The surge in AI technology deployment and the demand for more efficient cloud storage is driving the growth of data centers globally, and Africa as a continent, is doing its best to keep up.

On the African continent, there are just over 100 data centers - most of them located in South Africa, Nigeria, and Kenya.

In concentrated, developed markets such as the USA and Europe, data centers attract investment because there is an exponential increase in demand for data storage, processing, content caching, and cloud management. They can easily interconnect to a myriad of established networks that offer varying levels of redundancy, reliable power, and virtually zero downtime.

In Africa, the environment is a little more complex.

The expansion of data centers in Africa

Initially, data centers in Africa were located in the proximity of subsea cable landing stations and in established cities that were better equipped to meet the specifications of hyperscalers like Microsoft, Google, and Amazon. However, the demand for localized data storage has now outstripped demand.

Analysts maintain that Africa needs at least 700 new data centers to meet its connectivity and data storage requirements over the medium term. This includes tenant space for the growing number of businesses and SMEs looking to manage their future cloud, peering, and localized storage needs.

Although we are seeing a positive rise in data facilities and cloud investments on the continent - with forecasts predicting around $7 billion in investments at a CAGR of around 7 percent over the 2024 -2028 period, this is still far short of the demand requirements - and the real investments needed in providing future storage capacity and related network infrastructure.

The emergence of digital hubs

Cities like Johannesburg, Cape Town, Lagos, and Nairobi are leading the race in cumulative leased data center capacity, and while data center hubs in Luanda, Kinshasa, Dar es Salaam, and Cairo are showing promising signs of growth, there are still challenges.

At present, terrestrial networks or metro infrastructure across many parts of the continent are not yet sufficiently developed to create digital paths and justify the data centers needed to serve local markets and provide tailored digital services at affordable prices. The availability of power and network connectivity is also limiting the size and scale of where new data facilities that can be constructed.

However, countries like Angola and South Africa have become a focal point for investors. For instance, global connectivity and digital services provider, Angola Cables’ fiber network point in Luanda currently accounts for more than 70 percent of the Internet and data traffic flows to and from Africa.

Cables such as the South Atlantic Cable System, WACS, and the near-operating 2Africa (Meta) Cable offer express links for companies to share content and data with networks in other parts of the world - at vastly reduced latencies and costs.

It is expected that the Angolan data center market will achieve an annual growth of 9.24 percent, meanwhile Angonix - Angola’s Internet Exchange Point - is now the 3rd largest IXP in Africa.

South Africa is the largest exchange market in Africa and ISPs, cloud-based services, OTTs, and hyperscalers will be the biggest contributors to the anticipated CAGR of 8.44 percent that is forecasted over the next five years.

An urban metro like Durban on the East Coast of Africa is becoming an increasingly strategic location as it is the landing point for the SEACOM, EASSy, SAFE, and METISS cables and will also serve the incoming 2Africa cable from Meta.

Data centers in the region are also serving as a vital link to accommodate the growing data traffic from East Africa and the new demand from the Middle East as it seeks alternate redundancy routing to cache contents closer to the US.

Powering the future of green data centers

One of the biggest challenges impeding the expansion of data centers in Africa is access to reliable and consistent power sources.

Access to reliable power supply - either through the electricity grid or the use of renewable or green energy, is one of the key factors to be considered when planning greenfield data facility developments.

Power and cooling costs make up a significant percentage of overall data center expenses - anywhere between 30 to 70 percent. To reduce this, investors and developers alike will need to focus on energy-efficient design and smart operational practices powered by renewable energy, and advanced cooling technologies to reduce electricity consumption - and overhead costs.

At the same time, the unrelenting appetite for the adaption of Artificial Intelligence tasks will quadruple the demand for power as these processes require much more computational power than standard data processing activities.

Convergence will drive the viability of new data centers

As the demand for data increases and cloud ecosystems expand across the African continent, more data storage facilities will be required. Smart, multipurpose, carrier-neutral centers will play a more defining role in the evolution of Africa’s digital future.

Investments in new submarine fiber-optic cables and the expansion of terrestrial fiber networks will be critical to the growth of Africa’s data center market. The need for alternate redundancy options will become just as important as primary routing options in today’s international business environment.

Network operators, telcos, and future investors will need to make calculated strategic decisions as to when and where data centers in Africa should be located. The most logical locations are in proximity to existing or new subsea cable landing stations - or in the growing digital hubs where international terrestrial networks interconnect with national and metro networks.

Africa’s future connectivity success can only be achieved through closer collaboration between subsea cable and network operators, hyperscalers, and other content and connectivity providers.

These efforts will need to be supported by a well-thought-through and systematic approach to the development of more data storage locations, which will bring not just the returns that investors seek, but the real digital infrastructure development that Africa needs.