by Jonathan Duncan, Schneider Electric
Africa is by far the most exciting region when it comes to digital growth. Every one of the continent’s indicators points to massive demand for both connectivity and content. Sub-Saharan Africa’s population is growing at 2,7% a year and could reach two-and-a-half billion by 2050.
Africa’s young population is hungry for more, cheaper Internet access. As are businesses. In the space of less than a year, Covid-19 has done more for digital growth than a decade of planning and investment ever could. Online demand is soaring. One example is that of our e-commerce partner Jumia, which saw a 400% increase in sales for essential items during the last half of March 2020 vis-à-vis 2019.
But it’s not all plain sailing. There are issues around high data costs and high latency. And there are questions about network connectivity in-country, and away from coastal areas. The one common denominator is the data centre, or often the absence of data centres.
We need more African data centres. To give you an example of how few there are, let’s compare the amount of data centre space available on the whole continent with London. Last year, London’s data centre space was 260 000m2; in comparison, Africa’s total space was estimated at 861 207m2.
There’s also a challenge when it comes to the distribution of data centres across the continent. Nearly half, 31 to be precise, of Africa’s 67 colocation facilities are based either in South Africa or Nigeria. Kenya follows with seven, and Morocco with five. The irony of the Internet is that most African websites are hosted in Europe.
Does it matter where a data centre is based?
The closer a data centre is to the user, the faster that user will be able to access information and use services hosted at the data centre. The data centre’s location also impacts reliability. And like with any service, the more capacity that is offered, the lower the cost will be.
Data centres are the basis for digital transformation. And we’re going to need many more data centres everywhere across the continent to power economies, speed up connectivity and reduce the overall costs for server-hosted services.
There are two basic challenges when it comes to building tech infrastructure in many parts of Africa, especially outside South Africa and Nigeria. The first is funding. We need more investment, much more. The African Development Bank estimates that the continent needs a total infrastructure investment of between US$130-billion and $170-billion a year. Today, the financing gap is between $68-billion and $108-billion.
We need to attract more private investment. The amount of money flowing into the data centre space has edged up this year – with one example being a deal in March, when emerging-markets investor Actis bought the Rack Centre in Lagos and announced plans to invest US$250-million to buy and build African data centres.
Growth potential
Given the potential for growth, one would think money would be pouring in. Africa’s data centre market is expected to grow at a compound annual growth rate of 12% between 2000 and 2025, to hit $3-billion. And much of that demand will come from cloud adoption – 70% of organisations on the continent will move their data and applications to the cloud by 2025. Data centre growth will be double digit for the foreseeable future.
Another issue which must be addressed is energy and climate. North Africa is hot and dry, whereas central Africa is humid. Both can pose particular challenges when building a data centre. Power supply reliability is another challenge; data centres need lots of power, and they don’t do well with power outages. As the power quality improves across the region and power costs decrease, there will be more confidence in building local data centres.
Smart players are already investing in technologies which reduce power usage. A Tunisia-based customer, Dataxion, runs the largest colocation facility in North Africa. Working with Schneider Electric, they reduced their energy costs by 35%, which is no mean feat given that temperatures often reach 34°C in summer. Dataxion uses the climate to their own benefit, by installing solar panels which provide a significant amount of power for the facility. This cuts power costs and makes the data centre greener and more sustainable.
There is huge potential for growth in Africa so we should start investing in data centres across the continent.
Contact Sli Dumakude, Schneider Electric, Tel: 011 254-6400, sli.dumakude@se.com
