• Raxio opens $30M Angola data center amid Africa-wide expansion

• Sector growth hampered by power issues, skills gap, regulations

• Firms adopt renewables, modular builds, and policy reform to scale

Raxio Group inaugurated a $30 million data center in Angola in early October, the latest step in an expansion plan supported by $100 million in financing from the International Finance Corporation (IFC). The investment highlights the strong growth potential of Africa’s still-nascent data center sector.

As of mid-2023, the continent accounted for less than 2% of global colocation capacity, with over half located in South Africa, according to an April 2024 Oxford Business Group report. The same source estimates Africa needs roughly 1,000 MW of capacity and 700 new facilities to meet surging demand. This growth trend is backed by Statista data, which projects that African data center revenues will rise from $8.96 billion in 2025 to $12.63 billion by 2030.

Ongoing Challenges to Growth

A June 2025 Africa Data Centres Association (ADCA) report, based on a survey of industry professionals in several African countries, rated key obstacles on a 1-to-5 scale.

The report found that barriers to expansion are moderate overall, though they vary widely by country. The top challenge is the shortage of qualified professionals (2.74/5), especially in Nigeria and South Africa, while Côte d’Ivoire, Senegal, and Kenya are better positioned.

Unreliable power supply ranked next (2.81), posing a major constraint in Nigeria and South Africa, but much less so in Côte d’Ivoire, Senegal, and especially Kenya. Regulatory uncertainty remains significant (2.97), particularly in Kenya and Nigeria, while access to capital was also cited as a key hurdle.

“Overall, the data confirms that while demand fundamentals remain strong, infrastructure growth hinges on resolving core structural constraints unique to each country, with significant disparities in terms of access to skilled talent, stable power supply, and predictable regulatory frameworks,” the report stated.

A May 2025 Xalam Market report listed additional hurdles, such as lengthy permit procedures, construction challenges in densely populated areas, land and zoning disputes, property rights issues, environmental compliance, and the high cost and complexity of equipment imports.

Unclear data protection and hosting laws, along with sector-specific compliance rules for public services, finance, and oil and gas, further slow development.

Market Data Forecast noted that high capital expenditure (capex) for construction and maintenance remains a major brake. Building Tier III or IV data centers demands heavy upfront spending on real estate, cooling systems, uninterruptible power supplies (UPS), and fiber connectivity. Low grid reliability inflates operating costs, forcing operators to rely heavily on diesel generators.

Meanwhile, the lack of harmonized regulations across African markets increases compliance complexity and creates entry barriers for international investors, while tax inconsistencies, import duties, and red tape add uncertainty and slow deployment cycles for smaller operators.

Proposed Solutions and Policy Measures

Industry stakeholders are pursuing several strategies to overcome these obstacles.

To address energy and sustainability challenges, Xalam Market reports that providers are tailoring solutions to local conditions. Examples include signing power purchase agreements (PPAs) with independent, ideally renewable, producers, building facilities near power sources, generating renewable energy on-site, and investing in innovative cooling technologies to improve efficiency.

An Intelligent CIO study notes that growing investment in renewables, spurred by green-economy policies, is improving energy reliability. On-site solar plants and power wheeling are becoming increasingly common. The study also highlights advanced cooling systems, such as liquid and free cooling, as key to reducing power consumption and improving sustainability.

Beyond energy, Intelligent CIO recommends modular data centers, prefabricated units that can be deployed quickly and scaled up on demand, lowering both costs and timelines. The study adds that advanced storage solutions, such as high-capacity HDDs for archiving and fast SSDs for real-time data access, form the backbone of digital services.

Finally, Market Data Forecast highlights the importance of policy reform and digital infrastructure programs. Pro-investment measures are simplifying procedures and attracting foreign capital in several countries, including South Africa’s National Development Plan 2030 and Kenya’s National Broadband Strategy. Egypt is also noted for using tax incentives to attract global hyperscalers.

Isaac K. Kassouwi