As global demand for data centre capacity continues to grow, so does the demand across the African continent for local data centre capacity and the ecosystem of providers and technologies that enable the development, operation and utilisation of data centre facilities and associated services.
This is creating both opportunities and challenges for businesses, governments, investors, operators, suppliers and numerous other stakeholders in Africa’s data centre industry – including finance professionals.
‘Although currently dominated by South Africa, other key locations are emerging across the continent’
But behind this growing demand for data centre capacity is a complex web of global, pan-African and more localised drivers and trends. Urbanisation, economic and population growth, government initiatives, and the expansion of 3G, 4G and 5G networks mean that more people across Africa are connecting to the internet.
Catalytic trends in and around cloud software and services, edge computing, artificial intelligence (AI) and digitalisation are also transforming how people live and work in the continent and beyond.
Demand exceeds supply
Dr Ayotunde Coker, chairman of the Africa Data Centres Association (ADCA), sees the scope and magnitude of market potential on the continent expanding. ‘Demand for data centres has increased exponentially in recent years,’ he says, noting that it already exceeds supply.
The need to store and manage the billions of data points being generated daily by African businesses, governments and individuals is unlikely to diminish any time soon, and guesstimates vary on how much more capacity will be needed going forward, and where.
15 African countries have economies large enough to support data centre and cloud service ecosystems
Industry trends, such as building smaller ‘edge’ data centres, closer to data sources, could be a factor. So could developments in Africa’s data centre ecosystem. ‘Although currently dominated by South Africa, in terms of the scale and implementation of data centres and cloud platforms, other key locations are emerging,’ Coker says.
According to a 2024 ADCA report, these include Egypt, Kenya, Morocco and Nigeria, while another 15 African countries have economies large enough to support data centre and cloud service ecosystems.
Call for professionals
ACCA-qualified professionals are already working across this growing ecosystem. In South Africa, John Tinashe Makwasha is group financial controller at Africa Data Centres, part of the pan-African tech group Cassava Technologies; in Kenya, Daniel Kitwa is a director at GreenMax Capital Group, which invests and advises on clean energy projects, including data centres; in Nigeria, Oluseyi Olanrewaju is a CFO with Digital Realty, the world’s largest provider of cloud-neutral and carrier-neutral data centre colocation and interconnectivity services.
That description of what Digital Realty does hints at the technology and industry-specific knowledge that finance professionals inside and outside the data centre sector may need going forward. As the prevalence of digital services has grown, so has the enabling infrastructure, with data centres at the heart.
Level of understanding
If accountants are to support the wide range of stakeholders that will be making decisions relating to the operation and use of data centres and services, they will need to understand at least the basics of what is happening in this fast-changing sector.
On the outside, data centres may look like featureless boxes, but on the inside they are a hive of data, telecoms and internet-related activity. These functional and utilitarian facilities contain, for example, vast banks of computer server racks for storing and managing large amounts of data. Some also house single and/or multiple tenant organisations such as cloud service providers, content delivery networks, internet backbone carriers and fibre operators, along with systems for essentials such as back-up power, cooling and fire safety.
The sector can be an exciting place for finance professionals
As infrastructure is becoming more use-case specific, it is affecting location, hardware, design and other aspects of data centres. There are different tiers of data centre and different types: enterprise centres are dedicated to individual organisations; colocation centres rent out space for hardware; hyperscalers like Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform offer unparalleled scalability, global reach and an extensive array of services; and modular/container-based operations, some AI-ready and some not, allow companies to increase capacity quickly.
All this is increasing the potential for complexity across processes ranging from accounting through financial planning and analysis (FP&A) to annual financial reporting – and associated decision-making for operators and users, and accountants in business and practice.
Areas of expertise
Areas where accountants may need knowledge range from the existing International Financial Reporting Standard (IFRS) 16, on leases, to the emerging International Sustainability Disclosure Standards, IFRS S1 and S2, which African countries including Kenya and Nigeria have indicated they intend to adopt. Add a host of sector and service provider-specific metrics, such as data centre capacity, server utilisation rates, revenue per rack, cost per megawatt and kilowatt, and power usage effectiveness (PUE), and there’s a lot to take on board.
‘Combining financial knowledge with data centre expertise can position professionals for leadership roles’
This can make the sector an exciting place for finance professionals as it expands across Africa. ‘What I enjoy most is the opportunity to develop expertise in data centre operations, networking and technical areas,’ says Hester Chew FCCA, regional finance manager with data centre provider Princeton Digital Group.
After five years in the more established Asian data centre market, in a recent interview Chew told AB: ‘Combining financial knowledge with data centre expertise can position professionals for leadership roles that involve strategic planning and organisational thinking.’
Expansion (and constraints on this) in more established data centre markets are among the factors helping to drive up demand for data centre infrastructure and capacity across Africa – likewise its large and youthful population, increasing network penetration and growing access to broadband.
‘Such factors are attracting many international operators to the market and will be crucial for the future development of the industry,’ says Coker.
Issues to tackle
Many expansion projects are underway, but a number of issues must be overcome if more are to be enabled. These include the need to upskill technology professionals, attract greater foreign investment, liberalise markets where there is government control and monopoly over telecoms infrastructure, make municipal power supplies more reliable, and improve connectivity and interconnectivity within Africa and to other continents.
For now, though, as Coker says: ‘Today, the focus is on increasing broadband penetration to enable access from the coast – where subsea cables are anchored – to the heart of the African continent.’
