Artificial Intelligence Investment in Resource-Constrained African Economies: Financial, Strategic, and Ethical Trade-Offs with Broader Implications

This paper argues that investing in artificial intelligence (AI) in developing economies involves significant trade-offs requiring ethical, financial, and geopolitical
scrutiny. While AI is increasingly seen as a vehicle for technological leapfrogging, such ambitions often mask structural constraints, including weak infrastructure, limited institutional capacity, and external dependency. Using the economic theory of opportunity cost—extended through the political economy and digital governance perspectives—this study critically examines AI policy strategies in Ghana, Kenya, and Rwanda. A qualitative design grounded in secondary data and a thematic analysis reveals how AI investment may reallocate scarce resources away from essential services, exacerbate inequality, and entrench strategic technological dependency. This paper proposes a public policy framework built on four principles—sequential readiness, strategic alignment, ethical governance, and capacity building—to guide equitable AI deployment. It argues for establishing a digital social compact between states, citizens, and technology actors to safeguard public interest in AI-driven development. Finally, this paper outlines a future research agenda emphasizing the mixed-method evaluation of AI’s long-term social impacts, including employment, inclusion, and public service delivery.