Ilana van Schalkwyk, Sector Lead for Information and Communications Technology at Nedbank Corporate and Investment Banking.

Africa’s digital transformation is no longer a distant vision – it’s happening now, with data centres at the heart of this evolution. 

As these centres drive innovation and economic growth across the continent, they are positioning Africa as a formidable force in the global digital landscape, writes Ilana van Schalkwyk, Sector Lead for Information and Communications Technology at Nedbank Corporate and Investment Banking.

Africa is not just on the brink of a digital revolution – it is actively leading the charge, evidenced by the investments flowing into data centres. These facilities are not just infrastructure but the beating heart of an emerging digital economy. 

The African data centre market is projected to reach about R123 billion by the end of 2024, and is expected to grow to around R174 billion by 2029 . This growth isn’t just a statistic; it’s a clear signal that the continent is positioning itself as a global player in the digital arena.

To understand the significance of this growth, we must first consider what modern data centres represent. No longer are they simply places to store information; they are now dynamic hubs where technologies like artificial intelligence (AI), machine learning, and high-performance computing converge. 

These technologies enable real-time data processing on a scale that was previously unimaginable. South Africa, in particular, has emerged as a leader in this space, capturing a large share of the continent’s market. 

This leadership didn’t happen by accident; it’s the result of deliberate investments in infrastructure, a skilled workforce and a steadfast commitment to sustainability.

However, the story of Africa’s data centre boom is not without its challenges. As these facilities expand, they must navigate the continent’s unique infrastructure and energy landscape. 

The demand for reliable power and efficient cooling systems is relentless. Without innovative solutions, this rapid expansion could stall. Renewable energy sources like solar power offer hope, but their implementation is far from straightforward. 

Large land requirements for solar farms and the complexities of securing land and power are hurdles that cannot be ignored. Moreover, the lack of standardised cooling technologies across the continent adds another layer of complexity to building energy-efficient data centres.

Yet, these challenges also present opportunities, particularly in markets outside South Africa. Thanks to their growing populations and rising demand for local data processing and storage, countries like Nigeria, Kenya and Tanzania are becoming increasingly attractive to investors. 

However, these opportunities come with their own set of challenges, from navigating regulatory barriers to overcoming infrastructure limitations. Each market requires a tailored approach to unlock its full potential.

As the demand for digital services continues to rise, the pressure on data centres to expand intensifies. This expansion must be balanced with a commitment to sustainability. 

The industry finds itself at a crossroads, where it must integrate new technologies that reduce environmental impact while meeting the ever-growing demand for data processing. 

AI is driving much of this demand, requiring vast computational power that, in turn, increases energy consumption. To meet these challenges, many data centres are turning to renewable energy and advanced cooling systems. 

But the dream of a fully sustainable, net-zero data centre remains just that – a dream. The reality is that the power demands of these facilities are immense, and the path to carbon neutrality is fraught with complexities.

Despite these challenges, the investment in data centres is fundamentally an investment in Africa’s future. These facilities are expensive to build and maintain, but their value to the digital economy is immeasurable. 

According to the business news publication Africa Business Communities, the African data centre market is expected to grow at a compound annual growth rate (CAGR) of 7.18% from 2023 to 2029, driven largely by the increasing adoption of cloud services and advancements in digital infrastructure .

Looking ahead, the future of data centres in Africa is closely tied to the continent’s broader digital ambitions. As smart-city initiatives gain momentum, data storage and processing demand will only increase. 

These smart cities will rely on local, edge data centres to manage the vast amounts of data generated by internet of things devices, enhancing both connectivity and computational power. 

However, Africa must address several critical challenges to fully realise this potential. Simplified regulatory frameworks, secured energy availability, and established technological standards are necessary to build a resilient digital infrastructure.

In many ways, Africa’s data centre landscape is at a turning point. Driven by technology improvements, strategic investments, and an insatiable demand for digital services, the continent stands on the brink of something extraordinary. 

South Africa has set the pace, but the rest of the continent is not far behind. As Africa continues to embrace digital transformation, data centres will become even more crucial, laying the groundwork for the continent’s digital future. 

By focusing on growth, sustainability and innovation, Africa is well on its way to becoming a leader in the global digital economy.

Bibliography

1 and 2 reference points. WSP on capitalizing Africa’s data centre Boom (available from https://africabusinesscommunities.com/tech-24/wsp-on-capitalizing-africa%E2%80%99s-data-centre-boom/)