The future of data centres in Africa is exciting. The African data centre market has grown exponentially over the past few years and continues to do so. This growth is being accelerated by the rapid digital transformation taking place across various sectors and the resulting need for increased digital infrastructure to support that demand.
To help you understand the key trends and developments in African markets over the past 12 months and provide predictions for the next 12-18 months. I will share valuable insights into market growth, investment trends, infrastructure developments, and the future outlook of the booming data centre market.
Introduction
The African data centre sector is rapidly evolving to meet the growing demand for digital services across the continent. Data centres are the foundation of a digital economy and are essential to support the growth of various industries such as finance, healthcare, e-commerce, and telecommunications. The increased demand for digital services across the continent and the recognition of the value of the data that this produces is driving development in areas that have not traditionally been considered as opportunities for investment.
Over the past 3 years, the market has accelerated with increasing investments across Africa. These investments go beyond the initial foothold in South Africa, which currently accounts for the majority of data centre space on the continent.
There is growing confidence in the market potential, especially with new subsea cables along the African coast driving data centre growth and increasing recognition of the importance of data sovereignty.
In this blog post, I summarise the key insights on the future of data centres in Africa. Covering growth drivers, key locations, infrastructure design factors, sustainability, renewable energy, connectivity, hyperscale demand, and the role of artificial intelligence (AI) workloads.
Market Growth Over the Past 12 Months
The African data centre market has seen continuous growth and acceleration over the past year. This can be attributed to the following key factors:
- Increasing investment – There is a growing confidence and attention of investors in African countries. Various companies are now building and investing in data centre projects across the continent.
- Spread beyond South Africa – While South Africa was the initial foothold, we now see data centre development across sub-Saharan Africa, in countries like Kenya, Morocco, Uganda, Mozambique, and Nigeria.
- Connectivity driving growth – The recent progress in fibre optic subsea cables along the African coast has given a huge boost to data centre growth and attracted interest from hyper-scale players.
- Untapped market potential – Africa presents a huge untapped market with a relatively underdeveloped digital infrastructure. The pandemic, coupled with the proliferation of smartphones, underscored the need for digital services and data centres to power technology.
- The value of data – Data sovereignty is another driver of local development based on the increasing recognition of the value of data and the importance of being in control of nationally important information.
- Acceleration to continue – The growth, interest and business opportunities will only continue as confidence builds across Africa. The next phase is extending network infrastructure beyond coastal regions into the continent’s interior.
Key Data Centre Locations
Data centre growth is distributed across Africa, especially in coastal regions. The Africa Data Centres Association (ADCA) has a great map highlighting the regions where centres are located.
In summary :
- North Africa – Morocco and Tunisia are emerging data centre hubs with growing interest.
- South Africa – A well-established base and initial foothold for expansion across Africa.
- East Africa – Kenya is a major growth area with massive development around Nairobi.
- West Africa – Countries like Nigeria, Ghana, and the Ivory Coast are seeing an increasing focus on investments and new projects.
- Beyond the coasts – The interior of Africa is the logical next phase for the expansion of data centre operations.
The key driver for location growth is the demand for digital services from businesses and governments across Africa. Data centre investments follow digital service demand.
Locations with connectivity, power, real estate, and other key resources will attract new data centre infrastructure.
Data Centre Design Considerations
Data centre development in Africa has to account for the continent’s diverse climates, temperatures, humidity, altitude and other environmental factors.
Key design considerations include:
- Sustainability – Businesses have a focus on being sustainable. Renewable power sources are crucial for sustainability and ESG credentials. Locations with solar, hydro, wind, etc. are ideal and available in many African regions.
- Power density – AI and HPC workloads require high-density, high-power designs that are very different from generic colocation.
- Cooling Requirements – The wide temperature and humidity variations across Africa require localised cooling designs and engineering solutions.
- Water usage – Data centres must be conscious of available water resources and conservation needs, particularly in areas where there is pressure on water supply.
- Energy reuse – There may be opportunities to use the heat generated and typically rejected by data centres to provide a cheap energy resource to local populations and businesses to give back and support local communities.
- IT equipment constraints – SLAs and IT equipment warranties limit the flexibility in data centre environmental designs. The designs are constrained by the equipment installed within the data centre.
