Demand for data centres across Africa is projected to surge between 3.5 and 5.5 times its current levels by the end of the decade, according to a new report published by McKinsey & Company.
The report, titled “Building Data Centres for Africa’s Unique Market Dynamics,” highlights how accelerating digital transformation initiatives in both the public and private sectors, coupled with the increasing adoption of data-intensive technologies such as artificial intelligence and cloud computing, are fuelling this growth.
Market Capacity and Investment
Currently, Africa’s data centre capacity stands at roughly 0.4 gigawatts, primarily concentrated in five key markets: Egypt, Kenya, Morocco, Nigeria, and South Africa. The report estimates that capacity will rise to between 1.5 and 2.2 gigawatts by 2030, necessitating investments between US$10 billion and US$20 billion. The expansion is expected to generate between US$20 billion and US$30 billion in revenue across the entire value chain, underscoring the significant untapped potential given the continent’s modest starting point.
Despite this promising outlook, Africa’s existing data centre infrastructure remains far below the level of developed markets, such as France, which alone boasted around 800 megawatts (0.8 GW) of capacity in 2024. This gap highlights both the scale of the challenge and the opportunity for growth, with the continent’s early-stage infrastructure offering considerable room for expansion.
AI as a Catalyst for Growth
A key driver of this growth is the increasing integration of artificial intelligence across various industries. McKinsey reports that approximately 40% of African businesses are already experimenting with AI, and wider deployment could unlock between US$60 billion and US$100 billion in value, particularly in sectors such as retail, telecommunications, consumer goods, banking, and mining. Additionally, government-led digitization programs are expected to play a crucial role, as many countries undertake efforts to digitize manual processes and boost local data storage, computing power, and networking capacity. Initiatives like the World Bank’s “Digital Economy for Africa” (DE4A), which has launched around 70 projects across 37 countries since 2019, exemplify this momentum.
The Cloud Migration Trend
The migration to cloud computing is another significant factor fuelling demand. Large African enterprises anticipate an increase of over 18 percentage points in their cloud workloads by 2030. This trend is supported by the continent’s predominantly young, tech-savvy population and the rapid adoption of smartphones. Sectors such as technology, media, and telecommunications are leading the cloud adoption wave, with approximately 83% of workloads already in the cloud and a fast pace of transitioning to cloud-native architectures. The financial services sector also shows considerable growth potential, with around 56% of workloads currently in the cloud.
Modular Infrastructure and Challenges
The report emphasizes that the most effective model for data centre development in Africa will likely be small, modular, and scalable colocation facilities. Unlike global trends where large data centres of 50 to 500 MW are common, two-thirds of upcoming African data centres are expected to be in the small (1-20 MW) and medium (20-50 MW) capacity ranges. However, the continent faces notable challenges, including energy supply reliability, connectivity infrastructure, and financing. Companies will need to adopt hybrid energy solutions, combining grid power, independent power producers, and on-site generation.
Connectivity remains a critical issue, with Africa served by approximately 75 submarine cables, though these are unevenly distributed across the continent. Many markets rely on terrestrial fibre optics or microwave links, limiting capacity and increasing latency. Additionally, raising capital in several African countries presents hurdles, as lower tenant utilization rates and a smaller market size can make financing difficult, according to McKinsey.
Overall, the report underscores the immense growth potential of Africa’s data centre industry, driven by digital transformation, cloud adoption, and technological innovation, despite existing infrastructural and financial challenges.
