Rob Floyd, Director for Innovation and Digital Policy at ACET, discusses the launch of a new three-year, multi-country research and policy project to help African governments harness the opportunities that artificial intelligence (AI) offers to inform fiscal and monetary policy—and in turn support Africa’s sustainable development.
Can you explain why AI is an increasingly important issue for governments and policymakers, and what that means for Africa in particular?
Rob Floyd: Using artificial intelligence to inform fiscal and monetary policy can be a game changer in delivering transformative economic growth for Africa. As countries continue to recover from the COVID-19 pandemic, AI offers a fresh approach to economic policy design and implementation. Economic policies must be optimized to address critical socioeconomic issues and to achieve social objectives, and AI can provide enormous benefits there.
AI solutions are increasingly utilized in sectors such as health, agriculture, and education, but their adoption by ministries of finance or central banks remains limited, even in the Global North. The African Union recently unveiled its white paper and roadmap on artificial intelligence, while data policy frameworks are evolving quickly across the continent. It is crucial to prepare policymakers in Africa to utilize AI tools effectively in the future, necessitating a better understanding of the risks, benefits, and applications in policy environments.
In Africa, AI can aid policymakers in developing frameworks for areas such as workforce preparation, tax policy, setting interest rates, project financing, improved subsidy targeting, and budgetary expenditure controls. There are opportunities to experiment and scale AI applications directly in economic policy planning processes that includes a high-level assessment of countries’ readiness to test applications and ensure research translates into policy impact.
How is AI’s rapid emergence impacting ACET’s research agenda?
Rob: It’s not just AI. The development landscape has evolved dramatically since ACET was founded 15 years ago, whether we’re talking about finance, climate, gender, skills development, or innovation and technology. Everyone is looking for the most effective approaches to secure Africa’s future—a phrase we use often at ACET. So our organization has to evolve too. And one way we are doing that is through a much deeper analytic engagement on the issues I just noted, so that we have the evidence to better understand their impacts on economic transformation, in both good and bad ways.
So in that context, last year we launched the Innovation and Digital Policy program at ACET and embarked on a groundbreaking research aimed at the nexus between artificial intelligence and economic policymaking. The research resulted in the report “Artificial Intelligence for Economic Policymaking — The Frontiers of Africa’s Economic Transformation.”
That report highlighted the potential of using AI tools to help craft more informed, targeted, and effective economic policies in Africa, as well the need for further analysis and experimentation for African governments to apply AI solutions. We considered the research and publication of the report as our program’s “first phase.” Since the report’s release, we have engaged with partners and government leaders to extend the research in a second phase, which is underway now. It’s very exciting.
ACET is launching a major AI research project. Describe what it will do and how it fits with the organization’s mission of helping countries achieve economic transformation.
Rob: It is likely that AI and other emerging technologies will lead to the biggest economic and social transformations in decades, and African leaders must be ready. They need to start now and prioritize experimentation. But we see a gap in the way AI tools are being used for policymaking.
So we have started this new project to help African governments leverage the benefits of AI. Its official name is “Exploring AI Solutions in Economic Policymaking in Africa.” It is a multi-year, multi-country research and policy project anchored around “sandbox” exercises—or open testing of innovative models and ideas. With support from IDRC’s AI for Development in Africa, and with a wide array of partners, we will test AI solutions in real-world African contexts while ensuring a strong learning element for knowledge sharing.
We will select three African countries as focus countries for the initial pilot phase, which is expected to last three years. Two governments already are on board—Togo and Malawi—and we are in advanced discussions to confirm the third country. It is exciting to work with governments that are committed to building the right capacity, policy, and infrastructure ecosystems to support digital development. We see this project as the foundation for more countries to build capacity and adopt and embed AI and other emerging technologies into national development, including in economic policymaking.
How were the pilot countries selected?
