How Africa Can Position Itself As Global Data Centre Investment Hub

 

By Kashifu Inuwa Abdullahi

With the right mix of infrastructure, regulation, and investment, Africa can become a globally competitive data centre destination.

Africa stands at a decisive inflection point in the global digital economy. Despite representing more than 17 per cent of the world’s population, the continent accounts for less than 2 per cent of global colocation data centre capacity. However, this imbalance is poised to shift dramatically. Africa’s accelerating digital transformation, driven by mobile penetration, e-governance, fintech growth, and AI adoption, is generating exponential demand for local data hosting, processing, and connectivity.

With the right mix of infrastructure, regulation, and investment, Africa can become a globally competitive data centre destination. Countries like Nigeria, Kenya, Morocco, and South Africa are already laying the groundwork. But a coordinated effort—anchored by national agencies, regional frameworks, and private sector partners—will be needed to unlock Africa’s potential as a data infrastructure powerhouse.

Laying The Foundation: Infrastructure That Competes Globally

A successful data centre ecosystem depends on three core enablers: reliable digital connectivity, affordable and stable energy, and infrastructure-grade real estate. Africa has made major strides on all fronts.

Broadband penetration across the continent has risen, supported by transformational subsea cable projects such as Google’s Equiano and Meta’s 2Africa. These systems are slashing latency and bandwidth costs while enhancing interconnectivity between African markets and global networks. 5G networks are now live in 18 African countries, from Nigeria to Ethiopia, expanding demand for edge and hyperscale data facilities.

On the energy front, Africa holds over 10 terawatts of solar potential. Countries like Morocco and South Africa are already powering data centres with renewables, while Nigeria’s Energy Transition Plan prioritises hybrid and clean energy investments in digital zones. Renewable power doesn’t just offer sustainability—it offers reliability in energy-constrained markets.

Most importantly, governments are increasingly embracing public-private partnerships to address infrastructure gaps. These collaborations are helping unlock development-ready sites for data centre investors and enabling infrastructure projects that serve long-term digital growth.

The Nigerian Example: Policy As A Catalyst For Investment

Among the countries leading the charge, Nigeria provides a compelling case study of how policy leadership can drive infrastructure investment. Through the National Information Technology Development Agency (NITDA), Nigeria has implemented a comprehensive framework to promote domestic data centre capacity and attract hyperscale players.

At the core of NITDA’s approach is its Cloud First Policy, which mandates that public institutions prioritise cloud computing and local hosting of sensitive government data. The policy is underpinned by a detailed data classification framework that delineates what data must be stored within national borders. This localisation mandate not only reinforces Nigeria’s digital sovereignty—it ensures consistent demand for in-country hosting solutions.

These regulatory moves are already catalysing results. In 2025, NITDA announced a strategic collaboration with Google Cloud to explore hyperscale data infrastructure development in Nigeria. Local providers like Rack Centre and Kasi Cloud have also launched major expansion projects, responding to surging enterprise and public sector demand.

Nigeria’s policy clarity has become a key differentiator in a region where legal uncertainty often deters global investment. This lesson is critical: when governments offer a stable, transparent framework for data regulation and incentivise infrastructure buildout, international capital follows.

Making The Investment Case: Demand And Diversification

The demand story is equally compelling. Africa’s data consumption is expected to rise fivefold by 2029. Fintech, digital identity systems, e-commerce platforms, and health tech applications all require vast computing and storage capacity close to end users.

Nigeria alone is projected to reach 279.4 megawatts (MW) of data centre capacity by 2030, growing at a CAGR of 15.4 per cent. Colocation revenue is expected to hit $578 million during the same period, growing at over 18 per cent annually. Comparable markets like Kenya and Ghana are also seeing rapid acceleration, particularly in fintech and public sector digitisation.

Moreover, Africa’s AI ambitions will only intensify this need. From chatbot-based citizen services to precision agriculture, governments are beginning to integrate AI in critical service delivery. But AI applications are data-intensive—and they require localised, high-performance computing infrastructure.

NITDA’s efforts to deploy AI for public sector use cases—including automated compliance monitoring and digital identity verification—provide a replicable model for governments across the continent.

Strengthening The Argument: Data Sovereignty And Security

Data sovereignty is more than a legal concern—it’s a strategic imperative. As cyber threats grow more sophisticated and geopolitical competition intensifies around digital infrastructure, the ability to store and protect sensitive data domestically is a matter of national security.

Africa cannot afford to outsource its data governance. Localised storage enhances transparency, ensures compliance with domestic law, and increases trust among citizens and businesses. Governments that build secure, sovereign data environments will be best positioned to host mission-critical applications and attract enterprise clients.

Nigeria’s approach—codifying classification rules and requiring sensitive data to remain onshore—demonstrates that localisation can go hand-in-hand with innovation and investment.

A Call To Action For Policymakers And Investors

Africa has the ingredients. What it needs now is coordination and confidence. Governments must continue to harmonise regulatory frameworks, offer incentives for local infrastructure development, and prioritise renewable energy access for digital hubs. Regional bodies like Smart Africa and the African Union can help establish common data standards and interoperability rules.

Investors should act now. Early movers will gain first access to strategic markets and shape the design of the continent’s digital backbone. And global tech companies must think beyond cloud service delivery. By partnering with local regulators, funding physical infrastructure, and helping shape inclusive data policies, they can play a defining role in Africa’s digital future.

Africa is no longer on the periphery of the digital economy. It is becoming a frontrunner. The next chapter in global cloud and data infrastructure won’t be written in Silicon Valley or Singapore. It will be built in Lagos, Nairobi, Accra, and beyond.

 

Kashifu Inuwa Abdullahi, CCIE, is Nigeria’s Chief Information Technology Officer at the National Information Technology Development Agency (NITDA)