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GenAI could unlock $10bn in Africa’s telecoms sector

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 15 May 2025
Africa’s frontrunners are embracing the challenges of deploying GenAI and demonstrating how to overcome them.
Africa’s frontrunners are embracing the challenges of deploying GenAI and demonstrating how to overcome them.

Generative artificial intelligence (GenAI) is set to create significant value across sectors, and Africa has a unique opportunity to leapfrog other regions by capitalising on this transformative technology.

This is according to a new McKinsey research report, which reveals the African continent could unlock more than $100 billion in additional economic value annually through the at-scale deployment of GenAI.

This transformative potential positions Africa not just as a participant but as a leader in the global AI arena, it says.

According to the research, more than half of the economic potential from GenAI in Africa is concentrated in sectors where there are already frontrunners: banking; retail; consumer packaged goods; telecommunications; insurance; mining, heavy industry and energy; and the public sector (including healthcare).

In each of these seven sectors, there are organisations that are doing pioneering work in advancing the application of GenAI in their industry. However, these use cases represent just the tip of the value iceberg, it adds.

In Africa’s telecoms sector, for instance, innovative applications are showcasing the transformative potential of GenAI in reshaping the telco landscape across the continent, according to the report.

At-scale deployment of GenAI in telcos on the continent can unlock $6 billion to $9.6 billion annually in economic value, it says.

The prime opportunities lie in boosting business-to-business and business-to-customer marketing and sales with copilots, automated outreach and personalisation, improved identification and resolution of network issues through GenAI-enabled experience measurement and ticket resolution. The emerging technology could also enhance customer service and operations to drive efficiency and customer satisfaction, notes the report.

“Africa’s frontrunners are not only embracing the challenges, but also demonstrating how to overcome them and scale GenAI solutions effectively,” says Umar Bagus, senior partner and leader of McKinsey’s digital and analytics practice in Africa.

“Throughout McKinsey’s client service work in Africa, we have witnessed a strong foundation for AI adoption. By addressing existing barriers and focusing on scalable solutions, Africa can harness the transformative power of GenAI to drive economic growth and development across multiple sectors.”

The research report notes the rapid rise of GenAI has captured the world’s imagination and accelerated the integration of AI into the global economy and the lives of people across the world. As institutions apply AI in novel ways, beyond the advanced analytics and machine learning applications of the past 10 years, the global economy could increase significantly, improving the lives and livelihoods of millions.

“Nowhere is this truer than in Africa, a continent that has already demonstrated its ability to use technology to leapfrog traditional development pathways; for example, mobile technology overcoming the fixed-line internet gap, mobile payments in Kenya, and numerous African institutions making the leap to cloud computing faster than their peers in developed markets.”

Banking on GenAI

According to the report, South African insurers lead in using GenAI for customer engagement, claims management and fraud detection.

For example, a local life insurer combines GenAI with behavioural science to provide financial advisers with personalised advice content, boosting client engagement and retention.

Another insurer in SA is using GenAI to develop personalised and gamified educational content to help with self-led financial planning.

African banks are also using GenAI to boost productivity and personalise customer interactions. For example, one bank uses large language models to create personalised marketing content, improving campaign effectiveness and reducing time to market campaigns.

A South African retail bank applies AI for risk assessment, document vetting and decision-making. GenAI is also transforming Africa’s mining industry and the public sector.

However, the report warns bridging the gap between piloting and scaling GenAI can be challenging, particularly due to infrastructure limitations, a shortage of skilled professionals with GenAI expertise, regulatory uncertainties, risks associated with GenAI and data quality issues.

Mayowa Kuyoro, partner at McKinsey, comments: “African organisations must align talent, technology and data with their goals, and focus on a holistic approach that integrates strategy, operating models and user adoption. This approach can help to dismantle barriers and equip them to excel in an AI-driven world.”

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