Africa is set to see its data center sector growth surge at an average 17.5% y-o-y over the next year, with 93% of respondents confident that the sector will experience strong to moderate growth, according to the African Data Center Association (ADCA) insider survey (pdf).

The findings: The report finds that 77.4% of companies are planning to make significant investments within the next year, with an average profitability rating of 3.3 out of 5. Optimism for the sector was high as well, with over 80% of respondents considering the business climate in the region’s sector as favourable despite barriers to entry, such as access to reliable energy sources, financing hold-ups, and some regulatory constraints.

Investment hotspots: Egypt, Kenya, Nigeria, and South Africa are emerging as the continent’s top destinations for data center investments, Rising Advisory’s Emilie Wilson told EnterpriseAM. “In all these cases, a common driver is the need for low-latency, locally hosted cloud and content services, supported by improved financing conditions and government-backed digital agendas,” Wilson said.

Egypt is attracting renewed interest as a regional hub, largely driven by its strategic location, government-led digital initiatives, and major investments in connectivity infrastructure, Wilson told us. A “reliable power grid” and strong demand for internet and cloud services stand as strong incentives for data center expansion in the country, Wilson added.

Meanwhile, Kenya and South Africa are also seeing a growing presence of hyperscale providers, Wilson said, pointing to a “deepening confidence in these markets’ long-term viability.”

Other factors driving the “cautiously optimistic” view of the business climate in Africa are both “structural and market-specific,” Wilson told EnterpriseAM. These factors include surging digitization and data consumption, robust demand for cloud services, improving financing conditions, and rising attention to operational resilience, power reliability and sustainability. “Investor sentiment reflects a shift from speculative enthusiasm to more measured, execution-focused confidence,” Wilson added.

METHODOLOGY- The survey is based on in-person interviews with senior executives across several African countries. Africa-focused consultancy Rising Advisory analysed the results of the survey to produce insights into six dimensions of the sector: business climate, growth drivers, financing, innovation, human capital, and regional integration. Some 35.5% of respondents operate in North Africa and about 22.6% has established a presence in Egypt, Wilson said.

DATA POINT- The African continent accounts for just 307 MW of total data center IT load capacity — representing less than 1% of the world’s capacity of 59 GW, Wilson said.

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