South Africa has emerged as a major player in leveraging artificial intelligence (AI) for socioeconomic development and climate impact mitigation.

However, unlocking the full potential of AI will require overcoming barriers such as limited data availability, high technology costs and a gap in AI skills.

Citing research from AI4D Africa, GSMA, the global representative body for mobile telecoms operators, says that, while Africa currently accounts for only 2.5% of the global AI market, emerging AI applications have the potential to boost the continent’s economic growth by $2.9-trillion by 2030.

South Africa, with its robust computer capabilities, data centres and a vibrant research and development ecosystem, stands out as a regional leader in AI, the organisation outlines in its latest report, ‘AI for Africa: use cases delivering impact’, which was funded by the UK Foreign, Commonwealth and Development Office.

“AI has the power to support the transition of South Africa’s key industries by significantly boosting efficiency, sustainability and resilience,” explains GSMA mobile for development head Max Cuvellier Giacomelli, highlighting the technology’s transformative capacity in agriculture, energy, climate action and health.

Despite the country having fewer AI use cases in the areas covered in the research compared with peers like Kenya and Nigeria, its focus on advanced sectors such as financial inclusion, manufacturing, education and health presents significant opportunities to extend AI’s benefits to broader social and environmental challenges.

AI has the potential to be an economic enabler for the country by improving the productivity of South Africa’s core industries and creating new jobs in emerging fields like data analysis, graphic design and computer engineering.

The South Africa deep-dive report, one of three in-depth country-specific reports accompanying the primary ‘AI for Africa’ report, highlights that the AI market in South Africa is estimated to be worth $3.18-billion in 2024 and expected to grow to $8.74-billion by 2030.

It further outlines how South Africa has become a thriving technology and innovation hub, enabled by the presence of startups, big tech players, strong academic and research institutions, investors, incubators and accelerators.

Startups in South Africa raised $548-million – the highest share in Africa – in 2023, with the country boasting about 80 active technology hubs, second only to Nigeria, as well as two dedicated AI hubs.

In addition, South Africa’s smartphone adoption accounted for 69% of its total cellular connections in 2022. This is projected to increase to 94% by 2030.

“With its developed technology ecosystem and mature education ecosystem, South Africa has become one of Africa’s leaders in exploring the potential of AI in its economic growth and development,” the report notes.

Further, the country’s advanced smartphone and Internet penetration, in addition to its investments in digital, means it is well poised to fulfil the opportunity of AI.

The South African deep-dive report points out that AI applications can enhance productivity and food security in the agriculture sector, as well as optimise energy access and efficiency, reduce health inequalities and build resilience amid climate change.

According to the report, South Africa has a relatively advanced agricultural sector which employs less than 20% of the workforce and features a mix of developed commercial players and subsistence farmers.

The report identifies substantial opportunities for digital technologies and AI to enhance resource allocation efficiency, boost agricultural productivity and yields, improve market access for farmers and minimise inputs and crop waste.

However, several challenges hinder the widespread adoption of AI innovations in agriculture, including the limited availability of data and devices such as smartphones and sensors, as well as unreliable connectivity in some rural areas.

While smartphone penetration is relatively high in South Africa, the cost of mobile data can remain a barrier, and there is a notable lack of digital skills among key end-users, which further complicates the integration of AI technologies, the GSMA points out.

Meanwhile, as South Africa grapples with energy challenges that include ageing infrastructure, reliance on coal and the need to ensure reliable and sustainable energy access for all, AI has the potential to transform the energy sector by driving efficiency, sustainability and resilience. However, its application is still in the early stages.

In addition, despite successes in expanding access and incorporating renewable sources, South Africa’s energy sector faces significant challenges in reaching rural areas and maintaining reliability.

“AI technologies can be used in combination with tools like geospatial mapping to enhance energy distribution and reliability, as well as increase the uptake of off-grid solutions like solar home systems,” the GSMA notes, further pointing out that mobile operators, such as Vodacom and MTN, are investing resources to optimise their own energy use and improve network resilience, particularly in areas with inconsistent power supply.

South Africa, which is vulnerable to the impacts of climate change, also stands to benefit significantly from AI-driven climate action solutions.

“AI applications in disaster preparedness, natural resource management and biodiversity conservation are highlighted as critical in mitigating the effects of climate change. For instance, the Microsoft AI for Good Lab’s project with the South African National Parks leverages AI to prevent human-wildlife conflict, while the World Food Programme’s SKAI initiative uses AI to develop real-time insights for disaster response,” the report says.

Further, AI has the potential to significantly enhance efficiency and scale existing digital solutions in South Africa’s health sector, which faces challenges including a high disease burden and unequal access to quality services.

By automating tasks like patient management and hospital resource allocation, improving the accuracy of medical imaging diagnostics and deploying AI-powered telemedicine platforms, AI can make healthcare more accessible, particularly in rural areas.