Africa’s digital economy is entering a new phase in which the main infrastructure constraint is no longer internet connectivity but access to computing capacity, according to the International Finance Corporation, as demand for cloud services and artificial intelligence accelerates across the continent.
Speaking during an Africa Hyperscalers Conversation: A Global View session, Obinna Isiadinso, IFC Global Sector Lead for Data Centres and Cloud Investments, said Africa must now focus on scaling compute infrastructure, including data centres and cloud platforms, to support digital transformation, enterprise workloads and emerging AI applications.
Across a continent of nearly 1.4 billion people, Africa currently has about 500 megawatts of installed data centre capacity, accounting for less than one per cent of the global supply, even as demand for local processing continues to rise.
“Digital infrastructure is no longer discretionary,” Isiadinso said during the session. “It has become fundamental to economic competitiveness.”
The shift reflects broader global trends, where hyperscale cloud providers are investing tens of billions of dollars annually in new facilities to meet the growing computational requirements of artificial intelligence systems. The challenge for African markets, he noted, is positioning themselves to attract a share of those investments.
For much of the past decade, Africa’s infrastructure gap was largely defined by limited connectivity. Expanded subsea cable deployments and terrestrial fibre networks have improved internet access across many regions, but energy availability has now emerged as the primary bottleneck.
“Reliable electricity is the single most important constraint affecting data centre expansion in many emerging markets,” Isiadinso said, adding that predictable power supply is essential for hyperscale infrastructure deployment.
The energy challenge is not unique to Africa, as mature digital hubs in Europe and North America are also facing grid pressures driven by rising AI-related power demand. However, the implications are especially significant for African markets seeking to attract cloud regions and large colocation campuses.
To address this, infrastructure developers are increasingly exploring hybrid energy models, including gas-to-power systems, renewable energy integration and private power purchase agreements to ensure a stable electricity supply.
Beyond energy, financing large-scale data centre projects depends heavily on securing long-term customers, often referred to as ‘anchor tenants’. Contracts with hyperscale cloud providers, telecom operators or government institutions help provide predictable revenue streams that make projects bankable.
“Anchor tenants provide predictable revenue streams that reduce investment risk,” Isiadinso said. “Where those conditions are present, projects become significantly easier to finance.”
Government digitisation initiatives could therefore play a critical role in accelerating infrastructure deployment, particularly when public services migrate to cloud platforms or require local data hosting.
While Africa may not immediately compete with energy-rich regions hosting massive AI training clusters, the IFC sees significant opportunity in distributed AI inference infrastructure—systems designed to run AI applications closer to end users.
Inference workloads support applications such as language processing, financial automation, recommendation systems and real-time analytics, all of which are expanding rapidly across African markets as digital adoption grows.
According to Isiadinso, training facilities typically require extremely large compute clusters and high-power density, making them more suited to regions with abundant energy resources. Inference infrastructure, by contrast, is more distributed and aligns with Africa’s growing need for localised computing capacity.
“As digital services expand across the continent, demand for localised inference capacity will increase,” he said, noting that this creates opportunities for regional data centre operators and infrastructure investors.
The session also highlighted the limited participation of domestic institutional capital in Africa’s digital infrastructure sector. Pension funds across the continent are expanding but remain underallocated to infrastructure assets, particularly digital infrastructure.
“With appropriate regulatory frameworks and risk mitigation mechanisms, these funds could become important sources of long-term capital,” Isiadinso said, adding that improving investor awareness of digital infrastructure as an asset class would be key to unlocking local financing.
Globally, hyperscale investment increasingly flows to markets offering policy clarity across energy, connectivity and digital regulation. Countries that can provide reliable power, regulatory certainty and investment stability are more likely to attract the next wave of infrastructure deployment, he added.
Africa’s digital foundation is improving, supported by expanding subsea connectivity, growing enterprise adoption and rising investor interest. However, Isiadinso stressed that coordinated action across energy, policy and finance will determine whether the continent captures more value from the global digital economy.
“Infrastructure determines where digital value is created,” he said. “Ensuring that a greater share of that value is created within Africa will depend on the investments made today.”
