According to a recent report by Research and Markets (the world’s largest market research store), Nigeria’s data centre market is expected to hit a valuation of $288.8 million by 2027. The report titled: Nigeria Data Centre Market Outlook (2023-2027) noted that Nigeria’s data centre market reached an estimated value of $131.6 million in 2022, and it is expected to grow by approximately 220% by 2027.
This could see major data companies move into the country in anticipation of the surge. According to the report, this potential growth can be attributed to the launch of fintechs, internet penetration and the presence of 5G in the country.
With the continuous emergence of new technologies, an increase in data consumption as well as digital output and productivity is much expected. Ultimately, this will in turn expand the demand for data centres.
Nigeria has recorded 500,000 5G subscriptions in less than 18 months after its general rollout. This is no surprise as 5G provides faster internet speed and fewer lags. As of today, MTN, Airtel, and MAFAB are the only telcos that have successfully launched 5G offerings in the nation.
The increasing penetration of the internet in Nigeria is another factor responsible for the growth in demand for data centres. In December 2022, the country’s broadband penetration stood at 47.3% while the total number of internet subscribers was 154.8 million in April 2023. This number is projected to grow as digital infrastructure becomes more accessible.
National Digital Economy Policy and Strategy (NDEPS 2020-2030) has ensured that the West African country has set lofty goals for its digital future. With that policy, the country aims to transform into a fully digital economy by 2030, driving the need for robust data centre infrastructure.
Finally, the report attributed the impressive growth of the Nigerian data centre market to the thriving fintech and overall tech startup ecosystem.
According to the report: “The thriving fintech and startup ecosystem in Nigeria is also contributing to the demand for dynamic data centres. Previously, many companies hosted their data offshore due to concerns about reliability and scalability. However, as international data centre operators turn their attention to Nigeria, the sector has become more resilient and reliant on local hosting,”
The growth of data centres in Nigeria is reflected by the sheer amount of big digital infrastructure companies like Equinix and NTT Data making new entries into the country.
The biggest existing data-centric companies in Nigeria include data companies the Africa Data Centre, Galaxy Backbone and CloudExchange; telcos like MTN, Airtel, 9Mobile and Glo; banks like Access, Standard Chartered and UBA; fintechs like Opay, Flutterwave and Piggyvest; and eCommerce like Jumia, Konga and Payporte etc.