market, according to SAP, which sourced the statistic from online media. However, a shortage of AI talent, with the need to retain cyber security and cloud skills, threatens to block opportunities to monetise growth.
This is part of a report released by SAP: ‘Africa’s AI Skills Readiness Revealed’, which reveals that African organisations are rushing to enhance their traditional IT skills base in the wake of accelerating adoption of AI.
The report adds that while 94% of organisations offer monthly AI training, none currently allocate more than 10% of their HR or IT budgets to skills development, a sharp decline from 2022.
Genevieve Koolen, HR director at SAP Africa, said: “There is a near-universal need for AI-related skills among African companies this year. Since traditional IT skills such as cloud and cyber security related competencies remain in high demand, companies now face the dual challenge of attracting and retaining traditional tech talent while also building greater AI competencies within their businesses. It is unsurprising then that most African organisations provide career development opportunities for employees with AI specialisations.”
The report reveals that all companies surveyed expect the demand for AI skills to increase in 2025. Nearly half said they expect a ‘significant’ increase.
Koolen added that while there is an urgent need for policymakers and education institutions to fast-track AI skills development initiatives among Africa’s swelling youth population, companies also face pressure to equip existing workers with future-ready skills.
“Thirty-eight percent of companies surveyed said reskilling of employees is a top skills-related challenge for them in 2025, and nearly half said the same of upskilling. The impact of these changes creates its own challenges, as evidenced by the two-thirds of companies that said helping employees understand why reskilling is necessary is a top priority.”
Research also showed that African organisations are alive to the possibilities presented by AI-related innovation, with companies citing perceived value in improved decision-making (64%), marketing capabilities (51%) and innovation (47%) enabled by AI.
However, poor access to AI-ready skills is already causing negative impacts among the same companies, including failed innovation initiatives, delays completing projects, greater pressure on teams and an inability to take on new client projects.
“Organisations are rising to this challenge by increasing the frequency of training offered to employees, with 94% saying they offer training at least monthly,” said Koolen.
However, the latest data indicates a drop in the allocated budget for skills development.
In a previous survey conducted in 2022, a quarter of organisations said they spend more than 15% of their HR or IT budgets on skills development and training. This year, not a single organisation that formed part of the research spent more than 10%.
SAP lists several measures that companies can implement to ensure they cultivate the correct skills mix:
Be prepared: With universal demand for tech and AI-related skills and an ongoing skills scarcity, African organisations must prepare for a shortfall in critical AI-related skills this year.
“The moment calls for a pragmatic approach that combines longer-term skills development – including reskilling and upskilling – with short-term measures that alleviate some of the immediate pressures and creates space for more robust skills development initiatives. Organisations also need to take care to support employees through this uncertain period, for example, by using human capital management technologies that help HR teams identify concerns.”
Prioritise training: Koolen said it is surprising that budget allocations for training and skills development appear to be shrinking. “Too many digital transformation and innovation initiatives fail to deliver the expected business value due to a lack of appropriate skills. In light of the rapid pace of technological advancement, any organisation that fails to invest in skills will likely find they are unprepared and unable to leverage new innovations. In time, this will erode their competitiveness and lead to significant impacts to the bottom line.”
Instead, organisations should place skills development at the core of their business strategies to ensure a steady stream of work-ready talent and invest sufficient budget to guarantee high-quality outcomes for employees and the business.
Partner well: While Africa has the fastest-growing youth population of any continent, there are still significant systemic challenges with equipping youth with adequate work-ready skills.
“Africa’s ability to reap the benefits of AI-related innovation rests on broader public-private sector efforts at cultivating the correct skills mix,” said Koolen. “Partnering with educational institutions and other industry skills development initiatives can accelerate the rate at which skills become available to companies.”
She added that technology vendors can also play a valuable role. “Large technology companies often have large global workforces and strong employer brands, allowing them to attract top talent. Partnering with tech venters can augment organisations’ skills base and provide valuable support to AI-led initiatives.”
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