Nigeria’s data center market among fastest growing in Africa

Nigeria data center market will grow at a Compound annual growth rate, CAGR, of 17% during 2021-2026 according to a report by Research and Markets.

The data center market in Nigeria is among the fastest-growing markets in Africa.

The Nigeria data center market investments are majorly driven by factors such as digitalization, advanced technologies, the presence of major operators, internet penetration, and government initiatives. The COVID-19 pandemic has been a strong market enabler for several digitization initiatives across Nigeria.

Lagos is the primary data center hub in Nigeria, housing most of Nigeria’s total number of data centers. The shift of industry sectors such as BFSI, education, retail, manufacturing, and others towards new technologies such as cloud and big data will aid the market’s growth during the forecast period.

The rapid growth and development of data center projects will allow new players to enter the Nigerian market. Schneider Electric is one of the major vendors among support infrastructure providers in the Nigerian data center market.

The power instability across the country leads to the installation of power backup equipment such as generators among the facility operators, with diesel generators leading the market. IT infrastructure providers such as NetApp, Lenovo, IBM, and HPE have a strong presence in the Nigerian data center market.

The growing demand for smart devices, the increasing demand for analytics, cloud adoption, and wireless networking technologies have led several organizations in Nigeria to invest in big data and IoT technology.

Despite the slowdown in the economy, IT infrastructure providers and data centers have seen an increase in demand due to the shift to remote working in the country.

Most facilities in the country are adopting low to medium voltage switchgear as the number of data center investments increases.

In 2020, the Nigerian government announced the plan to establish the Centre for Artificial Intelligence and Robotics in Nigeria (CFAIR) to facilitate emerging technologies such as ICT security and networking.

Growing investments in start-ups such as FinTech and e-commerce using big data analytics and IoT applications are expected to increase the demand for all-flash storage in the Nigerian data center market.

The implementation of 5G networks will increase the usage of new-class ethernet switches among facilities in the country.

The adoption of water and air-based chillers in the facilities will gain traction as the region experiences a moderate climate.

Greenfield data center projects are witnessing increased investment from local and global service providers as they aim to expand their presence in the country.

Over 90% of Nigeria’s data is still hosted abroad. Many government Ministries, Departments, and Agencies (MDAs) in Nigeria host their data outside the country. Improved digital infrastructure and connectivity will increase the demand in the country, leading to further growth of data centers.

Nigeria has the presence of renowned contractors such as Arup, that was involved in designing the data center facility for Rack Centre in Lagos.

The penetration of AI and ML to monitor the facilities is likely to increase in the market and improve the efficiency of the facility operations.

21st Century Technology (21CTL) along with Konet has announced an edge hyperscale data center project in Nigeria, to be operational in 2022. The company is also building data centers in Apapa and Ikoyi, as well as edge data centers in Victoria Island, Maryland, and Ikeja.

The market size of Tier IV facilities is expected to reach more than USD 15 million by 2026, growing at a CAGR of 24.42%.

Due to the increased risk of physical security attacks in the country, facilities in Nigeria are deploying additional security measures such as multi-factor authentication and anti-climb perimeter fences.

Modular data centers are also extensively deployed in the country as a low-cost option to traditional data center deployment. Huawei Technologies is one of the significant vendors supplying modular facilities in the region.