Tech won’t fix Africa’s informal economy without power and rails, says AFC CEO

At the Africa Financial Summit (AFIS) 2026 in Luanda, Angola, Africa Finance Corporation (AFC) CEO Samaila Zubairu emphasized that artificial intelligence and digital apps cannot formalize Africa's informal economy without significant investment in basic physical infrastructure. Zubairu cautioned that technology alone cannot leapfrog traditional industrialization in the continent.

During the panel discussion titled "Capital Architecture: A New Age for African Finance," Zubairu contended that software applications are rendered ineffective when businesses lack essential utilities like electricity, storage, and transport networks. Despite AI posing threats to the current labor market, it cannot function without these fundamental enabling elements.

Zubairu stressed that technology must be supported by other essential factors, including digital service provision, accessible land titles, effective tax systems, training systems, digital access to government services, and the infrastructure necessary to support businesses. He noted that successful examples like China's formalization of its informal sector required the construction of physical infrastructure that reduced the cost of doing business.

In Africa, where the informal sector employs 83% of the population, merely digitizing small enterprises without reliable electricity, warehousing, cold chains, and telecommunications networks will not boost productivity. Zubairu urged African policymakers and investors to avoid treating infrastructure projects as isolated endeavors.

Instead, he advocated for comprehensive industrial master planning that integrates infrastructure developments into broader regional ecosystems. Using the Lobito Corridor as an example, Zubairu argued that this strategic railway project connecting mineral-rich regions to Angola's Atlantic port should be used to foster regional processing, local agricultural distribution, and cross-border energy trade.

He emphasized that policymakers should consider the energy requirements within these economic zones and ensure the processing of extracted minerals rather than exporting raw materials. Furthermore, Zubairu highlighted the importance of urban planning, warning that rapid infrastructure development could result in unplanned urban slums if not managed properly.

The debate at the summit highlighted the discrepancy between the rapid pace of technology-driven development and the slower pace of bureaucratic state machinery. The consensus was clear: for Africa's technology sector, building the hard, physical foundation of the economy is crucial before digital formalization can be realized.