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Africa’s Data Centre Market Projected to Reach $7bn by 2028

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By Divij Ruparelia

Africa’s data centre market is growing at an unprecedented rate, driven by increasing internet penetration, rapid adoption of cloud computing, and soaring demand for digital services. As the continent embraces the digital revolution, the data centre market is projected to reach over $7 billion by 2028, with an annual growth rate (CAGR 2024-2028) of 7%. This growth is not only transforming Africa’s digital landscape but also presenting significant opportunities for investors, technology companies, and local businesses.

The Rise of Internet Users and Cloud Adoption

 There has been a significant surge in internet usage across Africa, with the number of users soaring to approximately 645 million in 2023, representing a remarkable 3.5-fold increase compared to 2014 figures. The upward trend is anticipated to persist, with estimates suggesting that by 2029, the African continent will boast an impressive online population exceeding 1.1 billion connected individuals. This rapid growth, coupled with the COVID-19 pandemic accelerating the shift to cloud computing and remote work, has intensified the need for robust data centre infrastructure. As more businesses and individuals rely on digital services, the demand for data storage, processing, and transmission continues to soar, fuelling the expansion of the African data centre market.

Navigating Challenges and Seizing Opportunities

The growth of data centres in Africa presents immense potential, but it also comes with significant challenges. Many current data centres are concentrated in crowded markets where supply outpaces short-term demand. These facilities, often built to hyperscaler specifications to suit the requirements of tech giants like Meta and Amazon, are prohibitively expensive and over-specced for local enterprises and SMEs. The costs associated with these hyper-scaler data centres are simply too high for the vast majority of African businesses, rendering them inaccessible and impractical. Consequently, the largest data centre providers find themselves competing for a limited number of hyperscalers, leading to revenue traction struggles.

To overcome this challenge, a plethora of local providers offering a true local product-market fit with appropriately sized data centres have emerged and are now uniquely well-positioned for success. These local providers understand the financial constraints and specific needs of African businesses and can offer tailored solutions at more affordable prices. By catering to the budgets and requirements of local enterprises and SMEs, these providers can tap into a much broader customer base and achieve more sustainable growth. Moreover, strategic positioning within core data corridors, connecting landlocked countries to sub-sea fibre cables and housing internet exchanges, presents a lucrative market opportunity for these local providers. This approach not only makes data centre services more accessible to African businesses but also contributes to the overall digital growth and transformation of the continent.

Innovating Amidst Power Instability

One of the most significant challenges facing African data centres is the issue of intermittent power and unreliable electricity supply. Many countries in Africa experience frequent power outages, which can be detrimental to the operation of data centres that rely on a constant and stable power supply.

To mitigate this issue, data centre providers are investing in backup power solutions, such as uninterruptible power supply (UPS) systems and diesel generators. However, these solutions can be expensive to operate and maintain, and they also contribute to carbon emissions. Some data centre providers are exploring alternative power sources, such as solar and wind energy, to reduce their reliance on the grid and improve their sustainability.

Another approach is to locate data centres in areas with more reliable power infrastructure, such as industrial zones or near power generation facilities. This strategy can help to minimise the risk of power outages and ensure a more stable power supply for the data centre.

Data Centres at the Crossroads of Connectivity

The growth of Africa’s data centre market is also contingent upon the availability and accessibility of high-speed internet connectivity. Undersea cables play a crucial role in connecting Africa to the global internet, and data centres that are located near these cables can benefit from faster and more reliable connectivity.

Currently, several major undersea cable systems connect Africa to the rest of the world, including the SEA-ME-WE 5, the Africa Coast to Europe (ACE), and the South Atlantic Cable System (SACS). These cables land at various points along the African coastline, such as Cape Town, Mombasa, and Djibouti, and provide high-capacity connectivity to the continent.

Data centre providers are strategically positioning their facilities near these landing points to take advantage of the available connectivity. For example, Wingu Africa with data centres in Djibouti has connections to SMW-3, EIG, EASSy, AAE-1, SEA-ME-WE-5, and Aden-Djibouti and Liquid Intelligent Technologies has established a data centre in Cape Town, which is near several undersea cable landing stations, including the WACS, SAT-3/WASC, and ACE cables.

