Africa is on the cusp of a profound digital transformation, with its data centre sector emerging as a critical backbone for this continental shift. A new benchmark study, the ADCA INSIDER SURVEY 2025, unveiled by the Africa Data Centres Association (ADCA) during the recent Data Centres in Africa event in Johannesburg, reveals an optimistic outlook: a projected 17.5% growth in the sector. This significant expansion is driven by an accelerating digital demand across the continent, signaling a future where Africa increasingly controls its own digital destiny. The survey, conducted with analytical support from Rising Advisory and backed by partner STELLARIX, provides invaluable insights into the economic landscape, investment trends, innovation, environmental, social, and governance (ESG) factors, and human resources shaping this vital industry.

The Digital Surge and Data Centre Boom: A Growth Trajectory

The anticipated 17.5% growth in Africa’s data centre sector over the next 12 months is a powerful indicator of the continent’s digital momentum. This optimism is widespread among industry leaders, with a remarkable 93.6% of respondents expecting strong or moderate growth, and none foreseeing a decline. This confidence is rooted in the fundamental shift towards a digitized economy across African nations.

The market is not just growing; it’s expanding significantly in value and capacity. According to a “Africa Data Center Market Landscape 2025-2030” report, the Africa Data Center Market was valued at USD 3.49 Billion in 2024, and is projected to reach USD 6.81 Billion by 2030, rising at a Compound Annual Growth Rate (CAGR) of 11.79%. Specifically, colocation revenue is projected to grow at an even higher CAGR of 17.91% during the 2025-2030 forecast period. This expansion is evident in key hubs like Johannesburg and Cape Town in South Africa, which remain dominant, but also in rapidly emerging markets like Nigeria, Ethiopia, Morocco, Ghana, and Kenya, all witnessing significant data centre investments.

Key Drivers of Digital Demand

The momentum in the data centre sector is primarily fueled by the accelerating digitization of African economies, rather than solely by emerging technologies. This digitization is underpinned by several interconnected factors:

• Accelerating Internet and Mobile Penetration: Africa has seen a dramatic increase in internet users. The World Bank reported over 160 million Africans gained broadband internet access between 2019 and 2022, representing a 115% increase in internet users in Sub-Saharan Africa between 2016 and 2021. This expanding connectivity forms the bedrock for digital services.
• Soaring Data Consumption: As more Africans come online and engage with digital services, data consumption is skyrocketing. Africa’s data consumption increased from 0.6 GB/month in 2016 to 2.25 GB/month in 2022 and is expected to reach around 11.3 GB/month by 2029. This surge is driven by streaming services (Netflix, Disney+, Amazon Prime), social media, and digital payments.
• Rapid Smartphone Adoption: The proliferation of smartphones is a key enabler. In 2019, smartphone connections accounted for 44% of total connections, and this share is expected to reach 75% by 2025. Countries like Nigeria, South Africa, and Egypt lead in smartphone connections, driving demand for digital services.
• Growth of Online Markets and E-commerce: The rise of e-commerce platforms like Jumia, Takealot, Kilimall, and Konga has significantly boosted data centre demand. The number of online shoppers in Africa increased from 138.9 million in 2016 to 387.8 million in 2022 and may reach around 519.8 million by 2025. These platforms require robust data infrastructure to provide seamless customer experiences.

Faith Waithaka, Chairwoman of ADCA, aptly summarizes this shift: “This survey highlights a growing consensus: data infrastructure has become a cornerstone of economic development, it is not peripheral to development, it is foundational.” This perspective emphasizes that data centres are no longer just technical facilities but strategic assets for national and regional growth.

Foundational Pillars: Emerging Digital Uses Driving Demand

The development of data centres is intrinsically linked to the growth of various digital services that are transforming African economies. These services, including cloud computing, artificial intelligence (AI), digital finance, and e-government, are not just beneficiaries of data centres but also primary drivers of their expansion.

Cloud Computing: Enabling Agility and Scalability

Cloud computing is rapidly moving towards mainstream adoption in Africa, offering businesses and organizations unprecedented agility, scalability, and cost-effectiveness. It enables users to access data from anywhere, at any time, using any device, while paying only for the services they consume, freeing them from the burden of maintaining expensive on-premise IT infrastructure.

