Business

Nigeria, others to earn $3bn from data centres

Opeke rues power challenge

Data centre operators in Nigeria and their counterparts in Africa are to rake in not less than $3 billion as revenue by 2025. This is according to the latest research by Oxford Business Group (OBG), a global research and advisory company. According to the report, the projection is based on the 12 per cent annual revenue growth rate from 2019.

“Increasing demand for cloud-based services and modular DC solutions from organisations, particularly small and medium-sized enterprises, and government agencies, will underpin the market, with more than 70 per cent of African organisations estimated to shift to the cloud by 2025,” OBG stated in the ‘Data Centres in Africa Focus Report.”

The report, which also features comments from data centre operators in Nigeria, highlighted the challenges facing the business on the continent. In her comments in the report, the Chief Executive Officer of MainOne, Ms Funke Opeke, said access to affordable, reliable and environmentally sustainable sources of electricity was a pressing issue for the grow ing number of data centre operators across Africa.

“These facilities need to ensure high availability of power to mitigate downtime, but many African countries face frequent power outages. “Existing data centres have relied on diesel-fuelled generators to fuel operations during power outages, a practice that could exacerbate carbon emissions in the future. “Indeed, the deployment of hyperscale data centre capacity is expected to increase emissions through further diesel- generator utilisation,” she noted. Opeke, whose company also operates one of the largest data centres in Nigeria, suggested a partnership between data centre operators and power distribution companies to address power challenge.

“By strategically locating data centres close to sources of power, partnerships can be made with local power distribution companies to build direct connections to the national grid. “This will ensure high power availability and reduce the utilisation of diesel-fuelled power generation,” she said. In his comments, the Chairman, African Data Centres Association (ADCA) and CEO of Rack Center, Mr. Ayotunde Coker, said the time was ripe for the DC industry to scale up across the continent.

“The region has demonstrated its ability to innovate and technologically leapfrog mature markets: it happened with telephony, and it is happening with financial technology and countless other technological innovations,” he said. “A large, young population, combined with growing network penetration, is expanding access to higher-speed telephony.

Mobile telephony will remain the dominant access point to the internet across Africa, where consumers continue to buy products and consume content primarily via mobile phones. As a result, we are seeing strong fundamentals that favour Africa as a destination for data centres,” he added. OBG’s Managing Director for Africa, Karine Loehman, said that with COVID-19 having accelerated digitalisation, efforts were underway to attract the investment needed to unlock the continent’s full digital potential, with areas such as ICT upskilling and infrastructure rollouts seen as priorities.

“Digital technology is expected to play a multifaceted role in steering Africa’s economic development, helping to improve its competitiveness, facilitate the overhaul of public services and strengthen food security. “Our research confirms that investors are already giving Africa’s digital economy an injection of the capital required, despite the somewhat challenging environment. With broadband internet access is seen as a key enabler of the digital economy and still lacking across much of Africa, we expect demand for DC services to gather momentum in the medium term,” she said.

 

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