Nigeria’s data centre market to hit $288m by 2027

Nigeria’s data centre market is expected to hit a valuation of $288.8m by 2027.
According to a report by Research and Markets titled Nigeria Data Centre Market Outlook to 2027, Nigeria’s data centre market reached an estimated value of $131.6m in 2022, and by 2027, the market is expected to have experienced an approximate 220 per cent growth.

This substantial growth was attributed to the launch of 5G technologies and the increasing penetration of the Internet in Nigeria. is expected to hit a valuation of $288.8m by 2027.
According to a report by Research and Markets titled Nigeria Data Centre Market Outlook to 2027, Nigeria’s data centre market reached an estimated value of $131.6m in 2022, and by 2027, the market is expected to have experienced an approximate 220 per cent growth.

This substantial growth was attributed to the launch of 5G technologies and the increasing penetration of the Internet in Nigeria.

The Federal Government had set ambitious goals for the nation’s digital future with the National Digital Economy Policy and Strategy (NDEPS 2020-2030). Nigeria aims to transform into a fully digital economy by 2030, thereby driving the need for robust data centre infrastructure.

The report attributed the impressive growth of the Nigerian data centre market to the burgeoning fintech and startup ecosystem. It noted that while many Nigerian companies prefer to host their data offshore, the trend is changing quickly as companies are beginning to look back home.

“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 report reads in part.

The growth of data centres in Nigeria is expressed by the sheer amount of big digital infrastructure companies making their entries into the market. These include companies like Equinix and NTT Data.

The report also noted that the co-location trend will continue to grow and become a significant revenue driver in Nigeria’s data centre market, accounting for more than half of the market share. Co-location occurs when more than one data-heavy organisation decide to locate their data in the same location. The convenience, security, and reduced power interruptions make co-location an attractive choice for businesses.

The market, according to the report, is characterised by consolidation, with top players holding over 70 per cent of the market share. Competition among these players is based on various factors, including the number of data centres, IT load, gross floor area, total white space, number of racks, and geographical presence.

“As Nigeria continues to experience increased Internet penetration, higher investments, and government initiatives, the data centre market is poised for substantial expansion in the coming years. This growth reflects the country’s commitment to embracing digital transformation and the critical role data centres play in achieving that vision,” the report stated.