Africa’s data centre industry is on a path of cautious expansion, with most operators expecting continued growth over the next 12 months, though concerns remain about infrastructure, skills shortages, and uneven regulatory environments, according to the Africa Data Centres Association’s INSIDER Survey 2025.
The report, based on in-person interviews with senior executives across the continent, reveals that 93.6% of respondents anticipate either strong or moderate growth in the coming year, with an average expected market growth of 17.5%.
Despite this optimism, the pace is described as measured rather than accelerated, shaped by structural and operational constraints.
Among the key barriers to scaling data centre infrastructure are a shortage of skilled professionals, a lack of reliable power supply, and regulatory uncertainty. These challenges vary by country, with Nigeria and South Africa facing more acute talent and energy constraints than Kenya, Côte d’Ivoire, or Senegal.
Respondents identified the talent gap as the most pressing issue, with 39% citing difficulty retaining skilled workers due to better international opportunities.
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Power reliability was the second most critical concern, particularly in markets like Nigeria, where it is seen as a major cost driver. Regulatory unpredictability was also cited, especially in markets where licensing and compliance processes remain opaque or slow.
Still, demand-side fundamentals remain strong. The main drivers of growth are increasing internet penetration and data consumption, followed closely by the rapid rise in cloud service demand. These were ranked as more influential than emerging technologies like AI, edge computing, or supportive regulation, which respondents viewed as secondary growth enablers.
Capital Still Flowing In
Investment sentiment remains strong despite the challenges. More than 77% of respondents said they are “very likely” or “likely” to make significant capital investments in the next 12 months. Private capital was identified as the most attractive source of financing, preferred by 52.4% of respondents, followed by development finance institutions (DFIs) at 26.2%. Bank loans, bonds, and IPOs attracted relatively little interest, indicating a continued reliance on equity and strategic funding.
Profitability across the sector received a modest average rating of 3.3 out of 5, highlighting the high upfront costs and long return timelines typical of infrastructure-heavy industries in emerging markets.
AI Adoption Rising, But Sustainability Lags
Though still at an early stage, AI-ready infrastructure is beginning to take hold. 36% of operators have already integrated AI-capable systems, such as high-performance computing racks and advanced cooling technologies. Another 35% plan to adopt such systems within the next 6 to 12 months.
Sustainability performance, however, remains relatively underdeveloped. The industry gave itself an average environmental, social, and governance (ESG) rating of 5.87 out of 10, with energy efficiency named as the top priority. Renewable integration, circular design, and water-saving technologies registered limited traction, suggesting a narrow focus on cost-driven sustainability measures.
Expansion and Skills at the Forefront
Strategically, 57.5% of respondents cited geographic expansion, either across borders or through mergers and acquisitions, as the most effective path to revenue growth over the next three years. Investment in technology and innovation, while important, was seen as a lower priority compared to execution-focused expansion.
To address workforce constraints, 61.3% of companies reported investing in in-house training and certification. Only a minority are pursuing partnerships with educational institutions, reflecting an industry preference for direct control over skills development.
Regional Integration Still Distant
Despite broad support for the African Continental Free Trade Area (AfCFTA), the policy is viewed as having limited current impact on the data centre sector. 61.3% of respondents said AfCFTA has had no tangible effect on their operations so far. Those who did foresee potential benefits pointed to regulatory harmonisation, increased investment, and cross-border data flows, but only if the agreement leads to actionable reforms.
The survey findings portray a sector balancing strong demand and long-term opportunity with short-term operational constraints. While Africa’s data centre market is clearly expanding, that growth will depend on targeted investment, regulatory clarity, and skills development to achieve its full potential.
