Experts in the data centre ecosystem have identified dearth of infrastructure and low digital adoption as some of the problems confronting the growth of the subsector in the country. They say it is also limiting its ability to create jobs and grow the economy.
The experts spoke at Hyperscalers Convergence Africa conference, which highlighted the growing global interest in data centres as a key asset class, with transaction sizes increasingly reaching up to 300 megawatts (Mw).
CEO of Geniserve, Gbenga Adegbiji, who opened the conversation, pointed out the urgent need to address low digital adoption and infrastructure gaps in order to meet an ambitious target of 2,500 Mw in data centre capacity across Africa.
He emphasized that these challenges must be tackled head-on to unlock the full potential of the sector.
A major theme of the conference was the increasing trend of global data centers acquiring local operators, signaling a shift in the region’s digital landscape. Notable transactions, such as Digital Realty’s acquisitions of Teraco, iColo and Medallion, as well as Equinix’s purchase of MainOne, were cited as examples of this growing interest from international players. These acquisitions are indicative of a broader strategy to bolster regional capabilities and enhance service offerings.
General Manager of Technical Operations at MainOne, Oluwasayo Oshadami, shared insights on the evolution of cloud adoption in the region. He noted a significant transformation in mindset over the past decade, with IT departments moving from a reliance on on-premises servers to a recognition of the benefits offered by commercially-run data centers.
“While West Africa’s combined data center capacity was just 80 MW two years ago, Nigeria contributed over 80per cent of that total, contrasting sharply with South Africa’s growth from 290 Mw to over 400 Mw,” Oshadami explained.
Despite Nigeria’s larger population and substantial online presence, the country has not achieved proportional growth in data center development, highlighting an underperformance in this vital sector. Participants in the discussion identified key factors driving growth, including the need to convert Nigeria’s 100 million online users into meaningful economic activity. Investment in data centers was recognized as a pathway to job creation and economic stimulation, necessitating robust fiber networks for enhanced connectivity.
The conversation also revealed that the adoption of cloud and data center technologies is lagging behind other markets, largely due to trust issues and a cautious approach to technology transitions. The conference emphasized the importance of local manufacturing, with companies like Coleman producing fiber cables domestically. Challenges such as unreliable grid power and poor transport logistics remain significant hurdles.
Executive Director, Tranos Contracting, Babatunde Edun, explored the opportunities of renewables for aggregated power in Nigeria beyond the national grid. He said with the regulatory framework for energy becoming more dynamic in Nigeria, renewables, especially solar will become more mainstream.
“Solar will eat everything up,” he said, predicting that solar panel manufacturing in Nigeria alone will be at least 2 gigawatts (GW) per annum, with increased funds available for renewables.
The dialogue highlighted the necessity for collaboration among stakeholders, including partnerships with educational institutions to improve workforce readiness and explore alternative energy solutions like solar power. Participants agreed that political will and a conducive regulatory environment are crucial for attracting investment and enhancing the ease of doing business in the region.
Head of Technical Operations at Raxio Group, Adewole Adebisi, stressed the need for increased regulatory involvement from governments to address power challenges in the region. He urged the creation of technology and industrial parks that include power manufacturers as key stakeholders.
Regional Executive, Africa Data Centres, Dr. Krishnan Ranganath, agreed no less and highlighted the Lekki-Ajah corridor which he said is home to many subsea cable operators and data centers. He called for targeted power projects in this area to effectively tackle the ongoing power issues.
There was a renewed commitment among industry leaders to confront these challenges and leverage the promising opportunities that position data centers as one of the hottest asset classes in the industry today. With transaction sizes reaching new heights and a clear path for growth, the stakeholders agreed that the future of data centers in Africa looks increasingly bright.
Source: thenation