Construction of data centers is booming in Africa, marking a significant shift and potential for growth in this region.
Africa's Data Center Boom: A New Era for Digital Economy
Africa is witnessing a surge in data center investments, marking a significant shift in the continent's technological landscape and economic future. This transformation is driven by rising internet penetration, mobile adoption, cloud services demand, and favorable regulatory reforms.
In 2019, Microsoft Azure opened a data center in South Africa, followed by AWS in Cape Town. Google has announced plans for cloud regions across the continent, including Kenya and Nigeria. Raxio Group is developing data center facilities in Uganda, Ethiopia, Mozambique, and the Democratic Republic of Congo.
The growth of data centers in Africa is not just a technological shift but a reshaping of the continent's economic future, as Africa becomes a vital hub for storing and distributing digital content. The number of internet users in Africa has grown exponentially over the past decade, driven by affordable smartphones, improved connectivity, and undersea cable expansions.
One of the most significant developments is the launch of West Africa's largest Tier III Data Centre, the Sifiso Dabengwa Data Centre, by MTN Nigeria. Airtel Africa has announced plans to construct data centers in Nigeria and Kenya, with a capacity of 36Mw in Nigeria and 7Mw in Kenya.
The continent's data center market is expected to grow at a compound annual rate of over 12% through 2028. Key trends driving this growth include leapfrogging technology adoption, strong regional cloud market expansion, local cloud platforms, expansion of new data centers, and integration of renewable energy.
However, Africa's data center development also faces challenges. Infrastructure resilience and scalability, regulatory and business environments, energy supply and sustainability, and continental connectivity and interoperability are critical issues that need to be addressed. Early last year, BitCluster became the first Russian company to open a 120 MW data center in Ethiopia. Visa has announced plans to invest in a data center in Nigeria.
The Kenyan government has set aside Sh5.2 billion for the construction of a new data center in Konza Technopolis, a new Smart City being constructed outside the capital Nairobi. Morocco is partnering with the American tech firm Iozera to build a 386MW data center and AI hub in Tetouan, Morocco.
Multinational tech giants like Microsoft, Google, Amazon Web Services, and Huawei have recognized Africa's potential and have opened or announced plans for data centers on the continent. African companies like Liquid Intelligent Technologies and Africa Data Centres are emerging as significant players in the data center space, operating Tier III data centers across several countries.
With the right mix of investment, policy, and innovation, Africa could leapfrog traditional stages of digital development and become a critical node in the global data economy. The data center construction market in Africa is expected to nearly triple in value from approximately US$1.3 billion in 2024 to over US$3 billion by 2030, reflecting a continental surge in demand to support increasing digital transformation across industries.
References: 1. Data Center Dynamics 2. African Business Magazine 3. TechCabal 4. ITWeb Africa 5. Data Economy
- To maximize Africa's potential in the digital economy, investors are increasingly focusing on financing the construction of data centers across the continent, like Raxio Group's facilities in Uganda, Ethiopia, Mozambique, and the Democratic Republic of Congo.
- Infrastructure resilience and scalability are crucial factors in addressing challenges associated with Africa's data center development, as seen in the recent announcement by Visa to invest in a data center in Nigeria.
- The African data-and-cloud-computing landscape is undergoing significant changes, with technology companies, such as Microsoft, Google, Amazon Web Services, and Huawei, investing in real-estate infrastructure to support the growing demand for data centers, as evidenced by the launch of West Africa's largest Tier III Data Centre by MTN Nigeria.
