Africa Data Center Market Landscape 2024-2029

INDUSTRY OVERVIEW

The Africa data center market by investment was valued at USD 3.33 billion in 2023 and is expected to reach USD 6.46 billion by 2029, growing at a CAGR of 11.65% during the forecast period. Africa is experiencing remarkable technological advancements, with AI at the forefront of this revolution. The widespread implementation of AI across the region will result in increased data generation, creating a surge in demand for data centers across multiple African countries. The growing use of AI and ML technologies will augment the rack power density in the market and drive the demand for smart cooling solutions in the coming years.

KEY TRENDS

Government Support for Data Center Development Will Drive The Market Growth

• African governments are working on improving digital infrastructure by supporting digitalization and offering tax incentives. Creating Free Trade Zones (FTZs) and Special Economic Zones (SEZs) will encourage innovative technologies, boost investments in data centers, and promote the overall progress of technologies in the region.
• In February 2023, the government of South Africa introduced the data-driven economy program to help businesses use data more effectively. The government offers financial support to encourage businesses to embrace data-driven approaches and grow more effectively.
• In addition, policies and regulations on the local storage of sensitive data will boost the digital economy in several African countries. Most data is currently stored in offshore data centers. For example, the Nigerian government has mandated the local storage of data pertaining to sectors such as oil and gas, financial services, and the public sector.

Growing Smart City Developments Will Drive the Demand for Advanced Technologies in the Market

• As of 2023, most countries, including South Africa, Kenya, Nigeria, Egypt, Ethiopia, Morocco, Ghana, and Algeria, account for an average internet penetration above 64%. Africa's central location market is a key area for undersea cable landing stations, enhancing global connectivity and creating large-scale smart cities. As a smart city grows, more data will be generated, augmenting the need for storage and computing power. This demand will drive the establishment of edge data centers for High-Performance Computing (HPC), making the region more commercially appealing and attractive for investors.
• As smart cities progress, there will be a push for advanced technologies, including 5G, IoT, and AI, to enhance internet speed and data flow. This surge in connectivity is expected to boost the Africa data center market. With the smart city initiatives gaining momentum, more investors are estimated to enter the data center market and invest in data center infrastructure.

SEGMENTATION INSIGHTS

• The Africa data center market, particularly in terms of IT infrastructure, is primarily seeing the use of switches with up to 40GbE ports. As cloud data centers expand, there is an anticipated increase in demand for switches with ports exceeding 40GbE. Additionally, with the growing need for sophisticated infrastructure, the uptake of flash storage devices and blade servers is expected to rise in the upcoming years.
• In the coming years, sustainability mandates are anticipated to drive the adoption of generators in the Africa data center market that utilize sustainable fuels like hydrotreated vegetable oils, among others. This trend is expected to be followed by increased demand for UPS  systems equipped with lithium-ion batteries and other types. 
• The industry is poised to see the ongoing development of greenfield buildings in various countries where abundant land is available for industrial development. The entry of new global data center operators and the increasing expansion of existing operators in the region are also expected to attract several new global contractors.

GEOGRAPHICAL ANALYSIS

• The Africa data center market is poised for significant growth, driven by technology advancements, increased digitalization, and strategic government initiatives.
• South Africa is emerging as a major global consumer market due to its growing population, increasing disposable incomes, and expanded access to technology.
• The data center industry in Kenya is undergoing significant growth, driven by enhanced internet access, robust information and communication technology (ICT) infrastructure, and expanded services.
• Nigeria is emerging as one of Africa’s fastest-growing markets after South Africa, with increasing demand for data centers expected in the upcoming years. Government initiatives and the country's strategic location are fueling this growth.
• The data center industry in Egypt is emerging as a key player in the Africa data center market, driven by its close proximity to Europe, advancing digitalization, development of industrial land, and enhanced fiber connectivity, among other factors.
• Ethiopia's data center industry is being driven by the increasing use of digital platforms, adoption of advanced technologies such as IoT and big data, growth in an AI-driven digital economy, enhanced 5G network connectivity, and rise in internet users, particularly in social media and mobile devices. These are rapidly boosting data traffic, thereby escalating the demand for data centers in the upcoming years.
• Other country markets, including Morocco, Ghana, Algeria, Cameroon, Angola, Uganda, Namibia, Zambia, Senegal, Rwanda, Mozambique, and Botswana, are also promising. Morocco currently leads with the most substantial data center facilities. Still, demand is expected to surge across these nations, driving significant regional data center capacity growth in the upcoming years.

VENDOR LANDSCAPE

• The Africa data center market has the presence of IT infrastructure providers such as Arista Networks, Atos, Broadcom, Cisco Systems, Dell Technologies, IBM, NetApp,  Oracle, and others that are driving the availability of advanced IT infrastructure in the market.
• The Africa data center industry has a presence of several regional and global contractors and subcontractors, such as Atkins, Orascom Construction, Arup, Abbeydale Projects, REDCON Construction, Raya Information Technology, and others.