Blog: Investors Prepare the Ground for Data Center Growth in East Africa

Investors Prepare the Ground for Data Center Growth in East Africa


Interxion’s move into the region suggests its meagre digital infrastructure may at last be seeing a start of meaningful investment.

By Mark Ballard


European data center giant Interxion’s move into East Africa suggests the region’s meagre internet infrastructure may at last be starting on a path toward catching up with the developed world.

Investment in data centers and connectivity infrastructure south of the region has picked up dramatically in recent years, but the growth has been concentrated mostly in South Africa. Google is building a private submarine cable from Lisbon to Cape Town; Berkshire Partners just bought a majority stake in Teraco, reportedly South Africa’s largest data center provider; Microsoft Azure launched its first cloud data centers on the continent last year, in Johannesburg and Cape Town; and Amazon Web Services is gearing up to do the same this year by launching cloud data centers in Cape Town.

The situation in East Africa is starkly different. It is one of the most poorly connected regions on the planet, according to a DCK analysis of World Bank data. With its deformed telecoms market, obstructive legal and trade systems, underdeveloped power infrastructure, a small digital workforce, and little money, eager investors are counting on governments to take the steps necessary to make data center and network building possible.

Last week’s UK-Africa Investment Summit in London demonstrated that momentum is gathering. African leaders joined UK Prime Minister Boris Johnson in a declaration of commitment to develop infrastructure, on the premise that it is necessary for economic growth. Politicians and academics have invested great hope in the idea that a digital economy will lift African people out of poverty, and that internet connectivity will help people overcome crises like the one that in recent days hit drought-hardened farmers in East Africa, where a swarm of locusts threatened to become a plague, making people fearful of famine, displacement, and the conflict those things could bring.

Momentum in Kenya

The biggest obstacle to those trying to build digital infrastructure in the region has been a lack of investment, Ranjith Cherickel, chief executive of Icolo, Kenya’s largest data center operator, said as Interxion prepared to announce its takeover of his firm in December. Icolo, by Cherickel’s account, pulled itself up by its own bootstraps, with injections of cash, equipment, and skills from Interxion, which has been making them since the Kenyan operator was founded in 2015. (Interxion itself is in the process of being acquired by the US data center giant Digital Realty Trust.)

In that time Kenya went from being one of the least connected places in the world to one of the most connected (at least) in Africa and within reaching distance of the average middle-income country. Yet the gap between where Kenya has reached and the most connected countries is still far greater than the one that has widened between it and the least connected countries in the world, most of which are in central Africa.

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