In the pulsating heart of Dublin, a significant revelation is unfurling, poised to send ripples through the construction industry. The latest report from ResearchAndMarkets.com, “Africa Data Center Construction Market – Industry Outlook & Forecast 2025-2030,” drops a pin on the map of Africa, marking it as the next big battleground for data center construction. With a projected leap from USD 1.26 billion in 2024 to USD 3.06 billion by 2030, at a CAGR of 15.94%, the continent is buzzing with potential. Let’s break down the opportunities and challenges that lie ahead.
**Governments Roll Out the Red Carpet**
African governments are not merely watching from the sidelines; they’re actively fueling this growth. From implementing tax incentives to establishing Special Economic Zones (SEZs) and fostering public-private partnerships, they’re creating an environment that’s ripe for investment. Take Kenya, for instance. In May 2024, its Ministry of Information, Communications, and the Digital Economy inked a USD 1 billion deal with Microsoft and G42, signaling a clear intent to drive the country’s digital economy forward.
**AI and 5G: The Double-Edged Sword**
The report highlights AI and 5G as pivotal drivers for data center demand. AI is sparking a need for scalable, flexible computing environments, pushing sectors like agriculture, energy, and climate to evolve. South Africa’s Draft National AI Strategy, launched in July 2024, aims to attract USD 3.7 billion in AI investments by 2030, setting the stage for a data center boom.
Meanwhile, 5G is propelling the demand for edge data centers, bringing connectivity closer to users and supporting applications like IoT and enhanced mobile services. MTN South Africa’s 5G ultra-range maritime network launch in Mossel Bay last September is a testament to this trend.
**The Green Data Center Revolution**
Sustainability is taking center stage in Africa’s data center narrative. With unreliable electricity grids and a pressing need to reduce reliance on fossil fuels, African nations are prioritizing investments in renewable energy. Teraco’s 120 MW solar photovoltaic power plant in Free State, South Africa, is a shining example. Slated to power Teraco’s data centers across the country and support national grid upgrades, it underscores Africa’s commitment to environmental sustainability.
**The Shift to Colocation and Managed Cloud Services**
African enterprises are increasingly abandoning on-premises data centers, opting instead for colocation and managed cloud services. This shift, driven by security risks, limited scalability, and power instability, is opening up opportunities for data center providers. Huawei’s USD 3 million contract with the United Bank for Africa (UBA) to provide 200 petabytes of cloud storage, bagged in September 2024, exemplifies this trend.
**Cloud Providers Circle Africa**
Global cloud providers are turning their gaze towards Africa. With the cloud market experiencing an annual growth of 20%, and improved connectivity through 5G and submarine cables, the continent is becoming a hotbed for cloud-based infrastructure. Microsoft’s planned self-built data center in South Africa, expected to come online by 2027, is just the tip of the iceberg. Kenya, Nigeria, and Egypt are also on the radar, with new cloud regions planned by Microsoft, Oracle, and Huawei.
**The Innovation Imperative**
Africa’s data center market is grappling with a unique challenge: many existing facilities aren’t equipped to support high-performance computing infrastructure, such as AI and ML workloads. However, recently announced data centers are designed to support these workloads, adopting innovative cooling techniques like direct-to-chip and liquid immersion cooling.
Teraco’s JB7 data center, with its liquid-to-air and liquid-to-liquid cooling designs, and IXAfrica Data Centres’ second hyperscale data center facility, featuring on-chip cooling solutions, are leading the charge.
**Renewable Energy: The Way Forward**
As Africa’s digital economy grows, so does the demand for sustainable
