It is anticipated that by the year 2027, the market for data centres in Nigeria will reach a valuation of $288.8 million. According to a report by Research and Markets titled Nigeria Data Centre Market Outlook to 2027, this is what will happen in the future.
According to the analysis, the market for data centres in Nigeria had achieved an estimated value of $131.6 million in 2022. As a result, it is anticipated that the industry will have experienced growth of roughly 220 per cent by the year 2027.
This means that the market for data centres in Nigeria is on its way to experiencing a tremendous increase in the near future. In point of fact, large data businesses have been actively expanding their operations within the country in preparation for the influx.
According to the report, this significant expansion may be ascribed to a number of different factors. One of these factors is the debut of 5G technology in the country, which, combined with the constant appearance of new technologies, is anticipated to enhance data consumption as well as digital output and productivity. This, in turn, will result in an increase in the need for data centres.
5G, in contrast to the more common 3G and 4G, offers faster network speeds, fewer interruptions, and more advantages. The nation has reached a significant milestone by reaching 500,000 5G subscriptions in a little over a year following the broad rollout of the technology. MTN, Airtel, and MAFAB are the only telecommunications companies in Nigeria that have been able to successfully introduce 5G services.
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The growing number of people who have access to the internet in Nigeria is another reason that is contributing to the rise in demand for data centres in that country. The percentage of people in the country who had access to broadband internet was 47.3% as of December 2022, and the overall number of people who had internet subscriptions was 154.8 million as of April 2023. As digital infrastructure becomes more readily available, it is anticipated that this figure will continue to rise.
In addition, the National Digital Economy Policy and Strategy (NDEPS 2020-2030) has made certain that the West African nation has established ambitious objectives for the digital future it wishes to have. Because of this policy, the nation plans to make the transition to a fully digital economy by the year 2030, which will necessitate the construction of powerful data centre infrastructure.
In conclusion, the analysis suggested that the expanding fintech and general startup environment in Nigeria was to blame for the remarkable expansion of the country’s data centre sector. It was pointed out that despite the fact that many Nigerian businesses opt to host their data outside of the country, this practice is rapidly becoming less popular as more businesses continue to focus their attention on Nigeria.
Details on Nigeria’s growing Data Center Market
The sheer number of large digital infrastructure businesses that have recently entered the Nigerian market is one indicator of the rapid expansion of data centres in that country. Companies such as Equinix and NTT Data are included in this category.
Recently, the worldwide digital infrastructure business Vertiv expanded its footprint within the country by opening a new office and a larger showroom in Lagos. These new locations are part of the company’s expansion within the country. This pattern demonstrates that significant occurrences have already begun to take place. The sheer number of young people who are more likely to make heavy use of technology and data is reason enough to fuel both demand and growth.
The colocation trend would continue to rise and become a significant revenue driver in Nigeria’s data centre market, according to the report, which also claimed that this trend would account for more than half of the market share overall when multiple data-heavy organisations make the decision to store their information in the same physical place, a phenomenon known as colocation arises. Colocation is a choice that is appealing to companies because of the benefits it offers in terms of convenience, safety, and fewer power outages.
In addition to this, the report highlighted the fact that the market is currently undergoing consolidation, with the top competitors controlling more than 70% of the market share. The level of competition between these players is determined by a variety of parameters, such as the number of data centres, the amount of information technology (IT) load, the gross floor area, the total white space, the number of racks, and their geographic presence.
Data companies such as the Africa Data Centre, Galaxy Backbone, and CloudExchange are among the largest data-centric businesses in Nigeria. Other large data-centric businesses in Nigeria include telecommunications companies such as MTN, Airtel, 9Mobile, and Glo; financial institutions such as Access, Standard Chartered, and UBA; fintech companies such as Opay, Flutterwave, and Piggyvest; and online retailers such as Jumia, Konga, and Payporte, among others.