According to Oracle Kenya, about a third of companies in Central and Eastern Europe (CEE) and Sub-Saharan Africa (SSA) are already in the cloud, with another 39% actively planning and evaluating cloud strategies. Small and Medium-sized Businesses (SMBs) have been early adopters due to the high level of security at a lower cost compared to in-house solutions. Interest is now increasing in larger organizations, with utilities, finance, and the public sector leading the adoption curve. The preferred cloud solution is Software as a Service (SaaS), with Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) being the most popular applications. This widespread adoption of cloud services directly translates into increased demand for local data centre capacity.

Artificial Intelligence (AI): Powering the Future

Artificial intelligence (AI) holds immense potential for Africa’s socio-economic transformation and cultural renaissance, aligning with the aspirations of the African Union’s Agenda 2063 and the Sustainable Development Goals (SDGs). AI can stimulate economic growth, create new industries, drive innovation, and address some of Africa’s most complex challenges in healthcare, agriculture, and education.

The African Union adopted its Continental AI Strategy in July 2024, outlining a vision to harness AI’s benefits, build capabilities, minimize risks, stimulate investment, and foster cooperation. Examples of AI applications already making an impact include:

• Healthcare: Zipline is revolutionizing medical supply delivery in Africa through AI-optimized drone routes in countries like Rwanda, Ghana, Nigeria, Kenya, and Côte d’Ivoire, overcoming geographical barriers.
• Agriculture: Tools like FarmVibes.Bot use AI to support smallholder farmers with personalized agricultural information, crop advisories, and pest diagnoses. Google AI’s ‘Nuru’ helps Tanzanian farmers diagnose cassava plant diseases.
• Public Services: AI can enhance public service delivery, improve information integrity, and support climate action through smart grids.

However, developing AI capabilities in Africa requires sustained investment in robust digital infrastructure, including high-performance computing, data centres, and cloud services. It also necessitates huge sets of quality data and the development of local AI skills and talent.

Digital Finance (Fintech): Revolutionizing Financial Inclusion

Africa is undergoing a profound financial transformation driven by rapid technological advancements, with fintech and cross-border payments leading the charge. The continent’s cross-border payments market is projected to grow from $329 billion in 2025 to $1 trillion by 2035, fueled by fintech innovation and intra-African trade. Africa leads globally in mobile money adoption, connecting millions to financial services who were previously unbanked or underbanked.

This digital surge, however, heightens cybersecurity risks, necessitating robust fraud prevention. Fintechs must prioritize compliance, identity verification, and advanced technologies like AI to safeguard sensitive data. AI is revolutionizing African banking by automating fraud detection, enhancing regulatory compliance, and improving risk assessment, enabling more efficient and secure financial systems. The annual Digital Finance Africa 2025 summit in Johannesburg serves as a key platform for industry leaders to address these trends and foster collaboration.

E-Government Services: Streamlining Public Administration

The push for e-government services across Africa aims to improve efficiency, transparency, and accessibility of public administration. Digital platforms for citizen services, tax collection, and public information require reliable and secure data infrastructure. While African countries have made progress, challenges persist in achieving widespread e-governance.

According to the E-Governance Knowledge Hub, the average e-Government Development Index (EGDI) for Africa in 2022 was 0.41, compared to a global average of 0.61, indicating significant room for improvement. Challenges include a lack of political will, insufficient intergovernmental coordination, funding issues, and the absence of a single Pan-African digital ID system. However, Africa also has the advantage of fewer “legacy burdens” compared to more developed regions, potentially allowing it to adopt digitized solutions faster and leapfrog traditional models. Data centres are fundamental to hosting and securing these critical government digital platforms.

Navigating Structural Limits and Overcoming Hurdles

Despite the immense potential and strong growth trajectory, Africa’s data centre sector continues to face structural challenges that require strategic intervention and collaborative solutions.

Access to Reliable Energy: A Persistent Barrier

One of the most significant hurdles for data centre development in Africa is the access to reliable and consistent energy. Data centres are energy-intensive operations, requiring substantial and uninterrupted power supply. The volatility of renewable energy generation makes it challenging to achieve 100% renewable operations without robust backup and storage solutions.

