Africa stands to reap substantial benefits from artificial intelligence (AI) – but only if organisations are able to skill up in time.
This is among the findings from a new SAP report, ‘Africa’s AI Skills Readiness Revealed’, which provides research into how African companies are transforming their skills development efforts to meet the demands of the age of AI.
Nazia Pillay, interim-MD for South Africa at SAP, says: “The data is clear: African companies expect the demand for AI skills to increase this year, with six in 10 saying AI skills are ‘extremely important’ to their success. The business impact of a lack of AI skills availability is already evident, with 90% of companies in our research citing negative impacts that include project delays, failed innovation initiatives, and an inability to take on new work.”
South African companies said they are more likely to experience lower levels of competitiveness caused by a lack of AI skills, while Nigerian companies were more concerned with project delays. Kenyan companies believe they are more likely to lose out to competitors with more mature AI capabilities.
SAP’s latest report follows an earlier tech skills report released in 2023 which pointed to specific challenges and opportunities for African organisations seeking greater tech skills availability.
“Our first report was conducted just as we exited the worst of the pandemic impact. At the time, companies were facing several challenges with attracting, retaining and upskilling suitable qualified tech workers, especially in the wake of the rise of remote and hybrid work environments,” Pillay explains. “This year, the business landscape has been transformed by the impact of AI technologies and the search for relevant skills.”
The research was conducted at the end of 2024 among both mid-size and enterprise-level companies in Kenya, Nigeria and South Africa.
The study was set against a backdrop of increasing digitalisation across the continent, with Africa’s digital economy expected to account for 5,2% of GDP this year, growing to 8,5% by 2050. In South Africa, the digitalisation will probably account for between 15% and 20% of the GDP this year.
Already, 2 400 African companies are focused on AI; and the technology is predicted to account for 230-million new jobs by 2030.
Every organisation that was surveyed as part of the research said they expect the demand for AI skills to increase in 2025. All companies also expected to experience some AI-related skills gap this year.
Organisations in South Africa are most likely to experience AI skills shortages (53%), followed by Nigeria (50%) and Kenya (43%).
Skills related to AI are hugely in-demand among African organisations, with 85% saying AI development skills are a priority, and 83% prioritising Generative AI skills. To help close the AI skills gap, two-thirds of organisations are introducing career development initiatives with AI specialisation to upskill or reskill employees.
But tech skills overall are in short supply, with 100% of respondents citing an increased need for tech skills over the next 12 months. This was most acute for South African organisations at 63%.
Overall, the most in-demand tech skill among African organisations is cybersecurity. “Eighty-six percent of companies said cybersecurity skills were important to them, a significant increase over the 63% that said the same in our previous research,” says Pillay. “The growing importance of cybersecurity may be partly explained by the rapid growth of Africa’s digital economy and the millions of citizens that are being brought into the digital fold through public and private sector initiatives.”
In addition, 92% of respondents across all regions, said they’d like to see their country’s education systems focusing more on core technical IT skills, and 63% said they’d like to see more focus on AI-related skill in tertiary education.
But winning in the age of AI will require more than attracting the right talent: organisations need to invest in existing human capital to upskill and reskill their existing people.
Pillay says companies are stepping up their IT training and skills development efforts to help meet the demand for skills. “Ninety-four percent of African organisations offer training and skills development to employees at least monthly, an increase from 74% in our last survey. The number of companies offering training opportunities to employees at any time also increased from 28% in our last survey to 37% this year.”
Surprisingly, the portion of companies’ IT or HR budgets allocated to skills-related initiatives has declined since 2023. “The drop in budget allocation for skills development requires an urgent rethink. Organisations that don’t invest in appropriate skills now may find they are unable to leverage new innovations and emerging technologies, leaving them trailing their more skills-enable competitors.”
Where AI skills are simply not available, and opportunities for upskilling employees are scarce, many companies are plugging the gap with automation, with 66% of respondents across all regions using automation to augment their AI skills. The rate is highest in South Africa (68%) and Nigeria (67%).
There are far-reaching changes in the expectations of both employers and employees regarding skills and the workplace compared to a few years ago. “Eight in 10 African organisations said supporting skilled employees’ requests for hybrid or remote work is their top skills-related challenge this year, a significant increase from only 32% who said the same in our previous survey.”
The non-technical attributes that African organisations look for in potential hires have also evolved. “In 2023, technical skills and industry-specific skills were the top attributes. Affordability was somewhere near the bottom, with less than a third of organisations saying they consider it during the hiring process. This year, affordability is the number one candidate attribute for African organisations, with adaptability a close second.”
Adaptability is essential in light of the need for employees to be upskilled or reskilled with AI skills. “Reskilling is a top skills-related priority for 38% of companies this year, with 48% saying the same of upskilling employees. Unsurprisingly, two-thirds of companies said helping employees understand why reskilling is necessary is one of the top challenges this year.”
In conclusion, the report outlines key recommendation for African enterprises:
- Prepare for an AI-related skills gap in 2025;
- Understand the impact hat a lack of skills will have on your business, employees and customers;
- Invest in – and expand – skills development efforts to close the skills gap;
- Cultivate the correct skills mix for your organisation, with a focus on cloud, AI and cybersecurity skills; and
- Allocate a sufficient portion of your IT and/or HR budget to training and skill development to support the upskilling and reskilling of the existing workforce.