Challenges in Data Centre Deployment in Africa

Building data centres in Africa is increasingly starting to grab the industry’s attention. What are the key issues that are influencing the growth of data centres in Africa?

The DC industry continues to thrive globally and the big players are still seeing strong growth in mature markets and hence they have little incentive to start looking at smaller DC’s in what is still perceived to be a high-risk market. The players who are getting into Africa are going to be ‘specialists’ who see the niche and want to get a foothold early. Not that there is going to be a shortage of opportunity – as the installed base in Africa is still miniscule.

The quality and nature of that installed base is variable with very few Tier 3 let alone Tier 4 DC’s and many are in-house telco DC’s. Carrier neutral colocation DC’s are few and far between. There-in lies the opportunity.

There is more than sufficient submarine capacity and there are ongoing terrestrial fiber projects in many parts of the continent. An aspirant player should be looking at establishing a regional presence in each of the major nodes – West / East / South in SSA and perhaps some presence in the Maghreb.

Standout quote by one of the top execs at Onix to backup the above paragraph.
– Name here

A key logistical challenge is power. Africa is hopelessly underpowered with only about 20% of Africans able to enjoy any kind of reliable utility power. Hence for a power hungry industry an alternative approach is necessary. Running generators will be expensive in the long term – but it has served the mobile industry well in some parts of the continent.

An off-grid solution using renewable sources is the only really viable long term solution for the DC industry. Due to high costs in Africa it behooves operators to be even more efficient operationally. Hence the operation of the data centre becomes an imperative and so highly efficient cooling, power management, support and maintenance becomes even more important to ensure that healthy margins are maintained.

The issue of data sovereignty has come to the fore as regulators get into sync with their European counterparts. The importance of data sovereignty is being acknowledged increasingly by the banking regulators (the Central banks) who are also demanding greater compliance in respect of data handling by, for example, demanding of the retail banks that they invest in suitable disaster recovery facilities. This is where carrier neutral colocation DC’s have a role.

There needs to be a fundamental underlying demand to justify the strategy to embark upon investment in new DC’s. While mobile penetration is relatively high – the broadband penetration is still low. Demand for broadband is driven by:

  • Smart phone growth and the associated apps
  • The big Internet companies seeking to establish a local presence – these being Microsoft, Amazon, Google, Netflix and Facebook ( the FANGs)
  • An ongoing reduction in data tariffs by the mobile operators
  • Increased appetite for digital services on the mobile such as banking

The challenges mentioned above are ‘hard’ or technical in nature requiring technical solutions. There will be local construction and Mechanical & Electrical capacity and they can be sourced and managed. These hard challenges are not insurmountable.

What is a lot more challenging about setting up operations in African countries is the ‘soft’ challenges. This is getting to understand how business works locally. Who are the decision-makers? What licences and permits are required? Which local banks can provide funding? What are the laws relating to land ownership? And so on.

Generally if these issues are not addressed sensitively and with acknowledgement to local customs they can prove to be the most problematic. This can lead to long delays or perhaps even to the project never happening. Aspirant African operators need to invest in these skills.


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