In addition to undersea cables, the growth of Africa’s data centre market is also dependent on the availability of terrestrial fibre networks. These networks connect data centres to end-users and enable the delivery of high-speed internet and other digital services.

The development of fibre networks in Africa has been uneven, with some countries having more extensive coverage than others. However, there are several initiatives underway to expand fibre coverage across the continent, such as the pan-African fibre network being built by Liquid Intelligent Technologies.

Data centre providers are also investing in their fibre networks to improve connectivity and reduce their reliance on third-party providers. For example, Raxio’s 500-kilometre fibre network in Uganda which connects its data centres to key locations across the country.

Growth Contingent upon FTTx

The availability of fibre-to-the-x (FTTx) networks is critical for driving the adoption of digital services and applications, such as e-commerce, video streaming, and remote work. As more people and businesses in Africa gain access to high-speed internet through FTTx, the demand for data centre services is expected to increase.

However, the deployment of FTTx networks in Africa has been limited, with only a small percentage of the population currently having access to fibre connectivity. This is due to several factors, including the high cost of infrastructure development, regulatory barriers, and limited investment.

To address this challenge, governments and private sector players are investing in initiatives to expand FTTx coverage across the continent and data centre providers are also partnering with FTTx providers to improve connectivity and reach a wider customer base.

Embracing Sustainability and Green Energy Solutions

The issue of reliable power supply remains a persistent challenge for the African data centre market. Many data centres still grapple with fundamental power issues and remain heavily dependent on diesel generators due to grid unreliability. In response, data centre providers that prioritise renewable and sustainable energy solutions are likely to build company value faster and have ultimately more medium-term appeal for investors and acquirers.

Teraco are making significant investments in green data centres powered by renewable energy and employing advanced cooling technologies to reduce energy consumption. In 2021, Teraco raised $680 million in debt funding to finance what they claim will be some of Africa’s largest and most environmentally friendly data centres, adding 100MW in capacity, including a utility-scale renewable energy site. This move reflects the growing importance of sustainability in the data centre industry and the need for operators to align their practices with global ESG standards, which are increasingly becoming a fundamental requirement for many investors and strategics in the sector.

Other data centre providers in Africa are also exploring innovative solutions to address the power challenge. For example, Africa Data Centres, part of Cassava Technologies has announced plans to power its facilities with renewable energy, with a target of achieving carbon neutrality by 2030.

Key Players and Investment Landscape

The African data centre market is populated by a diverse array of players, from local start-ups to global technology giants. As the market has matured over the past three years, consolidation and international strategic interest have become more prevalent, with global entrants such as Digital Bridge and Equinix making their mark.

Equinix, a global leader in data centre services, has established a strong presence in Africa, while Teraco, majority acquired by Digital Bridge in 2022, continues to expand its footprint. Raxio Data Centre, having raised up to $170 million in debt and $46 million in equity financing in 2023, is another key player driving growth in the region. Wingu Africa, supported byAfrica Capitalworks, with data centres built or under construction in Djibouti, Somaliland, Ethiopia, and Tanzania, and IX Africa, supported by Helios Investment Partners, are also making significant contributions to the market’s development.

The influx of over $2 billion in funding for African data centre operators in 2021 alone underscores the immense growth potential and investor confidence in this sector. This surge in investment is driven by the recognition of the critical role data centres play in enabling digital transformation, supporting economic growth, and fostering innovation across the continent.

Emerging Markets and Future Growth

While Johannesburg, Cape Town, Lagos, and Nairobi currently have the most cumulative MW of leased data centre capacity in Africa, a 451 Research report from June 2023 highlights that the fastest-growing markets are Kinshasa, Luanda, Cairo, and Dar es Salaam, with 2022-25 CAGRs of 233%, 64%, 48%, and 45%, respectively. There is hardly anywhere else where such sustained growth is available in what otherwise is a globally maturing market.

