Africa’s Data Centre Landscape: Growth, Challenges and Strategic Opportunities
Africa is home to 20% of the global population but only accounts for 0.6% of global data centre capacity. This stark disparity highlights the continent’s underdeveloped digital infrastructure, despite its significant potential. According to the 2026 Economic Report: Data Centres in Africa, published by the Africa Data Centres Association (ADCA) in collaboration with Rising Advisory, Africa’s active data centre capacity stands at 360MW, with 238MW under construction and 656MW in the pipeline.
In contrast, the global data centre market has an active capacity of 5.5GW, with 1.5GW under construction and a development pipeline of 13.5GW. Even if all of Africa’s announced projects come to fruition, the report suggests that the continent will maintain its current share rather than increase it, as other regions continue to expand their data centre capabilities.
Faith Waithaka, chairperson of ADCA, emphasizes that this is not a catch-up cycle but a race to avoid deeper structural marginalization in global compute. She notes that capacity development in Africa must be approached with a long-term perspective, recognizing that infrastructure growth will precede full utilisation as digital ecosystems evolve.
Sustainability is now a central consideration for the sector. Improving energy efficiency and integrating renewable energy sources are essential to the viability of data centre operations. Africa is uniquely positioned in this regard, with vast untapped potential across solar, wind, hydro, and geothermal resources. Leveraging these assets can support greener data centres while strengthening energy security and long-term competitiveness.
South Africa: A Key Player in Africa’s Data Centre Expansion
South Africa is considered the “sweet spot” in Africa’s data centre market, with the sector projected to reach $4.36 billion by 2031, according to Mordor Intelligence. The country is the largest data centre market on the continent, with 55 data centres already built. Its geographical position also makes it a strategic hub for regional and international connectivity.
Major firms such as Digital Realty-owned Teraco, Vantage Data Centres, Open Access Data Centres, and Equinix have expanded their data centre footprint in South Africa. Additionally, hyperscalers like Amazon Web Services (AWS), Google, and Microsoft Azure have established local data centre facilities.
President Cyril Ramaphosa has highlighted the country’s data centre momentum, noting that more than R50 billion in investment is expected in the local data centre space over the next three years. This growth has also prompted the government to call for accelerated cloud migration, as part of its digital transformation efforts.
The Global Data Centre Boom
The global data centre industry is booming as demand for this “digital gold” accelerates. Valued at $243 billion in 2025, the market is projected to double by 2032, according to the World Economic Forum. Meanwhile, UN Trade and Development reports that data centre projects accounted for over one-fifth of all greenfield foreign direct investment in 2025.
This surge reflects the growing need for artificial intelligence (AI) infrastructure, cloud services, and digital networks, positioning data centres as indispensable assets driving global growth strategies. Several converging trends are driving this expansion, including cloud adoption, which continues to shift workloads off-premises, and AI and big data, which are reshaping infrastructure needs.
Hyperscale facilities—operated by giants like AWS, Microsoft, Google, and Alibaba—have doubled in number roughly every five years, with hyperscale capital expenditure rising nearly 58% year-on-year in 2024. Governments across Asia, the Middle East, and Africa are offering incentives to attract greenfield projects, recognizing data centres as foundations for innovation, skilled employment, and adjacent industries like fintech and AI.
Legal and Regulatory Developments
As the data centre market grows, data sovereignty has become a policy reality. As of early this year, over 40 African nations have enacted data protection legislation or established data protection authorities, while five additional countries are drafting laws. Additionally, 15 countries have formalised national AI strategies.
According to the ADCA report, these frameworks aim to protect citizens’ rights while providing legal certainty for investors and digital service providers. Governments are increasingly recognising data centres as critical national infrastructure, central to digital sovereignty, financial stability, and AI competitiveness.
Data sovereignty—the principle that data generated within a country should be governed by that country’s laws—has evolved from a legal aspiration into a strategic policy lever, shaping investment patterns, infrastructure deployment, and the localisation of digital value chains.
Even with these frameworks, enforcement capacity often lags legislative ambition, as noted in the report. World Bank and GSMA assessments highlight constraints linked to staffing, funding, and technical expertise. However, this enforcement gap also represents a growth opportunity: stronger, more predictable regulation is increasingly seen by investors as a prerequisite for scaling local digital infrastructure.
The Path Forward
Clear localisation and data-protection requirements create predictable demand for compliant, in-country infrastructure, improving bankability for data centre projects and attracting long-term capital. Data localisation policies are emerging as part of this broader regulatory maturation. When aligned with market realities, localisation can strengthen oversight, improve accountability, and support the development of domestic data centre ecosystems.
