Why robust data centre infrastructure is vital for Africa’s digital growth and economic empowerment.
Ibrahim Sagna Investor | Chairman | Host
In an era where data drives innovation from fintech to AI, Africa needs its own infrastructure champions. Locally tailored data centres will ensure resilience, regulatory compliance, and low-latency performance. As global digital-infrastructure investment surges, Africa has become a strategic frontier, not just a consumer market.
This edition of IN THE VALLEY, focused on data centres as Africa’s infrastructure backbone, is co-published with Obinna Isiadinso, Data Centres Global Sector Lead at IFC. We extend our sincere thanks for his invaluable insights and contributions to this issue and invite you to follow him on Substack.
Global Context, African Imperative
The worldwide data centre market grew to $347.6 billion in 2024 and is on track to hit $652.0 billion by 2030, growing at a CAGR of 11.2%. North America remains the largest region—buoyed by hyperscalers like AWS, Google Cloud, and Microsoft Azure—while emerging markets are scaling rapidly. In Asia, countries like India and Indonesia are laying fiber backbones and attracting billions in data centre FDI.
This surge is driven by the relentless shift to cloud computing, AI workloads, and high-definition video streaming—all demanding ever-more server capacity.
Why is this relevant for Africa?
With Africa’s digital economy set to contribute $180 billion to GDP by 2025, local data-centre capacity is mission-critical . Building regional infrastructure now will reduce latency, safeguard data sovereignty under new protection laws, and deliver the performance needed to power fintech, e-commerce, and AI applications. This isn’t just a race to host more servers. It’s about anchoring the continent’s digital future.
Africa’s Data Center Market: Still Small, Growing Fast
Currently, Africa’s data centre footprint is relatively tiny, making up less than 1% of global capacity. But it’s scaling quickly. Today, 87 data centres operate across 15 African countries, with major clusters in South Africa, Nigeria, Kenya, and Egypt. Africa’s data centre market, estimated at $3.49 billion in 2024, is projected to reach $6.8 billion by 2030, driven by a widening capacity gap as digital demand accelerates.
Forces Driving Africa Growth
- Rising Internet Penetration internet user base rose from just 20.7% in 2014 to over 38% in 2024, driven by mobile-first adoption and falling data costs. As internet penetration continues to increase, demand for low-latency, locally hosted data is set to soar.
- Policy Tailwinds and Data Sovereignty Laws Governments across the continent are implementing legislation that requires domestic data storage and protection. Nigeria’s 2023 Data Protection Act, Kenya’s DPA, and South Africa’s POPIA are driving enterprises and governments to host data locally, boosting demand for in-market data centres.
- Subsea Cable Expansions Google’s Equiano and Meta’s 2Africa dramatically boost bandwidth and cut latency. These undersea cables are directly linking African markets to Europe and Asia, making African hosting both viable and cost-effective.
- 5G Rollout and Edge Computing Demand With 5G users in Sub-Saharan Africa set to grow from 26 million in 2024 to 323 million by 2029, data consumption is set to explode. edge data centres will serve low-latency services across fintech, streaming and AI.
- Surge in Capital Investment Major capital commitments are signalling confidence in Africa’s digital infrastructure future. The IFC has backed Raxio with $100M to scale across multiple countries. Even earlier this very week, MTN entered the cloud services market in Nigeria by unveiling the initial phase of its $235 million data center in Lagos. This launch represents a major advancement in enhancing Nigeria’s digital infrastructure. Once fully completed, the data center will have a power capacity of 9MW. The upcoming second phase, projected to cost $135 million, is focused on achieving Tier IV certification, which is the highest global benchmark for reliability and operational resilience.
Africa’s Edge Isn’t Cost, It’s Clean Power Potential
While headline-low tariffs grab attention, markets like Ethiopia or Zimbabwe still face macro and political risks. The real edge is Africa’s vast renewables—geothermal in Kenya, hydro in Zambia and solar corridors across the Sahel—that promise stable, sustainable power for digital infrastructure. Ethiopia already meets over 90% of its electricity needs from renewables, outpacing most global peers.
As AI and cloud workloads become ever more power-hungry, data centres co-located with reliable clean generation will deliver resilience, sustainability and ESG-aligned returns—far beyond mere cost savings.
The Bottleneck Isn’t ROI, It’s Hyperscale Activation
Africa’s data center market doesn’t suffer from a lack of return potential. What it lacks is hyperscale momentum beyond South Africa, the only market on the continent with multiple hyperscale availability zones in active development or operation, anchoring demand and ecosystem growth.
Elsewhere, enterprise and colocation dominate: platforms in Nigeria, Kenya, Egypt, Morocco and Ghana are credible, yet without hyperscaler-led cloud infrastructure, expansion stays moderate,
Meanwhile, annual investment of $2–3 billion across digital infrastructure, including fiber, cloud, and data centers, falls far short of the $20–25 billion needed by 2030. Closing this gap hinges not on appetite, but on aligning market conditions with development readiness.
Key Regional Players to Watch
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Where We Go From Here
To unlock the next phase of digital infrastructure growth in Africa, four priorities should guide strategy:
1. Create enabling environments that attract global infrastructure capital Cut red tape by fast-tracking permits, modernizing tax and regulatory frameworks, and coordinating land, energy and digital plans. Scaled investment follows clarity and coordination.
2. Strengthen local infrastructure participation Encourage enterprises and governments to outsource non-core IT to regional colocation providers, creating baseline demand, improving operator economics and seeding a sustainable domestic industry.
3. Align infrastructure with talent development Africa must pair infrastructure projects with workforce training to develop cloud architects, facility engineers, cybersecurity experts and AI practitioners—scalable systems need scalable talent.
4. Close the terrestrial fiber gap While subsea connectivity has improved significantly, many African countries still lack the terrestrial fiber networks required to connect data centers to end users, internet exchanges, and regional traffic corridors. Without this, latency remains high, costs stay elevated, and data centers operate in isolation. Building robust fiber backbones across cities and borders is critical to unlocking edge demand and true regional integration.
The IN THE VALLEY Perspective
Africa’s opportunity lies not in emulating data-centre hubs in Virginia, Frankfurt or Singapore, but in pioneering a cleaner, distributed and modular infrastructure model—one that leverages the continent’s unique energy mix, demand dynamics and climate ambitions. Success will depend on shaping the right enabling conditions, forging strategic partnerships and nurturing ecosystems around renewables-powered, edge-to-cloud deployments.
For investors, the value isn’t in copying
Northern-hemisphere playbooks, but in collaborating to build the distributed, sustainable platforms that will host Africa’s next wave of digital champions.
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