As Africa’s digital economy surges toward a projected growth from 5.2% of GDP in 2025 to 8.5% by 2030, equivalent to a potential $1.5 trillion market opportunity, new research has identified a widening artificial intelligence (AI) skills gap as a looming challenge that could derail this momentum.
This concern is at the heart of ‘Africa’s AI Skills Readiness Revealed’, a new report released this week by global enterprise software leader, SAP. The study underscores the growing urgency among African businesses to acquire the right skills for AI-driven transformation, especially in key economies such as South Africa, Nigeria, and Kenya.
AI Skills in High Demand, But Supply is Lagging
“African companies expect the demand for AI skills to increase this year,” said Nazia Pillay, Interim Managing Director for South Africa at SAP. “Six in ten companies surveyed say AI skills are ‘extremely important’ to their business success. Yet, 90% are already experiencing negative impacts due to skills shortages, ranging from project delays to failed innovation initiatives.”
The report, based on late 2024 data from mid-sized and large enterprises in the continent’s top AI development markets, paints a clear picture.
It indicates that AI capabilities, particularly in AI development (85%) and generative AI (83%), are now seen as core business priorities.
However, all companies surveyed acknowledged they are currently facing or expect to face AI-related skills gaps in 2025.
Cybersecurity Takes the Lead in Tech Skills Demand
While AI skills top the agenda, cybersecurity remains the most sought-after tech capability, with 86% of organisations listing it as a critical need, showing a significant jump from 63% in the previous year’s survey.
This shift reflects increasing cyber risks associated with the continent’s digital expansion, and the ongoing push to onboard millions of citizens into digital services through public and private sector efforts.
Reskilling and Upskilling Take Centre Stage
To address the shortage, 66% of African companies are introducing AI-focused career development initiatives aimed at upskilling or reskilling employees. Reskilling is the top priority for 38% of firms, while 48% are focused on upskilling existing staff.
However, the biggest challenge appears to be not just offering these programmes, but convincing employees of their necessity.
The survey found that two-thirds of organisations say helping employees understand the importance of reskilling is a top concern in 2025.
Pillay warns that failing to develop the necessary talent could leave many companies behind. He said: “Organisations that don’t invest in appropriate skills now may find themselves unable to leverage emerging innovations, falling behind more agile, skills-enabled competitors.”
Training Frequency Rises amid Budget decline
Encouragingly, 94% of African businesses now provide training or skills development at least once a month, up from 74% in 2023. Furthermore, the share of companies offering training access at any time rose to 37%, from 28% last year. However, this momentum may be at risk.
Surprisingly, the report finds that IT and HR budget allocations for skills initiatives have decreased since 2023, a trend that SAP describes as alarming and counterproductive to long-term digital competitiveness.
New Priorities in the Talent Pipeline
The survey also highlights a dramatic shift in hiring priorities. In 2023, technical and industry-specific skills were top hiring criteria, while affordability was low on the list. In 2025, affordability is now the number one attribute companies seek in candidates, with adaptability, a key trait for rapid reskilling, coming second.
Moreover, organisations are grappling with evolving workplace dynamics. Eight in ten companies now say accommodating hybrid or remote work demands is their top HR challenge, a sharp increase from 32% last year.
Looking Ahead: Skills as a Strategic Imperative
SAP’s findings underscore that Africa’s potential as a digital powerhouse hinges not just on technology adoption but on sustained investment in human capital. Without urgent and strategic action, the continent’s AI aspirations, and its broader digital transformation agenda, may be jeopardized.
“With Africa on the cusp of a digital revolution, skills development must become a boardroom priority,” Pillay concluded. “The decisions organisations make today about talent development will determine their readiness for the AI-driven economy of tomorrow.”
As Africa gears up for an era of accelerated digital growth, the imperative is clear: AI may be the engine, but skills are the fuel. Bridging the skills gap is not just an operational necessity—it’s the foundation for inclusive, sustainable economic transformation.
