World Bank headquarters in Washington, D.C., United States. Photo: Offical website
In its World Development Report 2026, the WB says countries with adequate digital infrastructure should first make wider use of off-the-shelf AI applications, such as chatbots and coding assistants that can be accessed through a basic internet connection, before investing in more advanced AI capabilities.
The bank added that adapting AI applications to local context, such as healthcare, requires developed data centres and cloud infrastructure, but doing so remains expensive as many developing countries currently lack the foundational building blocks.
The report identifies artificial intelligence as a key driver of future economic development but says its adoption in developing economies is often held back by limited awareness of the technology, financial constraints and weak management capacity.
The WB warned that while that AI offers opportunities to boost productivity, expands access to finance, and strengthens public services, it also risks deepening inequality and concentrating power in advanced economies if policies are not carefully designed.
Describing AI as a general-purpose technology comparable to electricity or the internet, the report says it can improve productivity by reducing human error, streamlining production and distribution, and supporting faster, better-informed decision-making.
The report recommends that governments in developing countries focus on a set of broad policy priorities, including investing in the basic infrastructure that enables access to affordable electricity and internet connectivity for better AI adoption
It also calls on governments to support entrepreneurs, equip workers with the skills needed to use AI and establish governance frameworks that promote trust and accountability. Public procurement and fiscal policy, the report says, can be used to encourage AI adoption while improving education, healthcare and public services such as tax collection, infrastructure planning and social protection.
This is followed by investing in AI-related technical skills so workers can adjust and benefit from the technology, as it is more likely to help employees rather than being displaced by it.
In developing countries, AI is currently more likely to augment jobs than replace them, provided workers have the skills to use AI tools effectively. The share of jobs exposed to AI automation is lower in advanced economies than in developing ones.
In low- and middle-income countries, about 4.5 percent of existing jobs are flexible to adoption to automation by generative AI, compared with 14.2 percent in high-income countries.
AI could also result in significant environmental harm through its demand for energy resource and raising cybersecurity risks. It notes that cyberattacks increased by 53 percent in 2025 and escalated sharply across Eastern Europe, the Middle East, and Africa during the past year, as digital economy grows alongside the misuse of AI tools.
Egypt targets increasing the share of AI in GDP to 7.7 percent by 2030 as per its AI Strategy. The report says AI could help narrow productivity gaps among smaller businesses by enabling less-experienced workers to perform more complex tasks, potentially leading to higher productivity and better-paying jobs in sectors including healthcare, legal services and software development.
The report also urges governments to align AI regulation with international best practices while investing in systems to evaluate the effectiveness and impact of AI applications.
AI solutions may not be sufficient, however, to bring major benefits in the delivery of government services without the necessary digital public infrastructure (DPI), such as digital IDs, verifiable digital credentials, and digital payment wallets.
The report highlights Egypt's efforts to strengthen AI governance, noting the establishment of the National Council for Artificial Intelligence in 2019 alongside the launch of the country's national AI strategy. It also points to the creation of the Personal Data Protection Centre in 2025 as part of broader efforts to build institutional capacity.
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