• 93.6% of industry players expect strong or moderate growth for African data centers

• Investment intentions remain high, with 77.4% likely to inject new capital

• Main growth drivers include rising data consumption and cloud service demand

Africa’s data center industry is set for steady growth over the next year, with an average expansion rate of 17.5%, according to a new report from the Africa Data Centers Association (ADCA) and consultancy firm Rising Advisory.

The study, published on June 23, surveyed 31 senior executives from companies active in Africa’s data center market. These included data center operators, specialized equipment manufacturers, and firms involved in design and construction of such infrastructure.

The report, titled “Data Centers in Africa: Where Do Decision Makers See the Sector Heading?”, reveals broad optimism among industry leaders. About 22.6% of respondents expect significant industry expansion over the next 12 months, while 71% forecast moderate growth. Importantly, no participant expects a downturn, highlighting continued confidence in the sector despite persistent challenges around infrastructure, public policy, and investment conditions.

Investment Confidence Remains High

The cautious optimism is also reflected in investment intentions. When asked about the likelihood of their companies making significant capital investments over the next year, 77.4% of respondents said it was “very likely” or “likely.” Meanwhile, 19.4% were neutral, and just 3.2% viewed such investment as “unlikely” or “very unlikely.” These results point to sustained confidence but also some hesitation due to uncertainties over project timelines, regulation, and financing access.

The survey also found that 80.6% of industry leaders view the current business climate for African data centers as either “very favorable” (29%) or “rather favorable” (51.6%). Around 16.1% expressed a neutral stance, and only 3.2% consider the business environment “rather unfavorable,” suggesting the sector is growing, though not as quickly as some had hoped.

Solid Market Fundamentals

Despite strong fundamentals, the gap between market potential and actual growth persists, mainly due to structural and operational constraints. Respondents cited the delayed arrival of large-scale hyperscalers on the continent as a key reason for tempered expectations. Additionally, global capital is increasingly flowing toward AI-related infrastructure in more mature markets, often at the expense of African projects.

Still, demand for local hosting and cloud services continues to rise, financing remains generally accessible, and the sector is expanding steadily. Growth is largely driven by rising data consumption, increasing internet penetration, and stronger demand for cloud services. By contrast, factors like public policy, edge computing, and artificial intelligence are seen as having less influence on current growth.

Key Challenges and Regional Integration

The biggest challenges to expanding Africa’s data center infrastructure are a shortage of skilled professionals, unreliable electricity supply, and regulatory uncertainty, in that order.

As for the African Continental Free Trade Area (AfCFTA), most industry players believe its implementation has had little effect on the data center market so far. This is attributed to the early stage of the trade zone rollout and the lack of tangible outcomes in infrastructure-heavy, tightly regulated sectors like data centers.

Looking ahead, stakeholders expect that deeper regional integration could bring significant benefits. These include increased investment and market expansion (24.4%), harmonized regulations and policies (24.4%), greater cross-border data flows (19.5%), and lower equipment costs (14.6%).