This highlights the broadening of the market across the continent, with significant growth potential in previously underserved regions. These emerging markets present a unique opportunity for data centre operators to establish a presence early and capitalise on the growing demand for digital services in these areas. The rise of edge computing, the adoption of 5G networks, and the growing importance of data sovereignty will further drive the demand for localised data centre infrastructure across Africa.

Unlocking Value in the African Data Centre Market

The African data centre market is in the midst of a remarkable growth phase, presenting a wealth of opportunities for investors, technology companies, and local businesses. As local and international players continue to invest in the development of state-of-the-art data centres across the continent, Africa is poised to become a major player in the global digital economy.

The key to unlocking value in this market lies in addressing the unique challenges and opportunities present in Africa. Providers that offer appropriately sized data centres with a true local product-market fit, prioritise renewable energy solutions, and strategically position themselves within core data corridors will be well-positioned for success. As consolidation continues over the next three years, operators that achieve scale and market relevance will be best equipped to capitalise on the $7 billion+ market potential.

By investing in the right players, partnering with local businesses, and embracing sustainable practices, stakeholders can tap into the immense growth potential of this sector and play a pivotal role in shaping Africa’s digital future. As the continent continues to embrace the digital revolution, the African data centre market is set to become a key driver of economic growth, innovation, and social progress.

Divij Ruparelia is the COO at DAI Magister

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Nigeria’s Bold Strides Towards a Sustainable Future

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Alex Oware YP4T

By Alex Oware

President Bola Tinubu has firmly established Nigeria as a proactive and visionary leader in the global pursuit of climate action and sustainable development. Recognising that environmental stewardship is intrinsically linked to economic prosperity, his administration has moved beyond viewing climate change as a mere ecological concern, positioning it instead as a pivotal economic opportunity ripe for exploration and investment.

President Tinubu’s emphatic pronouncements at the 2025 Abu Dhabi Sustainability Week and during a high-level virtual dialogue underscored Nigeria’s unwavering commitment to international collaboration, emphasising the critical need for a unified global response to the escalating climate crisis. He astutely highlighted that the realisation of a truly sustainable future necessitates robust global interconnectedness and a shared sense of responsibility amongst all nations.

Nigeria’s comprehensive strategy for tackling the multifaceted challenges of climate change rests upon three fundamental pillars: a decisive shift towards clean energy transition, the building of robust climate resilience, and an overarching commitment to sustainable development. To translate these core principles into tangible realities, the current administration is actively implementing a range of key initiatives designed to wean the nation off its reliance on traditional fossil fuels.

A significant aspect of this endeavor involves the substantial expansion of infrastructure to support the widespread adoption of Compressed Natural Gas (CNG) and electric vehicles. Simultaneously, the government is strategically focusing on harnessing Nigeria’s abundant solid mineral resources to provide crucial materials for the burgeoning green energy sector.

Complementing these efforts are the implementation of climate-smart agricultural practices, aimed at simultaneously enhancing national food security and minimising detrimental environmental impacts.

Furthermore, the newly introduced National Clean Cooking Policy seeks to promote clean energy solutions at the household level, promising significant environmental, health, and socio-economic benefits for Nigerian citizens.

These ambitious endeavors are meticulously designed to deliver palpable value and positive impact directly to the lives of Nigerians. The diversification of energy sources holds the promise of cleaner air and a significantly healthier environment for communities across the nation.

The active promotion of CNG as a viable alternative fuel is strategically aimed at mitigating the economic and social hardships that have arisen from the removal of fuel subsidies, offering a more affordable and sustainable energy option for transportation and domestic use. The widespread adoption of climate-smart agriculture is paramount for bolstering food security, ensuring a stable and reliable food supply, and safeguarding vulnerable local communities from the increasingly severe adverse effects of climate change, such as droughts and floods.

Moreover, the deliberate expansion of the green energy sector is projected to generate a wealth of new employment opportunities and empower local entrepreneurs, particularly in rural communities that are gaining access to reliable and sustainable electricity for the first time.

