Africa’s data center market is booming but exposing deep cracks

As the world edges deeper into the digital age, Africa is emerging as one of the fastest-growing frontiers for internet use, mobile technology and cloud computing, even as access to reliable electricity remains uneven across the continent.

A new report by the African Energy Chamber (AEC) shows that while digital penetration in many developed markets is nearing saturation, Africa’s low base presents enormous growth potential. 

Smartphone adoption in sub-Saharan Africa is projected to jump from 51% in 2022 to 87% by 2030, driven largely by a youthful population and falling mobile data costs, according to the GSMA Mobile Economy Report 2023.

With mobile data usage expected to nearly quadruple by 2028, and emerging technologies such as fintech, artificial intelligence and machine learning gaining ground, Africa’s digital appetite is accelerating rapidly. 

These technologies, particularly generative AI, consume significantly more energy than traditional internet services, intensifying pressure on computing infrastructure.

So far, much of Africa’s data processing needs have been handled by data centers in Europe. 

However, rising demand for faster speeds, lower latency and stricter data sovereignty rules is pushing countries to invest in local facilities. 

As of mid-2025, Africa hosts just 223 data centers across 38 countries, less than 0.02% of the global total of over 11,800 facilities.

South Africa leads the continent with 56 data centers, followed by Kenya with 19 and Nigeria with 17. 

Together, the three countries account for about 41% of Africa’s data center infrastructure.

In The State of African Energy: 2026 Outlook Report, the AEC argues that expanding cloud and data infrastructure in these key markets could act as growth hubs for the rest of the continent. 

The African data center market was valued at $3.49 billion in 2024 and is projected to reach $6.81 billion by 2030, growing at a compound annual rate of 11.79%.

However, the expansion comes with a major challenge: power. Data centers require constant, reliable electricity, something many African grids struggle to provide. 

Nigeria, for example, has an estimated data center power demand of 137 megawatts in 2025, yet its national grid often delivers just a few hours of electricity per day. Operators are forced to rely heavily on diesel generators, driving up costs and emissions.

Across the continent, data center power demand is expected to grow at a CAGR of 9% between 2024 and 2030, reaching 2 gigawatts by the end of the decade. By comparison, global data center capacity is forecast to reach 249 gigawatts by 2030, excluding cooling and auxiliary loads.

Despite the strain, the AEC notes that data centers can play a stabilising role in Africa’s energy sector. Their predictable, long-term demand makes them attractive anchors for investment in power generation and grid expansion, including renewable energy projects and advanced grid management systems.

Northern African countries such as Egypt and Morocco are already leveraging strategic locations along global internet backbones, affordable power, and improving regulatory environments to attract investment. 

In sub-Saharan Africa, South Africa remains the largest market, with growing demand around Johannesburg and Cape Town and increasing integration of solar power into data center operations.

Kenya stands out for its renewable-heavy energy mix, with over 60% of its electricity generated from geothermal, wind, solar and hydro sources. 

A planned 100-megawatt green data center in Naivasha, backed by a $1 billion investment from Microsoft and G42, is expected to tap into the country’s geothermal resources. Government incentives, including corporate tax breaks in special economic zones, have further boosted Kenya’s appeal.

Smaller economies are also making moves. Côte d’Ivoire has expanded solar capacity, Senegal hosts West Africa’s largest wind farm, and Gabon is developing hydropower and solar hybrid systems to support future digital infrastructure.

Still, the report cautions that not all countries are equally positioned to host data centers, citing water scarcity for cooling and limited renewable potential in some regions. The AEC recommends a balanced energy strategy, including regional power pooling and the use of natural gas as a flexible transition fuel to support reliability.

While Africa’s electrification challenges remain complex, the report concludes that growing local data center capacity could help address critical national priorities, from economic growth and infrastructure development to data security, as the continent races to meet surging digital demand.