The internet economy in Africa is creating a rise in investment

Africa’s data centre business is likely to draw billions of dollars in investment as the continent’s digital economy grows. According to new statistics, the data centre industry in Africa and the Middle East attracted $6.55 billion in investments in 2021 and will draw an additional $12.19 billion by 2027, with half of it going to the continent.

As pandemic-related shocks spur a spike in cloud computing as more firms go digital to stay competitive, data centre investment in Africa has risen.

According to ReportLinker, the sector consumed $2.6 billion in 2021, with $5.4 billion expected to be invested in the next five years alone.

It also demonstrates that, over the projected period, data centre markets in South Africa, Kenya, Egypt, Nigeria, and Ethiopia would receive the lion’s share of investment into the sector on the continent. Morocco, Algeria, Ghana, and the Ivory Coast are some of the other countries that have seen significant investment.

Africa Data Centres, Icolo.Io (Digital Realty), IXAfrica, and MainOne are among the leading data centre investors in Africa, according to ReportLinker, an AI-driven market information platform (MDXI).

Big participants in the field include Telecom Egypt, NTT Global Data Centres, Paratus Namibia, Rack Centre, Raxio Data Centres, Teraco Data Environments (Digital Realty), and Wingu.

“By 2021, there will be more than nine data centres in Africa, each with a white floor area of 30,000 square feet or more. Several countries are taking steps to build special economic zones and industrial parks, which offer tax breaks for data canter development,” according to the research. According to ReportLinker, an increase in submarine cable investment and fibre connection in the region is anticipated to attract more data centre investments. The country with the most undersea cable deployments is South Africa, followed by Nigeria and Kenya.

While the Internet of Things (IoT) is not a novel concept in Africa, Covid-19 has compelled businesses who had previously been hesitant to digital transformation to embrace it.

This includes restaurants, where more people are ordering food online, as well as the retail, logistics, and education sectors, which are being driven to implement digital solutions in order to stay up with demand, satisfy new expectations, and retain customers.

To guarantee that their supply chain is not affected, these organisations are increasing need for data centres to store, communicate, and transfer data in a seamless manner.

Given that much of Africa’s data is currently housed overseas, whizzing along undersea cables that frequently reach shore in locations like Marseille, France, there is an opportunity for investors to fill substantial gaps.

According to The Economist, “it can take 180 milliseconds for a message to reach Europe and return” from the continent’s southern edge, “long enough to irritate individuals attempting to trade shares or play games.”

However, new multibillion-dollar investments in data centres will bring the internet considerably closer to people, setting the groundwork for Africa’s tech revolution to advance.

According to ReportLinker, cloud usage in South Africa is expected to grow at a rate of 25% per year, producing up to $1.5 billion by 2024.

“In South Africa’s data centre and networking market, SaaS (Software as a Service) solutions are extensively accepted, followed by IaaS (Infrastructure as a Service) solutions,” according to the research.

“Eskom, a South African utility company, stated in September 2021 that it will invest roughly $7 billion on renewable energy programmes over the next nine years. This will fuel demand in the data centre market in South Africa.”

According to Allied Markets Research, the worldwide data centre market was worth $187.35 billion in 2020 and is expected to reach $517.17 billion by 2030, representing a 10.5 percent increase from 2021 to 2030.

Global cloud service providers such as AWS, Microsoft, IBM, and Oracle are expanding their presence with new cloud regions, according to ReportLinker.

As a result, it claims that “vendors have a potential to grow in suburban regions and boost demand for hyperscale data centres in Africa.”

The data centre market in Africa is also becoming a hub for mergers and acquisitions.

Equinix stated in December 2021 that it would pay roughly 320 million dollars to acquire MainOne data centres in order to expand its operations in Africa, according to the data platform.

“With new innovative infrastructure technologies, new players in the Africa cloud data canter have a tremendous potential.” Furthermore, because global data centre operators are acquiring existing data centres in the region, the threat of acquisitions is considerable.

Arista Networks, Atos, Broadcom, Cisco Systems, Dell Technologies, Fujitsu, and Hewlett Packard Enterprise are among the IT infrastructure providers.

Hitachi Vantara, Huawei Technologies, IBM, Inspur, Juniper Networks, Lenovo, NetApp, and Oracle are all significant players in this market.

Oracle has established Africa’s first cloud computing data centre, marking the company’s 37th cloud area worldwide.

4Energy, ABB, Caterpillar, Cummins, Delta Electronics, Eaton, EVAPCO, Enlogic, and Legrand are among the support infrastructure providers, according to ReportLinker.

Master Power Technologies, Rittal, Rolls-Royce, Schneider Electric, Siemens, STULZ, and Vertiv are among the other companies.

Abbeydale, Advanced Vision Morocco, ARSMAGNA, Arup, Atkins, B2 Architects, and CAP DC are the largest data centre construction contractors, according to ReportLinker.

Chess Enterprises, Copy Cat Group, Eastra Solutions, Edarat Group, EDS Engineers, Egypro, H&MV Engineering, Ingenium Engineers, and Interkel are all major players in the business.

JLB Architects, MWK Engineering, Orascom Construction, Royal HaskoningDHV, Shaker Group, Summit Technology Solutions, Tri-Star Construction, United Egypt, and Westwood Management are among the others.

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