Africa data centres ignite innovation,investment with massive opportunities in $517.2bn global market expansion

Joy Agwunobi 

Africa stands at the threshold of a remarkable digital revolution, with the continent’s growing data center market poised to propel it to the forefront of global tech and economic advancement, reports show.

A recent analysis of the sector by Africa Data Centres Association (ADCA) and the Oxford Business Group (OBG), titled “The Data Centres in Africa 2024”, found that  the world’s data center provision market is set to skyrocket from  $187.4 billion in 2020 to $517.2 billion by 2030. With this prediction and Africa’s flourishing digital ecosystem in mind, the continent is seen to be on track to play a pivotal role in this remarkable growth trajectory, as it transforms into a key player in the global data centre landscape.

As highlighted in the report, the increasing prevalence of internet connectivity, mobile technology, and digital services in Africa is fueling unprecedented demand for robust data infrastructure. Given this trajectory, Africa stands ready to leverage its strengths and seize its opportunity to shape the global data centre landscape, building on its unique advantages and establishing itself as a major player in the digital world.

According to the report, key markets such as Nigeria, South Africa, Kenya, Egypt, and Morocco are attracting substantial investment, positioning themselves as hubs for digital infrastructure development.

Nigeria, in particular, is emerging as a crucial player due to its large population, rapid urbanisation, and growing tech ecosystem. By 2025, it is expected that over 70 percent of African  organisations will transition to cloud services, necessitating enhanced data infrastructure to support this digital shift.

Despite  accounting for less than two percent  of the global colocation data centre supply as of mid-2023, Africa’s data center market is seen to be rapidly accelerating, riding a wave of digital transformation. With South Africa leading the charge, boasting more than half of the continent’s data centers, the region is projected to see a compound annual growth rate (CAGR) of 12 percent from 2019 to 2025, catapulting its revenue to $3 billion by 2025.

To sustain the blazing trajectory of Africa’s data centre market and harness its full potential, the report underscores the importance of sustained investment in infrastructure development, broadband expansion, and supportive regulatory frameworks. It noted that by tackling these fundamental issues, the region can not only meet the ever-growing demand for digital services, but also lay the groundwork for a prosperous and digitally empowered future.

In addition to infrastructure, the ADCA and OBG report highlighted  the role of strategic partnerships and collaborations in driving the data centre industry forward.

Across the African continent, governments are recognising the immense potential of digital transformation, crafting ambitious policies and launching digital-first initiatives that promise economic growth and spur job creation. As data centres continue to pop up and expand, hubs like Silicon Savannah in Kenya and Lagos’ Yabacon Valley are emerging as hotbeds of digital innovation, drawing investors and entrepreneurs to these centres of digital excellence and laying the groundwork for a tech-driven future that positions Africa as a rising global powerhouse.

Nigeria also stands out as a key player in Africa’s data centre market, driven by increasing internet penetration and numerous tiered data centres, predominantly in Lagos and Abuja. Major players like Mainone (Equinix) MDXi, OADC, Galaxy Backbone, MTN, and RackCentre have significantly contributed to this growth.

According to a Mordor Intelligence report, the Nigerian data centre market size is estimated at 116.7 MW in 2024 and is expected to reach 226.7 MW by 2029, growing at a CAGR of 14.20 percent. The market is also expected to generate colocation revenue of $251.1 million in 2024 and projected to reach $578.1 million by 2029, growing at a CAGR of 18.15 per cent during the forecast period.

This growth is fuelled by various factors, including the rapid expansion of the country’s digital economy, the proliferation of cloud services, and the increasing need for secure data storage.  Moreso, Nigerian businesses, both large and small, are recognising the importance of data centres in ensuring the reliability, security, and efficiency of their operations. As a result, local and international investors are pouring in, establishing world-class data centre facilities across the country.

With their ability to create jobs, boost local economies, and contribute to Nigeria’s GDP, these data center beacons are not just transforming the country’s technology sector but also enabling the adoption of groundbreaking innovations like artificial intelligence, the Internet of Things, and 5G, paving the way for a brighter, more digitised future for citizens and industries alike.