Accelerating Africa’s digital economy drive

The Emerging Africa Infrastructure Fund, in collaboration with Proparka, has announced a commitment of $33 million to the Raxio Group. This financial support aims to facilitate the construction and management of data centers in seven African countries, playing a pivotal role in boosting the digital economy infrastructure across the continent. Sumit Kanodia, the Investment Director at Ninety-One and the fund manager of the Emerging Africa Infrastructure Fund, shared insights on this significant initiative. With an overarching goal to address the prevailing funding gap and unleash the potential of Africa's growing data market, the $33 million debt facility is part of a larger $110 million collection, with an initial tranche of $73 million. The focus is on establishing state-of-the-art data centers in underserved markets, marking a promising beginning in the much-needed expansion of digital infrastructure. Kanodia emphasized the substantial infrastructure deficit in various sectors on the continent, indicating that while the allocation is a step in the right direction, formidable challenges remain. Estimates suggest a requirement of nearly 1,000 megawatts of power over the next 15 years, with the current contribution of approximately 11 megawatts underscoring the colossal scope of the task at hand. The selection of countries for the data center expansion project was strategic, as Kanodia clarified that the initiative targets regions with limited existing capacity, aiming to foster growth and innovation. While Nigeria notably missed inclusion in the current phase, the primary focus is on markets such as Cote d'Ivoire, the DRC, Uganda, and Ethiopia where the potential for development is significant. In addition to enhancing digital connectivity, the endeavor is poised to create employment opportunities, with around 1,200 jobs expected during the construction phase alone. The ripple effect of these data centers extends beyond direct employment, stimulating a tech-centric ecosystem that fuels advancements in fintech, digital entrepreneurship, mobile services, and more. Amidst projections forecasting a surge in Africa's digital economy, reaching $180 billion by 2025 and accounting for 57% of the total GDP, Kanodia remains optimistic about the continent's potential. Despite lingering skepticism regarding the feasibility of such ambitious growth targets, he expressed confidence in Africa's emerging markets. The continent's high proportion of rapidly expanding economies instills assurance that once ignited, the digital landscape is primed for a transformative ascent. Reflecting on the regulatory landscape and support systems vital for nurturing technological ecosystems, Kanodia highlighted the pivotal role that governments play in implementing conducive policies. As data sovereignty gains traction and the demand for reliable and efficient data services intensifies, the significance of robust data center infrastructures becomes increasingly apparent. Looking ahead to the future of these data centers, Kanodia outlined a pivotal trajectory for the facilities. With operations already underway in Uganda and advancements in Ethiopia nearing completion, the focus shifts towards ensuring seamless functionality and optimum service delivery for clients. The projected years of 2024 and 2025 are earmarked as critical junctures for witnessing the full potential of these data centers, as they emerge as hubs for innovation and technological progress. As Africa strides towards a digital era brimming with promise and potential, the alignment of strategic investments with regulatory frameworks and market demands will be instrumental in propelling the continent into a new realm of digital transformation and economic growth.