Rob: We selected them based on public data on the digital, economic, and geographical conditions of the country. However, the team at ACET prioritized having a well-placed champion who exhibited the political will to ensure the project’s success, had the convening power to bring together different stakeholders across government, and had exhibited an interest in the potential of emerging technology to influence economic policy. As the project moves farther along, we will publish a short paper on the country selection criteria as a guide for partners seeking to adopt a similar approach.
In the future we hope to extend the project to more governments to leverage AI for various forms of economic policy. The initial countries will provide helpful use cases and should create learning partners for subsequent governments and, potentially, subregional economic policymaking. ACET believe strongly in partnerships and co-creation, and we know that type of engagement is central to the project’s eventual success.
Global AI experts have recently made some dire predictions about the potential risks of artificial intelligence if not managed responsibly. How will ACET address concerns such as privacy, inclusivity, and equitable representation?
Rob: As optimistic as we are for AI’s positive impact on economic transformation, we are equally focused on helping policymakers guard against the downsides. And we are doing that both in our research and our approach. For example, ACET is working on a background paper on responsible and ethical AI in the context of economic policymaking to inform and guide our work with African governments. This research is intended to support risk-based regulations and ethical frameworks that provide the right environment for experimentation, learning, and innovation around AI. At the same time, there’s also the issue of equality and inclusivity. We are highly cognizant of the need to ensure gender-positive and inclusive approaches, as well as the concerns regarding AI bias and data sovereignty.
In each country, stakeholders will collaborate to define a key policy challenge or policy driver that will shape the focus of the sandbox exercises. This inclusive process will ensure that stakeholders have a direct involvement in design, and that the agreed approaches align with countries’ development strategies, capacities, and needs. While significant data collection efforts may not be necessary in most cases, sandbox exercises will utilize official and publicly available data sources, deploying global best practices in data protection and privacy.
What are the main goals and objectives of the AI project?
Rob: First and foremost, the project aims to ensure that recommendations and solutions are tailored to each country’s policy environment and align with each country’s policy priorities. This is common practice at ACET, and it’s a proven process for turning ideas into actual policy actions through research, knowledge sharing, and citizen engagement. But as we implement this project in the selected countries, we hope to achieve three broad objectives.
First, to inform well-designed and transformative economic policy. We will develop an African-centric knowledge base on AI in economic policymaking, aiming to inform policymaking and foster broader engagement among academia, regional institutions, and African policy institutes. This will be used to guide other countries, which can lead to faster policy responses, better targeted fiscal and monetary policy, and regulations that best reflect the needs of citizens.
Second, to enable practical experimentation and simulation. The project will generate insights into current and future possibilities regarding the utilization of AI tools in informing economic policies. This knowledge, gained through hands-on experience using AI tools will empower policymakers to effectively utilize AI to mitigate risks and customize solutions, thereby enhancing AI and digital literacy among policymakers.
Third, to establish a community of practice. Lastly, we envision the project as establishing a community of practice comprising experts and policymakers dedicated to advancing the use of AI in economics. The community will focus on exploring opportunities and addressing challenges associated with AI solutions, including data management, algorithm bias, ethics, and issues related to access and gender equality.
Can citizens get involved, and if so, how?
Rob: Absolutely. In fact, we’re counting on it. ACET recognizes the valuable and important conversations taking place across the continent regarding the opportunities and challenges that AI technology presents. Within the public, private, and civil society sectors, there are numerous initiatives and projects aimed at AI development. We want to make sure that our work reflects the views, experiences, and knowledge of those closest to these developments. To ensure we are arming government leaders with the tools they need to leverage AI and other emerging technologies, we encourage broader stakeholder participation in the process.
As I noted previously, we are establishing a community of practice on AI in economic policymaking that we hope to grow aggressively. In the meantime, I encourage anyone interested in getting involved to contact me directly ([email protected]) for more information. And of course follow ACET’s work via our social media platforms and website.
To learn more about ACET’s Innovation and Digital Policy Program, visit acetforafrica.org/innovation-digital-policy
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