… ZLECAf to allow companies to reinvest their profits in new geographical areas at reduced costs
AFRICA is currently underserved in terms of data center (DC) capacity, accounting for 1% of the global total.
To close this gap, approximately 700 new installations are needed to meet the growing demand for DC services and put capacity density on a level playing field.
Africa has 140,000 square meters of DC space shared among just over 100 DCs, similar figures to Switzerland alone.
Oxford Business Group (OBG), which disclosed this in its Africa Data Center report, said efforts to close this capacity gap will lead to the continent’s market expansion at a compound annual growth rate. by 12% between 2019 and 2025, reaching a value of $ 3 billion.
This, according to the group, should make operating and supplying CDs a very profitable business in Nigeria, South Africa, Kenya and other parts of the continent.
The report claimed that the African DC market size by investment is $ 2 billion in 2020 and is expected to reach $ 5 billion by 2026, with a CAGR of 15% from 2021 to 2026.
Referring to the February 2021 report by Xalam Analytics and the Africa Data Centers Association, the report states that Africa needs to find 1.4-3.5m² of well-located and properly stocked land to facilitate the construction of the DC infrastructure needed to deal with a problem. growing capacity deficit, about half of which in Nigeria, Egypt, Algeria and Ethiopia.
Taking this into account, OBG predicted that more than half of the world’s population growth by 2050 is expected to occur in Africa, increasing the demand for mobile data services from an increasingly young consumer base and connected to the Internet.
The report observed that as the global economy recovers from the COVID-19 pandemic, funding will likely remain limited for medium to high risk initiatives, including DC operations in Africa. He noted, however, that securing real estate and reliable energy sources, in addition to navigating complex political and security environments, would likely increase costs and require the support of officers in each jurisdiction.
To overcome some of these challenges, OBG said Africa can emulate economies such as China by deploying leapfrog technologies and avoiding issues with legacy systems and interests. He pointed out that with the combination of regional cooperation and business leadership, and engagement with international standards bodies, Africa can set continent-wide standards that nurture a sustainable DC industry and energy efficient.
The report found that DC operators are building new facilities in hot spots such as South Africa, Kenya, Nigeria, Egypt and Ethiopia. He described this as an urgent task, as the African Continental Free Trade Area (AfCFTA) should cut red tape and allow successful businesses to reinvest their profits in new geographies at a reduced cost.
OBG said this would increase barriers to entry for new players, and especially those who lack the financial resources to invest in AI, adding that a series of large-scale investments have already been made. advertised across the continent, with more chances to follow once the viability of a business case is proven.
The report explains that the AfCFTA treaty contains provisions for the creation of a continent-wide customs union and aims to create an online mechanism to monitor, report and eliminate non-tariff barriers, as well as a system Pan-African Payment and Settlement to enable African businesses to clear and settle intra-African trade transactions in their local currencies.
According to her, as of July 2021, 54 out of 55 African countries had signed the AfCFTA, of which 37 had ratified the agreement.
In the report, Association of African Data Centers (ADCA) President and Rack Center CEO Ayotunde Coker said the time has come for the DC industry to expand across the continent.
“The region has demonstrated its ability to innovate and technologically surpass mature markets: it’s happened with telephony, and it’s happening with fintech and countless other technological innovations.
“A large and young population, combined with increasing network penetration, is expanding access to high-speed telephony. Mobile telephony will remain the dominant Internet access point across Africa, where consumers continue to purchase products and consume content primarily through mobile phones. As a result, we are seeing strong fundamentals that favor Africa as a destination for data centers, ”he said.
OBG’s Managing Director for Africa, Karine Loehman, said that with the COVID-19 pandemic accelerating digitization, efforts are underway to attract the investments needed to unleash the continent’s full digital potential, with areas such as the strengthening of ICT skills and the deployment of infrastructure considered as priorities. .