In a demonstrably bold move that underscores the administration’s commitment to these overarching goals, President Tinubu’s government has put forward a significant N10 billion solar power project specifically for the Aso Rock Presidential Villa. This ambitious initiative is presented as a crucial step towards establishing a more sustainable and dependable energy future for the entire nation, starting from the highest levels of governance.

Proponents of the project persuasively argue that it aligns seamlessly with global best practices, drawing parallels with the increasing adoption of solar energy in key government institutions worldwide. The Energy Commission of Nigeria (ECN) has vigorously defended the project, asserting that it is fully in line with President Tinubu’s broader reforms aimed at fundamentally transforming Nigeria’s energy landscape and decisively tackling the persistent and crippling energy debt crisis.

The ECN further emphasises that solar energy offers inherent efficiency, provides a crucial shield for Nigerians against the volatility of rising tariffs on conventional energy sources, and has the potential to significantly ease the immense pressure currently burdening the national electricity grid.

While the project has understandably sparked public debate and scrutiny regarding its substantial cost and prioritisation in the face of other pressing national needs, the government strategically positions it as an innovative approach that demonstrates leadership by example and a profound commitment to integrating clean energy solutions at the very apex of Nigerian governance.

Beyond these crucial domestic initiatives, President Tinubu has actively and strategically sought robust international collaboration and support for Africa’s complex transition towards a green economy, fully acknowledging that the necessary investments are inherently capital-intensive.

Nigeria has already demonstrated commendable leadership on the continental stage by being the first African nation to successfully launch Sovereign Green Bonds, specifically designed to finance environmentally sustainable projects across various sectors.

Furthermore, the country is actively in the process of developing a comprehensive Global Climate Change Investment Fund, with the primary aim of attracting substantial further investment in critical green infrastructure and innovative clean energy initiatives.

Nigeria remains steadfast in its commitment to achieving net-zero greenhouse gas emissions by the ambitious target year of 2060 and is actively engaged in the crucial process of updating its Nationally Determined Contributions (NDCs) under the esteemed UN Framework Convention on Climate Change.

The recent finalisation of the Nigeria Carbon Market Activation Policy in March 2025 is projected to unlock a substantial potential of up to $2.5 billion in valuable carbon credit investments by the pivotal year of 2030. This influx of capital is expected to further bolster climate-aligned economic growth and create new avenues for sustainable development.

Moreover, Nigeria is actively collaborating with various United Nations agencies to develop a comprehensive guideline for a just transition towards a fully decarbonised economy. This crucial collaboration ensures that the inevitable shift towards clean energy and climate-resilient solutions is implemented in a manner that leaves no community or economic sector behind, prioritising the creation of green jobs, the development of essential skills, and comprehensive capacity-building initiatives across the nation.

President Tinubu’s overarching strategy underscores a holistic and integrated approach that seamlessly weaves climate action into Nigeria’s broader development agenda, recognising it not as a separate concern but as a fundamental strategic imperative for sustained economic growth and comprehensive national transformation.

By diligently pursuing these comprehensive and interconnected strategies, Nigeria aims not only to effectively address the urgent and pressing challenges posed by climate change but also to unlock significant and lasting economic and social benefits for all its citizens, paving a clear and sustainable pathway towards a resilient, equitable, and prosperous future for generations to come.

Alex Oware is the Regional Director for YP4T

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Navigating the Maze: Solutions for Nigeria’s Flourishing Foodtech Industry

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Diana Tenebe food security challenges in Nigeria

By Diana Tenebe

Nigeria’s foodtech sector holds immense promise to transform our nation’s food production, distribution, and consumption systems. However, this burgeoning industry currently navigates a complex maze of challenges that could significantly hinder its progress.

While innovation and entrepreneurial drive are abundant, a confluence of infrastructural deficits, economic headwinds, technological disparities, and logistical complexities casts a shadow on the sector’s long-term viability.

Understanding and addressing these multifaceted hurdles is paramount for foodtech companies aspiring to thrive and contribute meaningfully to Nigeria’s food security.