To address this, data centre operators are increasingly exploring:

• Battery Energy Storage Systems (BESS): These are critical for bridging the gap between fluctuating renewable generation and continuous data centre demand, storing excess renewable energy and discharging it during low-generation periods.
• Onsite Renewable Energy and Microgrids: Deploying on-site solar and wind power, often integrated into microgrids, allows facilities to operate independently or semi-independently of the main power grid, balancing renewable generation with storage and backup systems.
• Alternative Fuels: Green hydrogen, produced using surplus renewable electricity, offers a longer-duration energy storage solution when used in fuel cells. Biofuels and renewable natural gas also provide lower-carbon backup options compared to traditional diesel generators.
• Smart Energy Management: Artificial intelligence and predictive analytics play an increasing role in optimizing energy supply and demand, forecasting renewable energy availability, and managing battery charging/discharging schedules.

These solutions, as highlighted by SLR Consulting, are crucial for improving reliability and reducing the carbon footprint of data centres in Africa.

Financing Issues: Attracting and Channeling Capital

While the ADCA survey indicates high investment intentions, with 77.4% of companies planning significant investments, there’s also a recognition of “tempered expectations” due to certain financing realities. One key factor is that global capital is increasingly flowing toward AI-related infrastructure in more mature markets, potentially at the expense of African projects.

Attracting and channeling sufficient capital into Africa’s data centre sector requires:

• De-risking Investments: As discussed in other economic contexts, mitigating perceived risks (political, regulatory, currency volatility) is crucial to attract foreign direct investment. Development finance institutions and blended finance models can play a key role.
• Tailored Financial Instruments: Creating financial products specifically designed for data centre projects, which often require large upfront capital and have long payback periods.
• Local Capital Mobilization: Encouraging domestic financial institutions and pension funds to invest in digital infrastructure projects, leveraging Africa’s own growing savings.

Regulatory Constraints: Towards Harmonization and Clarity

The business climate for African data centres is seen as favourable by over 80% of respondents, yet regulatory constraints remain a persistent barrier. These can include:

• Data Localization Policies: Many African countries are implementing data localization laws, requiring businesses to process and store data domestically. While these policies enhance digital sovereignty and stimulate local data centre industries, they can also increase operational costs for enterprises and limit access to global cloud services. Morocco’s Digital Morocco 2030 plan, for instance, includes policies on local storage of sensitive data.
• Lack of Harmonization: Fragmented regulatory landscapes across 54 African countries can create complexities for pan-African operators.
• Bureaucratic Hurdles: Delays in obtaining permits, licenses, and grid connections can significantly prolong project timelines.

As highlighted by Norton Rose Fulbright, developers must navigate various energy efficiency schemes, tariffs, and compliance requirements. The industry needs clearer, more consistent, and investment-friendly policy frameworks to truly accelerate growth.

ESG: Steady Progress with a Growing Focus on Energy Efficiency

Industry players give an average ESG performance rating of 5.87 out of 10, reflecting a cautious but steady progress in integrating environmental, social, and governance considerations into data centre operations. The primary focus is on tangible and immediate gains, particularly in terms of energy efficiency.

Prioritizing Energy Efficiency (PUE)

Power Usage Effectiveness (PUE) is the most widely adopted metric for measuring data centre energy efficiency. It is calculated by dividing the total energy consumed by the facility by the energy used specifically by the IT equipment. A PUE of 1.0 represents a perfectly efficient data centre, where all incoming power is used by IT equipment. The Uptime Institute reports the average data centre PUE is 1.58.

The ADCA survey found that 74.2% of respondents cite energy efficiency as their primary ESG criterion, well ahead of the use of renewable energy (22.6%). This prioritization makes sense in a continent where energy costs can be high and grid reliability an issue. Optimizing PUE through efficient cooling systems, smart power management, and modern IT equipment directly translates into operational cost savings and reduced environmental impact. However, it’s crucial to acknowledge PUE’s limitations, such as its disregard for local climates and its narrow focus, which can sometimes lead to unsustainable usage of other resources like water.

The Growing Role of Renewable Energy

While energy efficiency takes precedence, the adoption of renewable energy sources for data centres is a growing focus. This includes:

• Onsite Renewables: Solar and wind power generation directly at the data centre site.
• Power Purchase Agreements (PPAs): Long-term agreements with renewable energy generators to purchase clean electricity from offsite sources.
• Green Hydrogen and Biofuels: Exploring alternative, lower-carbon backup power solutions.

Integrating renewables is vital for achieving true decarbonization and long-term sustainability, aligning with global climate goals.

