African data centre boom expected to continue

Data centre growth in Africa has been strong and is expected to continue its current trajectory, led by markets in South Africa and Nigeria.

The Nigerian market is currently estimated at $400 million USD but is expected to pass $1.5 billion by 2026. This growth will be driven by the stated national goal of increasing cloud adoption by 30% across the nation.

Additionally, businesses in Nigeria are looking to incorporate more data-intensive technologies including IoT, AI, and data analytics, further increasing the demand for data centre services. High-performance server systems are expected to dominate new data centre investments, to meet the needs to optimize 5G deployment and IoT-related technology.

The need to meet demand quickly, with scalable solutions, has led to increasing interest in prefabricated and modular data centres in Africa. The first Tier IV prefabricated data centre in Africa was recently launched in Nigeria.

The focus on renewable energy across the data centre industry worldwide has affected the African data centre market as well. Nigeria has invested in renewable energy, particularly solar power. By 2025, 10% of the total electricity generated in Nigeria will be from renewable sources.

Read more: African DC operators plan more digital infrastructure investments

The South African data centre market is expected to grow quickly as well, passing $3 billion USD by 2026. This growth is driven by increased demand from public and private enterprises, due in part to the ongoing effects of the COVID-19 pandemic.

Cloud adoption is growing throughout South Africa, growing 25% per year and generating annual revenue of $1.5 billion USD by 2024. In response, Microsoft has opened cloud regions in Cape Town and Johannesburg; and Amazon Web Services (AWS) joined in 2020 with a cloud region in Cape Town as well.

Increasing demand and a relatively open investment environment is sparking global interest in the African data centre market among investors. However, there are some infrastructure concerns, including power instability. To provide reliable power to data centres, many owners and operators have invested in backup systems, such as diesel generators. Now, with the growth of solar power across the continent, a more environmentally positive solution may soon become available.