Data centers take root in Africa

IN THE NAMANVE industrial park on the edge of the Ugandan capital, Kampala, trucks rumble in the dust, loaded with steel. Sacks of coffee are piling up in the warehouses. And at the Raxio data center, which opened this year, a local corner of the internet is encased in rows of gleaming racks. Reach out and you can touch the cloud.

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Most of Africa’s data is currently stored elsewhere, passing through submarine cables that often land in the French city of Marseille. From the southern tip of the continent, it can take 180 milliseconds for a message to reach Europe and vice versa, long enough to frustrate people trying to trade stocks or play games. But a wave of investment in data centers is now bringing the Internet closer to users, laying the foundations for a digital revolution.

An upheaval is coming. Africa has more Internet users than America, but only as much data center space as Switzerland. Demand is skyrocketing as more and more people go online. Since 2016, capacity on the continent has doubled to around 250 megawatts (power consumption is a common measure of capacity), according to Xalam Analytics, which tracks the industry. The rate of growth is such that it will take another 1,200 megawatts by 2030.

The boom is partly driven by regulation. Two dozen African countries have passed data protection laws, or are considering doing so. They often require that certain data, such as personal information, be kept in the country. Another boost comes from competition, says Jan Hnizdo of Teraco, a leading data center in South Africa, where liberalization of the telecommunications industry has created space for these businesses to flourish.

Capital is pouring in. Teraco is building Africa’s largest autonomous data center in Johannesburg, with the support of foreign funds. Actis, a private equity firm, is investing $ 250 million in the industry, starting with a controlling stake in a Nigerian company, Rack Center. American investors founded Raxio with an eye on less fashionable markets, from Uganda to Mozambique.

These are just a few of the providers who offer “colocation” facilities, leasing space to a wide range of clients. They hope to attract banks and telephone companies, which otherwise have the headache of running their own centers. Gone are the days when a bank would simply put a server “in a corner room”, says Ayotunde Coker, who quit a job in finance to become the boss of Rack Center.

Data centers need power, and a lot. Keeping their equipment cool uses almost as much energy as running it, which is why centers are typically located in cold places like Scandinavia or the US Pacific Northwest. Most of Africa is hot and has a lot of blackouts. “Two or three percent downtime is an eternity,” says Guy Zibi of Xalam. To run the servers, many centers use polluting and expensive diesel generators.

Yet the potential gains from providing better connectivity and faster Internet services in Africa outweigh the difficulties. Microsoft and Amazon are bringing their cloud services to the region and have opened their own data centers in South Africa. Huawei helped build one for the government of Senegal. Google and Facebook are both involved in projects to lay new cables along the African coast. These investments are a sign that the world’s biggest companies are starting to take Africa seriously and a reminder that the digital economy, despite all its airline promises, will be based on fiber, steel and concrete.

This article appeared in the Middle East and Africa section of the print edition under the title “Sow the Cloud”


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