A population explosion in Africa is driving the need for more data centres on the continent.

This is one of the findings of a Broll Property Group report on the rise of data centres in Africa, which finds that A young population provides Africa with a population base that both wants and expects to explore the online digital world to expand their knowledge and interact with friends, family and business. A massive uptake in overall data needs is a direct result of this trend.

In addition, economic diversification will result in a digital transformation which is already evident in broadband adoption across the continent with the user base set to double over the next decade.

The report states that the growing interest in infrastructure investment in Africa is very encouraging, particularly from a data centre perspective with increasing investment in water, energy and ICT.

Currently, fewer than 2% of the world’s colocation data centres are based in Africa, of which the largest percentage is located in South Africa.

And, even though Africa appears to have many hurdles for data centre investors, the fact remains that Africa has tremendous potential for the establishment of data centres.

The report points out that the development of infrastructure is one of the main drivers of economic growth with the demand for adequate infrastructure high in Africa.

A recent report by the African Development Bank, states that infrastructure development accounts for over half of improved economic growth in Africa and has the potential to achieve even more.

Realising the importance of infrastructure growth, African governments are investing more into infrastructure, according to the Broll report. The Infrastructure Consortium for Africa (ICA) estimates that annual funding for infrastructure development was $77-billion between 2013 and 2017 – which was double that for the first six years of the century.

Overall infrastructure investment increased by 24% in 2018 to $101-billion with national governments investments accounting for 37,5% of total infrastructure investment.

There are a number of key constraints in the South African context resulting in “stop-start” progress of data centre investment. Power supply and cost, the supply of sufficiently serviced land in key locations, as well as security concerns are the most notable hurdles.

Despite this, the Broll report expects data centre activity and related data services to continue to expand as various players continue to operate across the colocation and managed services/cloud spaces. This is largely dominated by already established players such as Teraco and Africa Data Centres (ADC).