Africa’s data centre market is a lion cub
Young, not yet at full strength, but unmistakably built to grow into a powerful predator. Where the market is, where it is going, and how to get involved.
The African data centre market is a lion cub — at an early stage of development, and needing massive investment to meet even its current demand, let alone its potential. But the trajectory is unmistakable: this cub is built to grow.
Where the market is
The signs of an early-stage market are everywhere. Internet penetration, above 90% across Europe, runs from highs of around 84% in Morocco and 68% in South Africa down to single digits in parts of the continent. Colocation penetration is low, and submarine-cable capacity is still building out. Each country is on its own journey — there is real nuance here — but taken together, the market has only just started down its path. There is a long way to go before the cub is a fully grown lion.
Where it is going
Data centres are one cog in a global IT industry driven by data consumption: the more data we use and the more connected we are, the bigger the industry grows. Consumption climbs as disposable incomes rise and living standards improve, and as the cost of data falls when markets open and competition drives prices down. Three metrics in particular pull data centre development along — an open, carrier-neutral telecom market; low network latency; and data-sovereignty rules that keep sensitive data in-country. (I cover those three in more depth in a separate piece.)
What it means — and how to get involved
The short answer is growth, across every segment: investment from private equity, banks and governments; construction by engineers, contractors and suppliers; and operations, technicians and equipment suppliers. If you are looking to invest — especially from abroad — a few things matter:
- Get to know the space — who is there, and what is driving the market.
- Partner with a local — they have the contacts and know how to get things done; be ready to invest in some skills development.
- Do not spread yourself too thin — focus on one country or region, master it, then expand.
- Be patient — working in Africa takes time; things do not always move as fast as you would like.
- Be flexible — expect the unexpected and work through it.
- Build relationships, not transactions — people work with people, and long-term relationships pay the best dividends.