Expanding data centre infrastructure across the African continent is being propelled by various government initiatives aimed at fostering a conducive environment for technological advancement. Many African nations are implementing tax incentives, creating Special Economic Zones (SEZs), and engaging in public-private partnerships to stimulate growth in the data centre construction market. For instance, in May 2024, Kenya’s Ministry of Information, Communications, and the Digital Economy partnered with Microsoft and G42 for a significant USD 1 billion digital investment initiative.
The push for innovation in data centre infrastructure is also being driven by advancements in artificial intelligence (AI). With sectors such as agriculture, energy, and climate increasingly relying on scalable computing environments, the demand for flexible data centre solutions is surging. As part of this effort, South Africa launched its Draft National AI Strategy in July 2024, targeting US$3.7 billion in AI investments by 2030.
The rollout of 5G networks is further intensifying the demand for edge data centres, which enhance connectivity and support various applications like the Internet of Things (IoT) and advanced mobile services. Notably, MTN South Africa introduced Africa’s first 5G ultra-range maritime network in September 2024, extending internet access up to 22km offshore.
Recognition of the importance of renewable energy is also shaping the data centre landscape. To combat unreliable electricity grids and reliance on fossil fuels, African nations are increasingly investing in renewable energy sources. In November 2024, Teraco commenced work on a 120MW solar photovoltaic power plant in South Africa, demonstrating a commitment to sustainability in powering data centres.
The African cloud market is undergoing rapid expansion, with an annual growth rate of 20%. This surge can be attributed to enhanced connectivity through 5G and the establishment of submarine cables, facilitating a shift toward cloud-based infrastructure. Major global cloud providers, including Amazon Web Services (AWS), Microsoft, and Google, are significantly increasing their investments in Africa’s data centre operations. Microsoft’s upcoming self-built data centre in South Africa, expected to launch by 2027, is indicative of this trend, with additional projects planned in Kenya and Nigeria.
As cloud infrastructure advances in key regions such as Kenya, Nigeria, and Egypt, the growth of data centres is critical for Africa’s digital transformation, providing the secure and scalable solutions needed to meet the continent’s burgeoning demands. Recent contracts, like Huawei’s US$3 million deal with the United Bank for Africa (UBA) for 200 petabytes of cloud storage, highlight the shift from on-premises to colocation and managed cloud services, which offer enhanced reliability and scalability.
AI capabilities are also pushing for improvements in data centre design and functionality, as many existing facilities struggle to support high-performance computing needs. New data centres are increasingly incorporating advanced cooling technologies suited for AI and machine learning workloads, ensuring they are equipped to handle future demands.
Despite these advancements, the Africa data centre construction market faces challenges such as high construction costs and a shortage of skilled labour. The average cost to develop a 1MW data centre ranges from US$10 million to US$15 million in certain countries, such as Nigeria. However, solutions like modular designs are being adopted to enhance energy efficiency and scalability, allowing for gradual expansion as demand grows.
Geographically, South Africa leads the continent in data centre development, powered by significant investments from global providers. Egypt is emerging as a North African hub, bolstered by its strategic location and multiple submarine cables. Kenya is positioning itself as a data centre hub in East Africa, while Nigeria is attracting investments due to its status as Africa’s largest economy.