One of the most significant impediments to the foodtech sector’s advancement is Nigeria’s persistent infrastructural weaknesses. The unreliable power supply, a well-known constraint for businesses nationwide, directly threatens food preservation, increasing spoilage risks and driving up operational costs for companies reliant on refrigeration and consistent processing.

Similarly, the often-deteriorated state of our road networks complicates logistics and transportation, hindering the efficient movement of goods from farms to consumers and across the supply chain.

Furthermore, limited access to clean water exacerbates operational challenges, particularly for maintaining food processing and hygiene standards. Collectively, these infrastructural shortcomings inflate operational expenses and introduce vulnerabilities throughout the food supply chain.

Economic constraints add another layer of intricacy. Fluctuations in currency exchange rates create instability in pricing and procurement, especially for businesses dealing with imported technologies or ingredients. Persistent inflation erodes consumer purchasing power and increases the cost of essential inputs, squeezing profit margins for startups.

Moreover, limited access to credit and investment capital makes it difficult for emerging foodtech companies to secure the necessary funding to invest in crucial technology, infrastructure, and expansion efforts. This financial constraint can stifle innovation and prevent promising ventures from reaching their full potential.

The digital divide also poses a unique challenge for foodtech companies aiming to leverage online platforms and digital solutions. While mobile phone usage is widespread in Nigeria, disparities in digital literacy and access to reliable internet connectivity can restrict the widespread adoption of online food ordering and delivery services, particularly in rural and underserved communities. This necessitates creative and inclusive strategies to bridge the digital gap and reach a broader consumer base.

Inefficiencies within the supply chain represent a critical bottleneck in the Nigerian food system. Fragmented agricultural supply chains, characterised by numerous intermediaries and a lack of transparency, contribute to alarmingly high post-harvest losses.

Inadequate storage facilities and inefficient transportation infrastructure further compound these issues, leading to significant waste and price volatility. Addressing these systemic weaknesses is crucial for ensuring a stable and affordable food supply for all Nigerians.

Navigating Nigeria’s regulatory landscape can also be a daunting task for foodtech businesses. The presence of multiple regulatory agencies, coupled with often bureaucratic and time-consuming processes for obtaining licenses and permits, can create significant hurdles for startups. Clear, consistent, and streamlined processes within the regulatory framework are essential to foster a more enabling environment for innovation and growth.

Building consumer trust and acceptance for new food technologies requires overcoming inherent skepticism and unfamiliarity. Concerns regarding food safety, quality, and the security of online transactions can hinder the adoption of novel food products and digital platforms. Transparent communication, robust quality control measures, and consistent consumer engagement are vital for building confidence and fostering widespread acceptance.

Finally, a notable talent gap exists within the Nigerian foodtech ecosystem. A shortage of professionals possessing specialised skills in food science, technology, business management, and logistics can limit the growth and innovation capacity of companies in this sector. Addressing this skills deficit through targeted training and development initiatives is crucial for long-term success.

Despite these significant challenges, promising pathways forward can be forged through innovative and context-specific approaches. Investing in localised infrastructure solutions, such as independent power generation and efficient localised logistics networks, can mitigate the impact of broader infrastructural deficiencies.

Exploring diverse funding avenues beyond traditional banking, including angel investors, government grants, crowdfunding, and revenue-based financing, can alleviate financial constraints.

Adapting to the digital divide by leveraging basic mobile technology and employing offline strategies like local agent networks can expand reach and inclusivity. Building resilient supply chains through direct farmer relationships, investing in aggregation centres, and utilising technology for farm management offer tangible solutions to logistical inefficiencies.

Proactive engagement with regulatory bodies and advocating for clearer, more supportive policies are crucial for navigating the regulatory landscape effectively. Building consumer trust necessitates transparent sourcing practices, clear communication about product benefits and safety, and active engagement with consumer feedback.

Finally, investing in talent development through collaborations with educational institutions and in-house training programs can bridge the critical skills gap.

