African businesses are increasingly prioritising artificial intelligence to improve productivity and competitiveness, but weaknesses in data infrastructure, workforce skills and implementation are limiting their ability to turn investment into measurable returns, according to a new KPMG report.
Read also:Air traffic controllers threaten service withdrawal over aging infrastructure
The 2026 KPMG Africa CEO Outlook found that 72 percent of African chief executives consider AI a top investment priority, reflecting growing recognition of its potential to transform business operations. However, many companies are struggling to move beyond pilot projects and integrate the technology into everyday operations.
The report highlights a gap between investment ambitions and organisational readiness, particularly in West Africa, where only 10 percent of chief executives believe their organisations are keeping pace with developments in AI. The figure compares with 20 percent in Southern Africa.
Read also: Meet the six African billionaires of European descent
The findings come as African business leaders maintain a positive outlook despite economic uncertainty and rapid technological changes. About 79 percent of CEOs surveyed expressed confidence in their companies’ growth prospects, while 72 percent were optimistic about their domestic economies. The report also found that 86 percent recorded revenue growth in their most recent financial year.
However, Shamit Govind, AI Lead at KPMG One Africa, argues that confidence and investment intentions will not be enough to secure long-term growth unless businesses can translate technology adoption into practical results.
African CEOs are somewhat less likely than their global counterparts to identify AI as a major investment priority. While 72 percent of African respondents named it among their top priorities, the global figure stood at 79 percent.
There is also a difference in expectations around returns. Nearly half of African CEOs, or 48 percent, expect to realise returns on AI investments within one to three years, compared with 71 percent globally. The disparity reflects the economic pressures and operational challenges facing businesses across the continent.
Read also: How funding, policy constraints limit youth-led enterprises across Africa
Data readiness remains one of the biggest obstacles. About 60 percent of business leaders in West and East Africa identified data readiness as a challenge, with concerns ranging from poor data quality and limited access to weak governance and difficulties integrating information across different systems.
These weaknesses can undermine the reliability of AI applications, particularly where companies lack the infrastructure and processes needed to manage information effectively.
For businesses, the challenge extends beyond acquiring AI tools. They must establish systems for collecting, storing and using data, while developing operating models that allow the technology to support core business activities.
The report suggests that companies need to move from experimentation towards practical deployment, with each AI project tied to a defined business objective. These could include reducing operating costs, improving customer service, strengthening cybersecurity or making supply chains more efficient.
Workforce capacity is another critical factor. Employees need the skills and confidence to work alongside AI systems, while managers must guide staff through changes to existing processes and responsibilities. Without investment in people, companies risk adopting technology that is not fully integrated into their operations.
Despite the challenges, Govind sees significant opportunities for West African businesses, given the region’s expanding digital infrastructure, entrepreneurial activity and growing interest in technology-driven solutions.
He argues that organisations able to strengthen their data foundations, develop workforce capabilities and establish effective governance frameworks will be better placed to move beyond AI trials and generate sustainable business value.
The findings point to a broader challenge for African companies: ensuring that growing confidence in technology translates into stronger business performance. As investment in AI increases, the measure of success will depend less on the number of projects launched and more on their impact on productivity, efficiency and competitiveness.
Related News
Faith Omoboye is a foreign affairs correspondent with background in History and International relations. Her work focuses on African politics, diplomacy, and global governance.
Source: