Nigeria is experiencing a remarkable surge in data centre development that is set to position it as West Africa’s premier digital hub.
According to a new report by Verraki Partners, a member of Andersen Consulting, the country’s installed data centre capacity is expected to leap from the current 65-86 MW to over 400 MW within the next three to five years. Presently, Nigeria hosts approximately 17 active data centres, with nine more facilities either planned or under construction, highlighting the rapid pace of expansion in the sector.
This explosive growth signals a fundamental shift in Africa’s digital infrastructure. Since Nigeria’s first modern carrier-neutral data centre — Rack Centre’s LGS1 — in 2012, the market has evolved from basic telco server rooms to large-scale hyperscale campus developments. Notable milestones include MainOne’s MDXi Lekki facility in 2015, which introduced Tier-III operations with 600 racks, and Africa Data Centres’ 10 MW LOS1 facility in 2021, marking Africa’s entry into hyperscale investment.
From 2021 to 2025, the expansion has accelerated significantly, with major players such as Rack Centre scaling up to 14.5 MW, MTN’s Dabengwa centre, Digital Realty, and Equinix collectively committing around US$390 million across Africa over five years. Open Access Data Centres has announced a US$500 million investment in African infrastructure, while Airtel’s Nxtra project — set to be Nigeria’s first hyperscale data centre — aims to commence operations by the first quarter of 2026.
Beyond capacity increases, Verraki’s report underscores the broader economic benefits of data centre investments. A US$10 million Tier-III, 1 MW facility can generate approximately US$17 million in economic output during construction, which can grow to over US$39 million by the tenth year when operational expenses and refresh capital expenditures are included. These projects also create around 700 direct construction jobs, sustain 20 to 30 full-time operational roles annually, and contribute to employment of roughly 1,654 positions over a decade. Tax revenues from such facilities are also significant, with annual PAYE taxes starting at an estimated US$110,000 and exceeding US$1.8 million over ten years.
Market growth prospects are equally promising. Nigeria’s data centre sector, currently valued at around US$1.4 billion, is projected to reach US$2.7 billion by 2035. This growth is driven by increasing cloud adoption — 50% of Nigerian companies now use cloud services — along with internet user numbers surpassing 570 million across Africa, a mobile penetration rate of 46% in sub-Saharan Africa (expected to reach 50% by 2025), and rising demand for AI-powered high-capacity computing.
The report identifies seven key areas with high potential for development: affordable, SME-focused colocation facilities; reliable renewable energy and hybrid power systems; edge computing for IoT and smart cities; AI and machine learning infrastructure; government digitization partnerships; IoT device deployment; and urban smart city projects.
However, challenges such as power instability requiring costly backup systems, uneven fibre infrastructure heavily concentrated in Lagos, expensive land acquisition in commercial hubs, shortages of skilled engineering and cybersecurity talent, and limited foreign exchange access threaten to slow growth. Verraki suggests strategies to unlock the sector’s full potential, including pre-negotiated electricity tariffs and long-term Power Purchase Agreements (PPAs), expanding fibre networks through initiatives like Project BRIDGE and state-level PPPs, establishing special economic zones near fibre corridors, creating innovative financing frameworks with development finance institutions, and developing local manufacturing for critical power and cooling components.
As global cloud providers seek new markets amid European overcapacity in regions like Dublin and London, Africa’s increasing data sovereignty requirements and its large, youthful population make Nigeria a natural regional hub. With 67% of Africans under 30, tech startups raising billions in recent years, and the continent accounting for only 1% of global data centre capacity despite representing 17% of the world’s population, the infrastructure gap presents both significant challenges and opportunities for growth on a massive scale.
