COVID-19 has fast-tracked digital transformation and will drive utilisation and the case for increased investment in datacentres across Africa, with countries like Ethiopia and Nigeria identified as potentially lucrative growth markets, according to market research by industry analysts.
Guy Zibi, who heads up research at Xalam Analytics, said South Africa, Kenya and Nigeria are already key hubs for datacentres and countries with solid internet infrastructure and strong economic sectors will attract more investment into datacentre development.
“Datacentres need economic activity and data traffic to thrive. The best opportunities, therefore, lie in markets that are both hubs of economic activity and hubs of data traffic. South Africa and North African markets, primarily, but also Nigeria, Kenya, Angola and Ghana,” said Zibi.
He added that there is “a secondary set of opportunities in markets that have promising internet foundations but virtually no hosting infrastructure” and these include the DRC, Ethiopia, and Francophone West Africa.
This week the Oxford Business Group and the Africa Data Centres Association released the Data Centres in Africa Focus Report, which highlights Africa’s economic recovery from the pandemic as the “primary factor that will drive data consumption in Africa”.
According to the World Bank, Sub-Saharan Africa is set to emerge from the 2020 recession triggered by the pandemic, with growth of 3.3% in 2021.
Digital financial inclusion is expected to “play a leading role in that recovery” for most African countries. The improved digital financial inclusion “will drive demand for datacentre capacity as institutions seek to store and protect rising levels of sensitive customer” data.
The continent’s traditional financial institutions “are migrating their operations to datacentres and will continue to do so as they look to expand their digital offerings” in the face of threats of further infection waves of COVID-19.
Ayotunde Coker, the chairman of Africa Data Centres Association highlights Ethiopia as a “particularly interesting market” based on increased opportunities following the deregulation of the telecommunications industry through privatisation, as well as growing broadband availability.
Ethiopia’s recently launched mobile money platform, Telebirr has also soared to above 3 million users within the first few months of launch.
Nigeria is another market that offers standout opportunities for datacentre growth.
“The country has a large population, of which approximately one hundred and fifty million people use the internet, a broadband penetration of nearly 45 and an advantageous geostrategic location. Indeed, geography is an important element to consider when constructing datacentres,” said Coker.
However, North Africa’s datacentre development is likely to be constrained due to its proximity to European datacentre clusters, particularly Marseille in France.