They say data is the new oil, but in Africa, we’re still shipping it out in barrels. Even though the continent has 211 data centres today, 46% of them are clustered in just four countries: South Africa, Kenya, Nigeria, and Egypt.
But then, even with that growth, Africa as a whole holds less than 1% of global data-centre capacity.
It’s a little absurd and extremely strategic. Because when we look closer at the data-centre boom, we are left wondering who owns and controls Africa’s data.
The Global Drive for Digital Sovereignty
To understand what’s happening here, you need to see what’s happening globally. Across the world, countries are waking up to the idea that data is not just a commodity but an infrastructure. Think Europe’s Gaia-X initiative, India’s data localisation laws, or Gulf states building sovereign AI hubs.
Why? Because data stored domestically means more control over privacy, over regulation, and over who profits. There’s also the geopolitical angle, where data centres are becoming as strategically important as ports, roads or energy grids.
In Africa, this aligns neatly with governments’ vision to assert control, retain value, and build digital resilience.
Why African Governments Are Focusing on Local Cloud
There are four key motives:
- Economic Retention
If data stays in-country, so do a lot of the dollars that would otherwise pay foreign providers. Governments see data centres as a way to repatriate value, spur job creation, and strengthen their digital economies. - Security
Local hosting mitigates dependence on foreign infrastructure, reducing exposure to geopolitical risk and foreign surveillance. For some governments, this is not just desirable but vital for national security. - Compliance Pressure
With African nations enhancing regulation of fintech, health, identity, and public records systems, having data remain within national borders gives regulators oversight. Data localisation policies are being mooted or enforced in several countries to ensure “sensitive data” stays local. - Leverage Against Hyperscalers
Domestic cloud infrastructure strengthens the hand of regulators and governments in negotiating with global tech giants. Rather than being entirely dependent on foreign cloud providers, African nations can demand better terms, or even build their own sovereign clouds.
The Reality on the Ground: Africa’s Cloud Infrastructure
- Out of 211 active data centres in Africa, South Africa is leading with 49. Kenya has 18; Nigeria 16; Egypt 14.
- According to a recent report, Africa’s data-centre market is projected to nearly double to $6.81 billion by 2030.
- These facilities aren’t just for storage: newer builds are being designed for AI workloads, using advanced cooling systems like liquid cooling.
- Power is a real issue. But some players are already building renewable-powered data centres. For instance, Teraco (a Digital Realty company) is working on a 120 MW solar PV facility to support its South African data centres.
- There are still infrastructure risks, during the submarine cable cuts off West Africa in March 2024, local data centres like Open Access Data Centres (OADC) Lagos helped sustain connectivity and critical services.
Protection vs Progress: The Two Sides of Sovereignty
At its core, the controversy boils down to two competing visions:
Protection
- Local cloud gives governments custody: less reliance on foreign data centres, fewer risks of foreign interference.
- It’s an insurance policy against geopolitical shocks or cyber-espionage.
- In storing and processing data locally, states can better regulate crucial systems (payments, identity, health).
Progress
- Local cloud can boost innovation: by investing in infrastructure, governments can bring about new layers of the digital economy; AI, fintech, civic tech.
- Domestic cloud providers build a local value chain: engineers, operators, data engineers, system integrators.
- It lowers latency for businesses, enabling real-time services that matter to African markets.
- For SMEs, sovereignty doesn’t just mean control, it means opportunity: to build faster, cheaper, and more native digital products.
But there is a risk: if regulation gets too protectionist, it could limit competition. Cloud costs might go up, innovation might slow, and smaller players could be shut out if the entry barrier is too high.
What Sovereign Cloud Means for African SMEs
Here’s where it gets real for the small and medium businesses, the engine of most African economies.
- Costs
Local hosting may raise or lower costs, depending on how infrastructure and competition evolve. SMEs could face higher bills if global providers are forced to build more local capacity. But the upside is predictable pricing, stable peering, and potentially lower latency costs. - Performance
If data is hosted nearer to users, services improve. Faster response times, better uptime, and lower latency make a huge difference, especially for real-time applications in fintech or logistics. - Compliance
New data localisation laws may require businesses to store certain customer data locally, or to follow stricter security protocols. SMEs will need to understand and plan for these, or risk hefty penalties. - Differential Advantage
SMEs that adopt local cloud early could gain a competitive edge. They can build cloud-native apps optimised for African markets, leverage local data for AI, and use sovereign infrastructure to appeal to customers who prioritise data protection and residency.
Risks & Challenges to Watch
It’s not all sunshine:
- High Barriers to Entry: The cost of building and running data centres is large, meaning only well-funded companies or governments may lead.
- Fragmentation: If each country builds its own cloud regime, we risk a patchwork of regulations that fragment rather than unify the African digital market.
- Dominance Risk: Without enough competition, a few big domestic players could dominate, reducing innovation.
- Talent Shortage: Skilled cloud and data-centre engineers are limited; infrastructure may grow faster than the workforce.
- Power Constraints: Reliable electricity is a major issue in many regions; sustainable, green energy solutions are not yet widespread.
The Opportunity: Sovereign, Smart, and Scalable
If done right, sovereign cloud is a strategic lever for Africa’s digital growth.
- We can build regional cloud federations, where countries pool data-centre resources, enabling scale without duplication.
- Public–private partnerships can boost growth: governments providing land or incentives, private firms building capacity, SMEs using it.
- African cloud providers can compete internationally, carving out a niche in AI and edge computing.
- Importantly, SMEs that embrace this infrastructure early could build next-generation services grounded in African data, with local trust, compliance, and speed.
Macro Outlook (2025–2030)
Over the next five years, this is what I expect:
- Cloud adoption in Africa will surge, driven by SMEs, governments, fintechs, and AI startups.
- Data-centre investments will intensify, especially in under-served regions, not just in South Africa or Kenya, but also in West and East Africa.
- Sovereign clouds will emerge not just in national capitals, but at the regional level, backed by both private and development-finance capital (e.g., IFC backing in Raxio).
- Companies that lean into local cloud now will be well-placed to lead in AI, digital public infrastructure, and next-gen fintech.
At the end of the day, local cloud isn’t just about where data rests but who builds Africa’s digital sector sustainably, who controls its value, and who benefits from its growth.
Sovereignty is not inherently protectionist, it’s a foundation for progress. But unless we strike the right balance between regulation, competition, investment, and innovation, it could become an obstacle instead.
So I ask: should African countries double down on sovereign infrastructure in the name of control, or lean into hybrid models that prioritise speed, cost, and global competitiveness?
Because how we decide today will affect Africa’s digital economy of tomorrow.
