Why Data Centre Development in Africa?

Africa is currently experiencing a rapid digital transformation, creating opportunities for data centre development that provide high-yielding investments that can make a meaningful impact. By supporting the development of critical digital infrastructure, investors encourage job creation and new growth opportunities across the continent while achieving attractive investment returns.

The continent’s embrace of new digital business models, a surge in mobile data consumption, and a thriving tech sector in several African industrial hubs are placing increased pressure on Africa’s digital infrastructure.

In 2022, Africa reached approximately 570 million internet users, more than double the number compared to 2015. Nigeria, the most populous country in Africa, boasts the highest concentration of internet users, exceeding 100 million in 2022. Egypt with 76 million users ranks second and South Africa third with 41 million users.

Data centre development, fibre-optic broadband expansion, and the installation of telecom towers are emerging as the new backbone of the African digital landscape that will fuel Africa’s economic growth going forward.

Data Centre Development – The Challenges

One of the primary challenges to data centre development in Africa concerns power infrastructure. Power outages and fluctuations are common in many African countries, posing a significant threat to the reliability of data centre operations. To mitigate this challenge, investors and developers need to work closely with local governments and utilities to establish robust and reliable power sources. Exploring alternative energy solutions, such as solar and wind power, can provide sustainable options, helping to create a more resilient and eco-friendly data centre infrastructure. The energy challenges ironically provide an opportunity to invest in cutting-edge energy technologies contributing to the overall development of the energy sector in Africa.

Connectivity is another critical component for the success of any data centre. In Africa, disparities in internet connectivity and network infrastructure can be significant barriers to efficient data transmission. Data centre development in Africa requires strategic partnerships with local telecommunications providers to ensure high-speed, reliable, and redundant connectivity. Investing in submarine cables and terrestrial fiber-optic networks enhances connectivity to global networks and contributes to the overall advancement of digital infrastructure across the continent.

The regulatory environment varies widely across different African countries. A complex landscape of laws, policies, and compliance requirements precedes any data centre development. A strong understanding of local regulations and building relationships with regulatory bodies are critical to the development process. Collaboration with government agencies creates a supportive environment for data centre development leading to the formulation of policies that encourage investment in the digital infrastructure sector. Compliance with data protection and privacy regulations is also paramount, ensuring the security and trustworthiness of the data centre operations.

Mitigating the Risks

Developing a data centre in Africa is a complex undertaking that demands a thorough understanding of working in Africa and good relationships with local government. The strategic rollout of data centre developments in Africa not only supports the growing demand for digital services on the continent, but also contributes to the overall economic and technological advancement of the region. As Africa continues to embrace the digital age, the development of robust and reliable data centre infrastructure is pivotal in unlocking the continent’s full potential in the global digital economy.

When looking for data centre developers in Africa, look for a partner with a track record of successful developments. Gateway Real Estate Africa (GREA) has a well-established reputation for providing successful investment properties in Africa. We have a substantial portfolio of modern, premium-grade developments that bears testimony to our expertise and capability in African real estate. Interested in data centre development? Contact GREA today.

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