South Africa, Kenya, Nigeria and Egypt lead digital infrastructure growth

Africa’s data center market is on track to attract $8.76 billion in investment by 2031, underlining the continent’s growing importance as a global digital infrastructure destination. According to research by Arizton, the market is forecast to expand at a compound annual growth rate (CAGR) of 15.76%, driven by increasing cloud adoption, artificial intelligence (AI) workloads, enterprise digital transformation and expanding internet connectivity.

The report highlights that Africa’s colocation data center segment will grow even faster, recording a projected CAGR of 23.74% through 2031 as businesses increasingly seek scalable, carrier-neutral infrastructure.

Lower development costs drive new investment opportunities

Several African markets are emerging as attractive destinations for data center investment due to competitive construction costs and improving digital infrastructure.

Egypt remains one of the continent’s most cost-effective markets for new developments, with data center construction estimated at $8 – 10 per watt, making it an increasingly attractive destination for investors.

Investment activity continues to spread across the continent. In March 2025, Vodacom commissioned a new $25 million carrier-neutral data center in Maputo, directly connected to the 2Africa subsea cable, significantly strengthening Mozambique’s international connectivity.

Beyond the continent’s established markets, countries including Morocco, Djibouti, Ethiopia, Ghana, Tanzania, Uganda, Mozambique, and Gabon are expected to collectively attract approximately $1.36 billion in data center investments by 2031.

Further supporting this trend, in January 2026 RailTel Corporation of India secured a contract worth approximately $2.2 million to develop a government data center for Ethiopia’s Ministry of Foreign Affairs in Addis Ababa, supporting the country’s Digital Ethiopia Strategy.

Established data center hubs continue to dominate

While new markets are emerging, South Africa, Kenya, Nigeria, and Egypt continue to account for a significant share of Africa’s data center investment.

These markets benefit from mature telecommunications ecosystems, stronger international connectivity, expanding digital economies and growing enterprise demand for cloud computing and colocation services.

Meanwhile, North African markets such as Morocco and Tunisia are attracting growing investor attention due to their strategic proximity to Europe and extensive submarine cable connectivity, positioning them as important interconnection hubs between Europe, Africa and the Middle East.

Renewable energy becomes a strategic advantage

Energy availability is becoming one of the defining factors influencing future data center investments across Africa. With growing demand for AI computing and cloud services placing additional pressure on electricity networks, operators are increasingly integrating renewable energy into their long-term infrastructure strategies.

Africa’s significant solar, wind and hydroelectric resources offer opportunities to improve energy security while reducing operating costs. The transition is already underway. In 2025, Teraco signed a wind energy supply agreement in South Africa, while Egypt continues expanding large-scale solar and wind generation projects to increase renewable electricity capacity.

Reliable access to renewable power is expected to become an increasingly important competitive advantage as developers evaluate future data center locations.

Submarine cable expansion strengthens digital infrastructure

Continued investment in submarine cable systems is reinforcing Africa’s digital infrastructure and creating favourable conditions for future data center expansion. As cloud adoption, AI applications and digital services continue to grow, governments and private sector investors are expanding international connectivity to increase network capacity and improve resilience.

Egypt remains one of Africa’s most strategically connected digital gateways, supported by 17 operational submarine cables and six additional systems currently under development, linking Africa with Europe, the Middle East and Asia. Kenya is also strengthening its international connectivity through new submarine cable investments.

The widespread submarine cable disruptions experienced across West Africa during 2024 have further underscored the importance of network diversity and redundancy. As a result, resilience is becoming a key consideration for future investments in digital infrastructure, supporting the continued expansion of Africa’s data center ecosystem.

Conclusion

Africa’s data center market is entering a period of sustained expansion, driven by rising digital demand, improving connectivity, competitive development costs and growing investment in renewable energy. While established markets continue to anchor the sector, an increasing number of emerging economies are positioning themselves as viable destinations for new digital infrastructure. As cloud adoption, artificial intelligence and enterprise digital transformation accelerate across the continent, continued investment in resilient, energy-efficient and well-connected data center ecosystems will play a critical role in supporting Africa’s long-term digital economy.

Source: Africa Business community