eby 1024x577 - MDAs, firms shun local data centres, spend scarce FX abroad

MDAs, firms shun local data centres, spend scarce FX abroad

• Investments surpass $230m as Lagos claims $1b FDIs
• Local capacity CAGR of 23.24% of global projected $517b
• Operators woo Amazon, Google, and Microsoft to platform
• MDAs, eCommerce, and banks still host content abroad
• Only 1% of global data centres in Africa

Notwithstanding the investments that have gone into Nigeria’s data center sub-sector, there are concerns that the capacity utilization of these facilities remains very poor when compared to other countries within the region, including South Africa, Kenya, and others.

Apart from the challenge posed by firms, government agencies, and banks, which still host their data abroad, operators in the data center sub-sector still face other notable issues including epileptic power supply, shortage of foreign exchange, multiple taxation, and others.

Today, there are over 11 data centers in Nigeria, located largely in Lagos, Abuja, and Kano, which have thus far seen over $230 million in investments with a market size projected to hit $415 million by 2028 and is to grow at a compound yearly growth rate (CAGR) of 10.34 percent. Local capacity is expected to grow by a CAGR of 23.24 percent of the global projected $517 billion by 2030. Lagos State claimed to have attracted $1 billion data center investment in 2021.
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