By Christian Hiller von Gaertringen
Hopes for rapid industrialization in Africa have not yet materialized. Nevertheless, the demand for energy across the continent is rising rapidly. The International Energy Agency estimates that electricity demand is increasing by around 5 percent annually across the continent.
We anticipate that the need for reliable, affordable electricity will be significantly driven by digitization and AI. In this context, data centers are the central part of the critical infrastructure that will shape Africa’s economic future.
With a robust digital infrastructure combined with a reliable power supply, Africa has many opportunities to become a pioneer of the 21st century—in med-tech, biotech, telemedicine, e-learning, and many other fields that will improve life for the millions of Africans yet to be born.
Consistent digitization will enable Africa to cope with rapid population growth. It is impossible to imagine how the more than one billion children expected to be born over the next three decades could receive a quality education without e-learning. Telesurgery—where the operating physician can be thousands of kilometers away—will bring tangible improvements to healthcare in Africa. Digitization in agriculture will help enhance soils and food supplies in terms of both quantity and quality. All of this requires high-performance networks, stable internet connections, and data centers.
When it comes to data warehouses, the sector is on the continent still in the early stages. Nevertheless, the analysts of global consulting firm McKinsey are quite optimistic in their report:
“The market for data centers in Africa is entering a phase of accelerated growth, with demand for capacity expected to rise from about 0.4 gigawatts (GW) today to 1.5 to 2.2 GW by 2030.”
Investors looking at Africa’s long-term growth story should pay close attention to these colocation facilities as they sit at the intersection of several structural trends: digitization, demographics, urbanization, financial inclusion, AI, and digital sovereignty.
Africa is experiencing one of the world’s fastest increases in internet usage, smartphone adoption, streaming, cloud services, fintech transactions, and mobile money. That creates a classic infrastructure-growth opportunity, as demand is rising fast, supply is scarce, and barriers to market entry are high. We are highlighting the tremendous opportunities – and one substantial risk that threatens the continent’s development.
What awaits you behind the paywall:
Which are the leading data centers in Africa.
How the market for data centers in Africa will grow.
What the key opportunities and key challenges are.
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