Talent, Sovereignty, and Regional Integration: The Next Frontiers

Beyond the immediate technical and financial aspects, the ADCA survey highlights critical strategic priorities for Africa’s data centre sector: human capital development, digital sovereignty, and regional integration.

Skills Development: Building a Local Workforce

Skills development is emerging as a central issue for the data centre industry. With rapid technological advancements, there’s a growing demand for specialized professionals in areas like data centre operations, design, energy management, and cybersecurity. The survey found that 61.3% of companies report having created their own training programs to meet specific operational needs.

This trend underscores the need for robust education and vocational training initiatives. Organizations like the Uptime Institute offer various certifications and courses (e.g., Accredited Operations Specialist, Certified Data Center Design Professional) that can equip African talent with the necessary expertise. Building a strong local talent pipeline is crucial for sustainable growth, reducing reliance on expatriate labor, and fostering indigenous innovation.

Digital Sovereignty: Controlling Africa’s Data

Digital sovereignty is gradually gaining ground as a strategic priority, reflecting African stakeholders’ growing will to control their infrastructures and data flows. This involves ensuring that data generated and consumed within Africa is stored, processed, and governed under African laws and regulations, reducing reliance on foreign cloud providers and enhancing cybersecurity.

This push for sovereignty is driving the development of national data centres that guarantee the data of citizens, corporations, and governments stays under their authority. It also encourages local tech innovation and the negotiation of data hosting agreements with international firms to ensure compliance with domestic regulations.

African Continental Free Trade Area (AfCFTA): A Future Catalyst

The African Continental Free Trade Area (AfCFTA), which aims to create a single market for goods and services across the continent, holds immense promise for the data centre sector. However, the ADCA survey notes that it is still seen as having no significant impact on the data centre sector at this stage. This is largely attributed to the early stage of the trade zone’s rollout and the inherent complexities of integrating infrastructure-heavy, tightly regulated sectors like data centres.

Despite the current limited impact, stakeholders expect that deeper regional integration through AfCFTA could bring significant benefits in the future:

• Increased Investment and Market Expansion: A unified market reduces fragmentation, making Africa more attractive for large-scale data centre investments.
• Harmonized Regulations and Policies: The AfCFTA Digital Trade Protocol (DTP) aims to create a unifying regulatory framework for Africa’s digital economy, facilitating cross-border data flows, enhancing cybersecurity, and promoting digital inclusion. It seeks to reduce restrictions on cross-border data flows and address issues of data sovereignty and localization, while also establishing robust data privacy and protection measures.
• Greater Cross-Border Data Flows: Easier and more affordable transfer of data across borders is crucial for digital trade, cloud services, and AI development.
• Lower Equipment Costs: Harmonization and increased scale could lead to more competitive pricing for data centre equipment and services.

The operationalization of the AfCFTA, particularly its Digital Trade Protocol, is expected to play a pivotal role in shaping the future of digital commerce and infrastructure in Africa.

Conclusion: Building the Digital Foundations of a Connected Continent

The rapid growth and optimistic outlook for Africa’s data centre sector underscore the continent’s accelerating digital transition. This transformation is not merely about adopting new technologies but about building the foundational infrastructure necessary for digital sovereignty, economic attractiveness, and regional integration. The ADCA INSIDER SURVEY 2025 provides a crucial snapshot of this dynamic landscape, highlighting both the immense opportunities and the persistent structural challenges.

As Didier Hung Wan Luk, CEO of STELLARIX, concludes, “The potential is considerable. What we are building today are the digital foundations of a continent connected according to its own priorities. We believe in a sovereign digital Africa, anchored in reliable technologies tailored to local realities.” The commitment of organizations like ADCA, STELLARIX, and Rising Advisory reflects a shared vision to actively contribute to this continental transformation.

To fully realize this potential, collaborative efforts are essential. African governments, industry players, and development partners must work together to address critical issues such as ensuring reliable and sustainable energy access, attracting diverse financing, developing clear and harmonized regulatory frameworks, and investing in human capital. By doing so, Africa can not only accelerate its digital transition but also ensure that this transformation is inclusive, sustainable, and truly serves the continent’s unique priorities and aspirations. The journey towards a fully digitized and sovereign Africa is well underway, with data centres at its very core.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

4th July, 2025