CHIEF Executive Officers (CEOs) in East Africa are placing significant bets on Generative Artificial Intelligence (AI) amid economic uncertainty, according to the 2024 KPMG East Africa and Africa CEO Outlook report.

Alexander Njombe, Country Managing Partner at KPMG in Tanzania, stated in Dar es Salaam yesterday that CEOs identify five key benefits of Generative AI, including its potential to increase profitability. 

Twelve percent of CEOs in East Africa view Generative AI as a means to enhance profitability, compared to 16 percent of CEOs across Africa and 10 percent globally.

“CEOs believe that Generative AI boosts efficiency and productivity by automating routine tasks. Other benefits include improved fraud detection and cyber-attack response, personalized customer engagement, and opportunities for new product and market growth,” Njombe noted.

Despite ongoing economic challenges, the outlook reveals that 48 percent of CEOs in East Africa prioritize Generative AI investments, along with 46 percent of their African counterparts and 65 percent of CEOs worldwide.

“Tanzania is making significant strides in adopting Generative AI, with substantial investments made during President Dr. Samia Suluhu Hassan’s administration. We have seen advancements in robotic technologies and related staffing,” Njombe added.

However, CEOs also outlined six challenges in implementing Generative AI within their organizations: ethical dilemmas, technical capability and skills shortages, a lack of regulation, employee adoption, implementation costs, and the spread of misinformation.

“According to the outlook, 90 percent of CEOs in East Africa face ethical challenges when implementing Generative AI. This figure drops to 44 percent in Africa and 61 percent globally,” Njombe said.

Seventy-six percent of organizations in East Africa encounter gaps in technical capability and skills for AI implementation, with 60 percent reporting the same challenge across the continent and 48 percent globally.

A lack of regulation is the third challenge, affecting 64 percent of CEOs in the region, 56 percent in Africa, and 51 percent worldwide. In East Africa, only 44 percent of CEOs believe their organizations are adequately equipped to upskill employees to fully leverage the benefits of Generative AI, compared to 46 percent in Africa and 64 percent globally.

The outlook also indicates that 34 percent of CEOs in East Africa are reevaluating their training and development strategies due to Generative AI, with similar sentiments expressed by 31 percent of African CEOs and 56 percent globally.

Furthermore, 28 percent of East African CEOs are reconsidering the skills required for entry-level positions, with 33 percent reflecting this sentiment at the continental level and 57 percent globally.

“CEOs are optimistic that the impact of Generative AI on organizations will become apparent in the next three to five years. In East Africa, 78 percent believe it will not fundamentally change job numbers but will necessitate upskilling and redeployment of existing resources. This view is shared by 81 percent of African CEOs and 76 percent globally,” Njombe stated.

About 22 percent of CEOs in East Africa are confident that Generative AI will create more jobs than it eliminates. This belief is echoed by 19 percent of African CEOs and 23 percent globally.

The report highlights three functional areas where CEOs plan to invest in Generative AI over the next three years: information technology, sales and marketing, and finance and accounting.

Regarding preparedness, 40 percent of East African CEOs feel confident that their organizations can access suitable cybersecurity talent and solutions to counter AI threats, compared to 43 percent in Africa and 59 percent globally. Only 12 percent of CEOs in the region are confident that their organizations’ cybersecurity measures can keep pace with rapid AI advancements, with figures of 23 percent in Africa and 55 percent globally.

The KPMG 2024 CEO Outlook provides an in-depth perspective from 1,325 global chief executives regarding enterprise and economic growth, including 50 CEOs from the East African region. The report covers eleven sectors: technology, insurance, life sciences, manufacturing, telecommunications, asset management, automotive, banking, consumer and retail, energy, and infrastructure.

This perspective aligns with efforts in both public and private sectors to promote Generative AI as a tool for boosting efficiency, enhancing networking, and unlocking new business opportunities, rather than a threat to human jobs.

Patrobas Katambi, Deputy Minister of State for Labour, Youth, Employment, and Persons with Disabilities, shared this narrative recently. He stated that the government views Generative AI as an opportunity to expand business scope, enhance talent, innovate, and upskill digital capabilities, ultimately boosting productivity for individuals and enterprises.

“Generative AI generates information based on human input. While robots can perform specific tasks, they cannot handle complete job packages or duties. Misinformation is leading some employees to unnecessary fear,” Katambi explained.

He emphasized that AI serves as a remedy for menial tasks but not for professions that require reasoning and adaptability.

“It’s crucial to assess how knowledgeable and skilled today’s graduates are in the context of AI. We recognize that AI is increasingly being applied as a helpful tool for students at all educational levels,” he added.

Suzanne Ndomba-Doran, Chief Executive Officer of ATE, noted that the emergence of ChatGPT signifies a technological advancement in public awareness of AI tools.

She urged both public and private sectors to implement reskilling and upskilling programs for employees to adapt to this new technological landscape.

“Data protection is a potential threat as AI evolves globally. Moreover, mental health issues may arise for those concerned about being left behind,” Doran warned.

Hery Mkunda, Secretary General of the Trade Union Congress of Tanzania (TUCTA), emphasized the importance of empowering employees to acquire digital skills to improve efficiency and productivity during this early stage of AI implementation in Tanzania.

Dr. Yose Mlyambina, a Judge of the High Court of Tanzania’s Labour Division, indicated that AI is still developing within the country’s judicial system.

He mentioned that the judiciary has implemented ten ICT systems, including an e-Case Management system, to embrace technology.

“Generative AI can significantly reduce the workload of judges and magistrates through automatic transcription, allowing them to focus on listening and making judgments,” said Dr. Mlyambina.

Caroline Mugalla, ILO Country Director, warned that the future of work faces threats from globalization, digitalization, AI, and climate change.

She pointed out the risks of deteriorating working conditions and inequality in the workplace, urging policies that address the challenges posed by AI in the employment sector.

“We must prioritize social protection for affected workers amidst technological advancements and address gender disparities, particularly concerning employment opportunities for women,” she asserted.

The International Labour Organization’s 2023 study, titled “Generative AI and Jobs: A Global Analysis of Potential Effects on Job Quantity and Quality,” suggests that Generative AI is more likely to enhance jobs by automating specific tasks rather than replacing entire roles.