10th U6+ Consortium of African Universities International Conference

The study examines the determinants of Artificial Intelligence (AI) adoption in procurement processes and its impact on the performance of Fast-Moving Consumer Goods (FMCG) firms in Arusha, Tanzania. While global literature highlights AI as a transformative driver of procurement efficiency, empirical evidence in Sub-Saharan Africa remains limited. Using a cross-sectional quantitative design, data were collected from 154 FMCG firms through proportionate stratified random sampling, covering both large- and medium-scale manufacturers and small-scale processors. The findings reveal that AI adoption significantly enhances procurement performance, particularly by reducing operational costs, improving lead times, and increasing inventory accuracy. However, institutional barriers, including poor supplier data quality, high software acquisition costs, unreliable internet connectivity, and shortages of data-literate professionals, hinder adoption outcomes. The study further confirms a pronounced digital divide: large firms with greater financial depth and skilled resources exhibit higher levels of AI integration, while small-scale processors remain reliant on manual systems. These results align with global studies emphasising the strategic role of AI in supply chain resilience, yet they also highlight localised challenges unique to emerging economies. Theoretically, the study extends the Technology Acceptance Model (TAM) and the Resource-Based View (RBV) to a Sub-Saharan context, demonstrating that both user perceptions and organisational resources jointly determine adoption success. In practice, the findings provide procurement managers with evidence to justify AI investments while highlighting the need for data quality improvements and workforce training. Policy implications include targeted infrastructure development, subsidised access to technology, and digital literacy programs to bridge the divide between large manufacturers and SMEs. Overall, the study contributes to academic discourse by filling a critical empirical gap and offering actionable pathways for inclusive digital transformation in Tanzania's FMCG sector.