When ensuring success is a top priority, what should operators be most concerned about?
As increasing numbers of global players and hyperscalers hit the African data centre market, what can they do to ensure success? What are the key challenges, and how might they be addressed?
Africa’s data centre boom
The African data centre ecosystem is undergoing rapid transformation, driven by increased digitalisation, a burgeoning tech-savvy youth population, and growing demand for cloud computing and AI. “Africa’s digital economy is accelerating faster than any other region,” says Ben Seiler, Vice President Anglophone Africa, Schneider Electric. “This growth is pushing the need for data centre infrastructure to new heights, but the challenges are equally substantial.”
With multinational corporations and local players entering the market, strategic planning is critical to ensuring sustainable, efficient, and profitable data centre operations across the continent. “Data centres are the engine room of it all,” asserts Vertiv. “In the last few years, for example, we’ve gone from on-prem to cloud, propelled by the COVID-19 pandemic, and now we’ve got a hybrid of the two for sovereignty requirements.”
The importance of interconnection: global vs local
Highlighting the crucial role Internet Exchange Points (IXPs) play in fostering interconnection between networks and enabling a robust digital economy, Nurani Nimpuno, Head of Global Engagement at LINX, emphasised the benefits of partnerships and collaboration in new markets. She adds that “carrier neutral data centres play an important role in providing a neutral space for networks on the ground, and as an exchange point, we like to partner with data centres and other local players in new markets. IXPs are experts in interconnection and we come with the latest technology, but we never claim to be the expert on the ground in new locations – that’s where a good data centre partner is key.”
However, infrastructure challenges persist. Historically, Africa has faced issues with fibre infrastructure and cross-border connectivity. Many regions lack the necessary data centres, which hinders economic growth. While the entry of global players has in many ways started to solve these challenges and brought much-needed capital and expertise, it has also raised concerns about the balance between local and foreign investment, reducing local ownership and decision-making power.
“Many global players have entered the African market and struggled initially because they underestimated logistical and regulatory challenges,” confirms Selier. “Instead of building from scratch, they are acquiring established local companies to fast-track their expansion. We’re seeing issues from a design and delivery perspective. Some of the global players don’t understand the ‘African Way.’ For instance, they’re building a data centre and importing equipment, not realising that the location is landlocked.”
Milivoj Uzelac, CEO of Altron Modular, echoes this concern: “Local partnerships are crucial. Without understanding the on-the-ground realities of infrastructure, regulation, and even security concerns, global firms face significant hurdles in execution.” Selier points out that South Africa’s first co-location data centre, Teraco, was bought by Digital Realty, shifting control to Europe. Similarly, Equinix has acquired Medallion in Nigeria and MainOne, raising questions about local sovereignty.
Nimpuno advises that data sovereignty laws must foster growth rather than stifle it, advocating for policies that balance regulatory oversight with business-friendly frameworks. “I think we’re going to see some developments in Africa with groups of countries coming together, East Africa for example, which will align and agree on data sovereignty,” notes Vertiv. “People want that formality behind decision making and cross border interaction.”
Indeed, government support and policy frameworks play a crucial role in shaping the future of Africa’s data centre industry. Many industry experts argue that regulatory clarity, tax incentives, and streamlined business processes are essential for attracting investment. Countries like South Africa, Kenya, and Nigeria are leading the way with more proactive digital economy policies.
Approaching AI
AI workloads differ significantly from traditional data centre operations, requiring high-density computing, specialized processors, and low-latency data access. As AI begins to hit the scene in Africa, how are those in the value chain responding? “We are just starting to see the start of AI. For us, it’s important that we make sure we have enough capacity to manage all that extra traffic and data processing,” says Nimpuno.
According to Vertiv, AI is going to be incremental to the data centre: “We’re still going to see traditional growth in data centre demand, and on top of this will come AI demand, which will challenge the operators. To truly deploy AI, high power compute solutions will be needed. Air cooling alone will not cut it, and this will impact on the power train. Today, 20% of the facility is occupied by power equipment — but with AI, that will expand to 80%.”
Indeed, without advanced cooling solutions, such as liquid cooling, immersion cooling, or AI-driven thermal management systems, the increased heat output from AI-driven workloads could lead to higher operational costs and hardware degradation. “South Africa is effectively out of power,” reports Selier. “But the minute that we get everybody to move over to liquid cooling, we reduce the footprint, the power consumption, and water intake. It solves a lot of issues.”
Meanwhile, as AI ushers in a new level of heat generation, this excess heat poses a major challenge for cooling efficiency. “In Europe, heat reuse is a massive topic due to the natural climate. Here in Africa, though, there are fewer opportunities,” says Uzelac. Selier reports that “Africa should look to Singapore on things like vertical farming using waste heat, rather than Europe.”
A roadmap for success
The African data centre market is poised for significant growth. More acquisitions from global players are expected, alongside increased opportunities for local startups to scale their operations. One deciding factor when it comes to success is government support in infrastructure investment, streamlining regulations, and promoting public-private partnerships.
“We’ve seen all these international companies coming into South Africa, like Equinix and Vantage, as well as Microsoft with its announced US$1 billion investment,” explains Selier. “However, a huge divide remains; half the African population have no access to power, never mind internet connectivity. This must be addressed.”
Nimpuno adds that one key aspect of future strategies will be education and workforce development: “Africa’s young, tech-savvy population is an asset, but more training is needed to develop high-skilled engineers and IT professionals.”
Approaching the African data centre ecosystem requires a multifaceted strategy encompassing interconnection, localisation, sustainable energy, AI adaptation, and agile project management. “Africa is not just catching up; in some ways, it’s leaping ahead,” confirms Seiler. “We have a unique opportunity to build the data centre industry the right way from the start — efficient, sustainable, and tailored to our needs.”