- Customer needs – Hyperscale and co-location customers have very different data centre requirements.
In summary, one size does not fit all data centres, in Africa or elsewhere.
Sustainable data centre designs must be tailored to location, climate, customer needs, and workload requirements among other factors. Sustainability and renewable power sources are increasingly being prioritised wherever feasible.
Role of Renewable Energy
Africa has tremendous potential for renewable energy sources, especially solar energy, onshore wind power, and hydroelectricity. With the huge energy consumption of data centres, the data centre industry is beginning to recognise the availability and value of the renewable energy sources across Africa.
Conversations are happening with governments on renewable power investments. However, developing renewable energy infrastructure requires substantial capital and long timelines. I believe awareness does now exist across Africa, but funding and partnerships will dictate the pace of adoption.
There are some notable examples of large renewable energy projects for powering data centres, like the iXAfrica data centre in Nairobi, Kenya, using 100% renewable energy.
One of the largest benefits of renewable energy is that it cuts down on the reliance on Africa’s grid network, which is historically unreliable and can be a barrier to data centre investment.
Improving Pan-African Connectivity
While subsea cables have significantly improved connectivity and internet access along the African coasts, extending connectivity into the continent’s interior remains challenging. I see this as the next key phase of infrastructure development in Africa.
The scale of the continent and diverse geographies make interior connectivity expensive. Innovative solutions and substantial investments are necessary to connect central Africa beyond the coastal regions. However, national governments have a strong drive to improve their digital economy, infrastructure and services. So, I expect to see a continuing focus on improving pan-African connectivity.
Attracting Hyperscale Players
Hyperscale data centre players are showing increasing interest in Africa, encouraged by the new subsea cables and increased data centre investments. Their need for reliable, ideally renewable power makes a compelling case for self-sufficient campus-style data centre facilities.
Such campus data centres with on-site renewable power generation and the ability to use waste heat can benefit both hyperscale data centres and surrounding African communities.
This model will gain traction not just in Africa but globally. In addition, legacy constraints can be reduced in order to satisfy high-density hyperscale, HPC and AI workloads if power needs are met.
The Role of AI Workloads
AI workloads are certainly driving the data centre landscape in Africa and globally, requiring high-power density designs. The GPU-powered inference engines need abundant, cheap power, making locations like the Nordics and major renewable energy sites in Africa ideal.
However, it’s worth noting that not all AI applications need intensive processing power, and the majority of AI development work is not wide area latency-dependent.
So, AI workloads may be processed anywhere suitable power is available. This flexibility creates opportunities for African sites with cheap, readily available renewable power to host large AI-driven data centres.
The Road Ahead
Over the next 12-18 months, I expect to see continued growth across the African data centre industry:
- The pace of development will increase – Across new countries, led by continued interest from hyper scalers and large colocation operators.
- The geographic spread will continue – With an influx in investor interest, expanding beyond coastal regions deeper into Africa’s interior to connect currently under-served regions will become an increasing focus.
- Larger facilities – Data centres will scale above and beyond 10 megawatts as confidence and demand grows.
- Managing talent – Ensuring skilled workforce development and importantly, retention within the continent will be key as talent will invevitably get drawn overseas.
In summary, as digital services continue to drive data centre growth and demand , the sector’s future across the continent is promising. The opportunities are immense for international investors, operators, governments and local communities to participate in and benefit from this growth.
The Future of Data Centres in Africa
The African data centre market is showing tremendous growth already, with more potential set to be realised.
Africa is on the cusp of a thriving digital infrastructure boom. This will promote job creation, economic growth and investment opportunities across all African regions.
My predictions indicate that we can expect to see accelerating investments, geographic expansion, larger facilities, and innovative approaches in the coming months. There will be challenges related to connectivity, power, talent retention, and more. But the growth momentum is undeniable.
It’s an exciting time for the African data centre industry. Local and international data centre operators are well-positioned to benefit from this rapid growth market if they understand the unique regional conditions and opportunities.
Want To Discover More?
If you want to learn more about my thoughts on the future of data centres in Africa, then I’ll be at the Pan African Data Centres Exhibition & Conference.
The conference is being held from 16th to 17th July and I’ll be attending with the Future-tech team. If you would like to meet with us, then get in touch at the show or on our contact page here