Digital Readiness and Growth: How Government AI Preparedness shapes African Economies

Purpose: This study investigates the impact of government AI readiness on economic growth, with a particular focus on the roles of government, the technology sector, and data & infrastructure. It aims to provide a nuanced analysis of the digital readiness-growth nexus and evaluate whether artificial intelligence in government acts as a catalyst for or a constraint on African economic growth. Design/Methodology/Approach: The study employs an econometric analysis, namely the GMM system. The analysis is conducted on a panel of 44 African countries over the period 2020–2024, capturing the dynamic relation between government AI readiness indicators and economic growth. Findings: The main result is that economic growth in the African countries is strongly dependent on its past values, while the direct contribution of government, technology sector, and data & infrastructure does not emerge as significant within the short timeframe examined. Practical Implications: Policymakers should promote the application of AI in African governments by strengthening governance through robust legal frameworks, transparent digital strategies, and technology development through the digitization of public services. As well as effective data management and infrastructure improvement. Originality/Value: This study provides new empirical evidence on the relation between the digital readiness in government and growth in African economies, considering multiple dimensions of government AI readiness and utilizing a robust econometric approach (GMM system). It contributes to the debate on digital readiness by distinguishing between government, the technology sector, data, and infrastructure.