Foodstuff Store is emerging as a business with a clear vision to directly confront several of these challenges. We are actively developing a decentralised network of businesses supported by strategically located distribution hubs across target states. This approach will directly address the limitations imposed by poor road networks, ensuring more localised access to our food products.

Furthermore, the establishment of regional storage facilities, including a state-of-the-art solar-powered cold storage, directly tackles infrastructural deficiencies related to food preservation and ensuring a consistent supply.

Foodstuff Store’s ambition for end-to-end management of the food supply chain, encompassing in-house production, direct sourcing, advanced storage solutions, and efficient distribution, offers a powerful solution to existing supply chain inefficiencies.

This integrated approach promises enhanced quality control, significant reductions in post-harvest losses, and a more reliable supply of both perishable and non-perishable goods for our customers.

Our aspiration to become the “Amazon for Food Products” is a clear and ambitious goal underpinned by a technology-driven approach to all aspects of our operational management. Foodstuff Store’s vision underscores a business model strategically designed to overcome significant hurdles within the Nigerian foodtech sector, offering a beacon of potential and a pathway to a more secure and efficient food system in a challenging yet remarkably promising landscape.

By Diana Tenebe is the Chief Operating Officer of Foodstuff Store

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President’s Katsina State Visit Exposes Disconnect from People’s Needs

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tinubu in katsina

By Abba Dukawa

The recent visit by the President Bola Tinubu to Katsina State has sparked concerns about the disconnect between the government’s priorities and the people’s needs. The visit exposed the hypocritical approach to the need of their people, states and the northern Nigeria as whole. The quality of leadership in the region has been questioned, with allegations of self serving  interest, ineptitude, and a lack of vision.

This is in spite of the fact that northern Nigeria as a whole faces numerous challenges that threaten its stability and development. Some of the key issues include insecurity, poverty, education, economic hardship, inequality and social and cultural challenges. The visit has been seen as an opportunity missed to engage with the state’s residents, listen to their concerns, and chart a way forward for development.

While the visit was marked by displays of pageantry and entertainment, the state’s pressing issues such as insecurity, poverty, and economic hardship, seemed to take a backseat.  Critics argue that the government’s focus on superficial events rather than addressing the root causes of the state’s challenges is a clear indication of a disconnect from the people’s needs.

The introduction of Rarara’s wife to the President by the Katsina State Governor, contravening cultural and religious norms, raise questions about leaders’ priorities and values.

Current leaders in the north seem more focused on personal interests and political survival than advocating for the northern Nigeria improvement.

Regardless of the challenges in the region the Governors  keep  praise for the President’s economic reforms, notwithstanding the region’s struggles, is concerning. economic reforms should lift people out of poverty, create jobs, and stimulate growth. If not yielding tangible benefits, they need reevaluation.

The north needs leaders prioritizing regional development and working towards a brighter future. Leaders understanding our region’s problems and committed to tackling them head-on are crucial. It’s time for a shift in approach, prioritizing people’s needs over personal interests.

As we move forward, we must demand more from our leaders. We need leaders who will stand up for the north and work tirelessly to find solutions. Anything less is a disservice to the region and its people.

We need leaders who cultivate a culture of good governance, prioritizing accountability and transparency to address insecurity and promote development.

The north needs a visionary leaders who prioritize all citizens’ needs, regardless of tribe or religion, are crucial for unity and stability.

Leaders who accelerate economic development, create jobs, and provide essential services like education and healthcare can reduce poverty and insecurity.

We require leaders who will combat corruption and promote social justice, reducing inequality and fostering stability.

In northern Nigeria, effective security reforms are necessary, including modernizing security agencies, enhancing intelligence gathering, and addressing insecurity’s root causes to ensure public safety.

To bridge the gap between the government and the people, there is a need for leaders who understand the intricacies of the state’s problems and are committed to tackling them head-on. By prioritizing the people’s needs and working towards sustainable development, the government can build trust and foster a sense of ownership among its citizens

May God guide Nigeria towards true development and prosperity.

Dukawa, a concerned Nigerian, can be reached at abbahydukawa@gmail.com

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