Summary

The Africa Data Center Market is projected to register a CAGR of 15.41%

Key Highlights
IT Load Capacity: The IT load capacity of the data center market will have steady growth and is expected to reach 1226.8 MW by 2029.
Raised Floor Space: The total raised floor area of the country is expected to increase to 5.2 million sq. ft by 2029.
Installed Racks: The number of installed racks is expected to reach 260,783 units by 2029. South Africa is expected to house the maximum number of racks by 2029.
DC Facilities: There are 37 colocation data center facilities in Africa. South Africa holds the highest country-wise share in the region. Growing connectivity, increasing demand for cloud services, and rising government incentives for land and tax are a few factors that have accelerated the growth of data center facilities in Africa.
Leading Market Player: Teraco Data Environment led the market in 2022, with a share of 35.65% and an operational capacity of 150 MW. The company has announced plans to launch a 30 MW hyperscale facility in Ekurhuleni, South Africa, east of Johannesburg.

Africa Data Center Market Trends

Tier 3 is the largest Tier Type

Increasing developments in artificial intelligence, IoT, and blockchain technology across varying sectors, including telecom, cloud, and government, have contributed to the growing data consumption in Africa.
Africa has more than 400 technology hubs across 93 cities in 42 countries. In 2022, the African start-ups raised about USD 4.8 billion through 1,000 deals, compared to about USD 4.33 billion raised across 820 rounds in 2021. These technology start-ups may require low latency and high-speed, uninterrupted internet and cloud facilities to ensure continuous customer service. The increasing demand for better infrastructure may fuel the demand for more IT load capacity and more Tier 3 and 4-certified data center facilities.
The long-term growth vision is better suited to set up at least Tier 3-certified data centers to cover the initial high cost of establishing the facilities. However, Tier 1 & 2 facilities were losing traction, given the limited power availability. Hence, to ensure the longevity of investments and tackle the increasing demand for faster and more reliable data storage and processing facilities, companies are focusing on constructing Tier 3 and 4 facilities.
Tier 4 data centers offer higher bandwidth speed, low latency, better connectivity, and disaster recovery options. Thus, during the forecast period, the Tier 4 segment is expected to record a CAGR of 18.02%, compared to the Tier 3 segment at 14.40% and the Tier 1 & 2 segment at 3.26%.

South Africa is the largest Country

South Africa is the most prominent country for data centers in Africa since the country comprises about 42 million internet users. It also has internet penetration rates closer to 70%, and its adaptation to e-commerce and other demand-generating aspects is growing. This, in turn, has led data center operators to set up their data center facilities in the region to leverage the increasing demand for the facilities.
South Africa held a market share of around 63.1%, followed by the Rest of African countries at 24.4%, and Nigeria accounted for 12.4% in 2021. The company that has strengthened its market share in South Africa is Teraco Data Environments (acquired by Digital Realty), which currently has a market share of 36.72% and operates at an IT load capacity of 150 MW. Through its subsidiaries, Medallion Communication Ltd and Teraco Data Environments, companies such as Digital Realty have announced plans to develop mega and massive data centers with IT load capacities of 160 MW and 110 MW during the forecast period.
Cape Town has been ranked among the top smart cities worldwide for its IoT and real-time data analysis through sensor implementation. Smart cities create huge amounts of data owing to the varying smart services imparted to the citizens.
The country is expected to witness more such smart cities as operators plan to extend the deployment of IoT-based devices. The Rest of Africa segment also comprises smart cities like Kigali, Rwanda, which have sensors to measure air quality, monitor the power grid's safety, and detect water leakages. Due to all the above factors, the South African data center market is expected to grow and register a CAGR of 15.68% over the forecast period.

Africa Data Center Industry Overview

The Africa Data Center Market is fairly consolidated, with the top five companies occupying 67.54%. The major players in this market are Africa Data Centres (Cassava Technologies), Open Access, Rack Centre Limited, Teraco Data Environments (Digital Realty) and WIOCC's OADC (sorted alphabetically).

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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