Despite a rocky 2022, Africa is still poised to grow its digital economy. In recent times, the continent has seen steady and deliberate efforts from both the private and public sectors to actualise this charge. These efforts, however, have been limited to consumer-facing products and have neglected the infrastructure that powers them.
According to a 2022 report by Endeavor Nigeria, Africa’s digital economy is approaching its S curve, and this growth has been driven by COVID and an increase in tech talent. The report estimates that the market size of the digital economy is $115 billion now and expected to be $712 billion by 2050.
The report also establishes that this charge is still in its infancy, with mobile penetration numbers hovering between 30% and 40%. Beyond having devices that can access the internet, the critical infrastructure that powers the transfer of information, such as data centres and fibre optic networks, is also necessary for actualising this charge.
However, there is a serious shortage of data centres on the continent. There are currently only 86 colocation data centres in 15 countries in Africa, and the majority of these data centres reside in the Big Four—South Africa, Egypt, Nigeria, and Kenya.
In a new effort to remedy this shortage, the United States International Development Finance Corporation has loaned $30 million to Africa Data Centres (ADC) to build a new facility that will more than triple the company’s current facility. The loan is a follow-up to the first disbursement of $83 million in August 2022 and is part of an initial $300 million loan that will be disbursed over the next few years.
Africa Data Centres is one of the continent’s largest networks of interconnected data centres, providing businesses, cloud providers, and hyperscalers with power, cooling, security, and connectivity. The new facility will be completed in mid-2024 and will increase the company’s IT load from 4.5 megawatts to 15 megawatts.
Speaking on why the data centre will be located in Kenya, Hardy Pemhiwa, the CEO of Cassava Technologies, the parent company of Africa Data Centres, said, “Our decision to increase our investment in our data centres in Kenya is in recognition of the position the country now occupies as a leader in the adoption of digital technologies in Africa.”
He also stressed that data centres will be significant for the economic growth and digital transformation of the continent.
The United States ambassador to Kenya, Meg Whitman, spoke about the fact that Africa is home to only 1% of the world’s data centres despite being home to 17% of the global population. She added that projects like these are at the centre of Kenya’s and Africa’s tech transformation.
Tesh Durvasala, ADC’s CEO, explained that there are still plans for more expansion depending on demand from its customers. “Our customers are mainly the Africa 500…, and eventually we will be able to expand to 20 or 25 megawatts capacity if we witness a continued growth in demand.”
The absence of sufficient data centres on the continent can be tied to two major causes: a lack of enabling policies by governments and a lack of interest on the part of the private sector to establish more data centres. This new facility shows that it is possible to significantly improve the state of digital infrastructure through increased public-private partnerships.
While the construction of one data centre cannot remedy a difficult situation, it shows that steady strides are being made towards actualising the digital economy charge and that African governments just need to take the improvement of the continent’s digital infrastructure by the horns.
