To realise its digital potential, Africa must focus on several practical steps like investment in renewable energy sources
Africa’s data centre (DC) market and its evolving digital landscape present a dynamic picture of both immense potential and pressing challenges. As the continent strides towards digital transformation, sustainability in data centre design has become increasingly critical. Africa’s higher temperatures necessitate additional cooling power, making access to renewable energy essential, especially for multinational hyperscale providers.
Solar power, in particular, holds significant promise. Nine African countries are building solar capacities, with Egypt and South Africa already part of the “GW club,” boasting at least 1 GW of installed solar power capacity.
Morocco is on a similar trajectory with its 1200-hectare, 580MW solar complex, the world’s largest concentrated solar power facility.
Africa is also emerging as a leader in micro-grid capacity, with co-location and enterprise operators adopting renewable energy sources for data centres. Zimbabwe’s Econet, through its Distributed Power Africa unit, is integrating alternative energy solutions into its data centre assets in Burundi, Kenya, and South Africa. Concurrently, efforts to establish an energy-efficiency code of conduct, inspired by the European Commission’s best-practice guidelines for data centre energy efficiency, are underway. Addressing water consumption, particularly in cooling systems, is another key focus for sustainable DC operations in Africa.
The International Monetary Fund, in a March 2021 report, highlighted the pandemic as an opportunity for African governments to increase funding to develop ICT skills, infrastructure, and technologies. This aligns with the continent’s digitalisation efforts, where the rising use of mobile technologies and digital payments could accelerate industrialisation. Enhanced access to smartphones boosts consumer information, networking opportunities, job creation, and financial inclusion. Rwanda, for example, is leveraging improved 4G coverage to expand the penetration of mobile money, while Nigeria attracted more than $166.5m in venture capital in the first half of 2023, the fourth-highest deal value on the continent. This influx has supported ICT ventures across various sectors, including education, financial technology, agriculture, healthcare, logistics, and travel.
Several governments have committed to digital-first agendas to bolster the economy and create jobs as technology centres, such as Silicon Savannah in Nairobi, Kenya, and Yabacon Valley in Lagos, Nigeria, emerge and expand. In 2021, Africa had 716,000 professional developers, a 3.8% increase from 2020, according to a report by Google and Accenture. The number of African start-ups securing venture funding grew at an average of 27.1% per year between 2015 and 2022, reaching 633 start-ups. However, most do not survive beyond the Series-B stage, with only 3% doing so in 2019. This attrition is due to various factors, including political and economic instability, weak consumer purchasing power, inadequate data communications infrastructure, and a limited supply of digital talent.
Growing the digital economy is vital to overcoming these challenges. African start-ups are responding by filling critical public service gaps in healthcare, agriculture, and logistics. In Ethiopia, for example, several local ride-hailing apps and e-commerce markets have emerged, alongside an agri-tech incubator and a seed fund designed to boost local logistics and agri-food systems.
The development of global standards is paramount to give investors and customers the confidence to engage in Africa’s rapidly expanding DC industry. Regulatory divergence often undermines clarity and inhibits growth, underscoring the need for a more uniform and globally recognised set of standards. The International Organisation for Standardisation (ISO) and the International Electrotechnical Commission (IEC) are working together to produce globally applicable best practice guidelines for DCs. The first set of full standards focusing on data centre resource efficiency, published in May 2023, has the potential to harmonise the industry’s understanding of energy efficiency under the power usage effectiveness (PUE) standard.
Enhanced engagement between international organisations like the ISO and the IEC and regional bodies such as the African Data Centres Association will help unify data centre standards and ensure the adoption of internationally recognised best practices. Robust monitoring and compliance will be essential to ensure these standards are effectively implemented and maintained. This process will require a collaborative effort between DC operators, regulatory bodies, and international standard organisations.
To realise its digital potential, Africa must focus on several practical steps. Increasing investment in renewable energy sources for DCs, such as solar power, will be crucial. Governments should prioritise funding for ICT skills development and infrastructure improvements. Supporting start-ups with stable political and economic environments and better data communications infrastructure will help them survive and thrive. Finally, unifying standards and ensuring compliance through regular audits and assessments will provide the foundation for a reliable and efficient DC industry.
Africa’s journey towards digital transformation is both challenging and exhilarating. By addressing sustainability, enhancing the ICT ecosystem, committing to a digital-first agenda, and unifying standards, the continent can harness its vast potential and achieve significant economic growth and development.
Chudi Okoye is the Deputy Regional Editor at Africa Oxford Business Group