Investment Surges in Nigeria's Data Center Sector, Capacity Expected to Quadruple
Nigeria's Data Center Capacity Set for Fourfold Growth
Nigeria's data center market is poised for a significant expansion, with current projections indicating a quadrupling of capacity in the coming years. As of December 2024, the nation's third-party data centers held an approximate core and shell power capacity of 65.8 MW. This figure is set to dramatically increase, with an additional 327.8 MW currently under construction or in the planning stages. Upon the operationalization of these facilities within the next four to five years, the total power capacity is expected to rise fivefold.
The market's financial trajectory is equally robust. Valued at USD 278 million in 2024, the Nigeria Data Center Market is projected to reach USD 671 million by 2030, reflecting a Compound Annual Growth Rate (CAGR) of 15.82%. Total investments in this sector are estimated to exceed USD 2.94 billion between 2025 and 2030, underscoring the strong confidence from both global and regional investors.
Major Global and Regional Players Drive Investment Surge
The surge in Nigeria's data center capacity is largely attributed to substantial investments and strategic maneuvers by major international and local operators. Global colocation providers are actively entering the market through partnerships and acquisitions. For instance, Equinix (NASDAQ: EQIX) established its presence in 2022 by acquiring data center facilities from MainOne. Similarly, Digital Realty (NYSE: DLR) expanded its footprint by acquiring Medallion Data Centres.
Digital Realty recently launched its third data center, LKK2, in Lekki, Lagos. This new facility adds 2 megawatts of IT capacity across 13,000 square feet, strategically leveraging the 2Africa subsea cable to enhance West Africa's digital infrastructure.
> "LKK2 is a milestone in supporting Africa's digital transformation. Our investment in Nigeria enables global interconnectivity and provides future-ready infrastructure for enterprises," stated Ikechukwu Nnamani, managing director of Digital Realty in Nigeria.
Regional players are also making significant contributions. Open Access Data Centres (OADC), a subsidiary of WIOCC Group, has committed $240 million for a 24-megawatt hyperscale data center in Lekki, Lagos, slated for completion by 2027. This project, backed by international finance partners like the IFC and Proparco, will serve as a landing station for Google's Equiano subsea cable.
> Dr. Ayotunde Coker, CEO of OADC, highlighted the scale of the investment, stating, "One megawatt capacity of a data centre costs about $10 million. We are building 24 megawatts, which is about $240 million—a huge investment."
Rack Centre is concurrently undertaking an expansion to add 12 MW of IT load to its existing 1.5 MW capacity, positioning it to become the largest data center in sub-Saharan Africa.
Lagos Emerges as Central Digital Infrastructure Hub
Lagos, Nigeria's economic nucleus, is emerging as the undisputed central hub for this digital infrastructure boom, projected to host over 85% of the total planned power capacity. The city's strategic importance is further amplified by its proactive efforts to address critical infrastructure challenges, particularly in power supply.
Lagos State is actively seeking investors to develop gas-fired power plants with the ambitious goal of adding 4,000 MW to its grid. This initiative is crucial given that Lagos, home to over 20 million people, currently receives only 2,000 MW from the national grid against a required 6,000 MW. Recent regulatory changes under President Bola Tinubu's administration now empower Lagos State to independently generate and distribute electricity, fostering localized solutions and investment opportunities.
Broader Economic and Digital Transformation Implications
The substantial investments in Nigeria's data center market are not merely an infrastructure upgrade; they are a catalyst for broader economic growth, job creation, and technological innovation. Improved digital infrastructure is directly linked to enhanced broadband penetration, which, according to the Nigerian Communications Commission (NCC), a 10% increase can add up to 2.5% to Nigeria's GDP.
Nigeria already boasts Africa's largest mobile market, with over 172.9 million active mobile subscribers and a teledensity of 79.78% as of April 2025. Broadband internet penetration stands at 48.15%, encompassing approximately 104 million internet users. This digital demand is fueling a rapidly expanding cloud computing market, projected to grow from $1.03 billion in 2025 to $3.28 billion by 2030, at a remarkable CAGR of 25.98%.
Beyond economic metrics, these investments contribute to digital sovereignty, as local data hosting reduces reliance on foreign infrastructure and ensures compliance with local regulations. It also fosters an environment ripe for innovation, empowering startups and enterprises through affordable, high-performance cloud services.
However, the path to sustained growth is not without challenges. Nigeria's economy has faced headwinds, including a significant currency devaluation of the Naira, which lost over 40% of its value against the U.S. dollar in 2024, contributing to inflation rates exceeding 30%. Persistent issues such as corruption, regulatory uncertainty, policy inconsistency, poor infrastructure, and foreign exchange shortages continue to pose obstacles for investors and businesses.
Expert Insights Underscore Market Potential
Industry leaders and government officials consistently highlight the transformative potential of these data center investments.
> Ikechukwu Nnamani of Digital Realty reiterated the strategic importance: "LKK2 is a milestone in supporting Africa's digital transformation. Our investment in Nigeria enables global interconnectivity and provides future-ready infrastructure for enterprises."
> Dr. Ayotunde Coker of OADC emphasized the significant financial commitment: "One megawatt capacity of a data centre costs about $10 million. We are building 24 megawatts, which is about $240 million—a huge investment."
> Dr. Aminu Maida, CEO of the Nigerian Communications Commission (NCC), underlined the broader economic impact: "Our numbers tell a compelling story of the nation's digital trajectory... A 10per cent increase in broadband penetration, enabled by robust data centre infrastructure, can add up to 2.5per cent to Nigeria's GDP."
These statements collectively affirm the market's compelling narrative driven by robust demand and strategic investments.
Outlook: Continued Growth Amidst Infrastructure Development
The outlook for Nigeria's data center market remains positive, contingent on sustained investment and ongoing infrastructure development. The continued influx of capital from global and regional operators, coupled with the strategic focus on enhancing core infrastructure like power supply, is expected to maintain the sector's upward trajectory. Key factors to monitor include the progress of Lagos's independent power generation projects and the implementation of proposed regulatory reforms, such as the new Investment and Securities Act (2025) and tax overhauls. These developments will be crucial in mitigating existing challenges and unlocking the full potential of Nigeria as a digital powerhouse in Africa. Investors will closely observe the effectiveness of these reforms in creating a more stable and predictable business environment, which will further attract foreign direct investment and solidify the nation's position in the global digital economy.
Edgen Stock·Oct 14 2025, 12:52
