Nigeria’s Data Centre Boom: The Billion-dollar Race to Keep Africa’s Biggest Economy Online

A wave of billion-dollar investments is modelling Nigeria’s digital economy as global and local tech firms race to build high-capacity data centers that can process, store, and secure the country’s ever-growing data. Yet, even as these futuristic facilities rise across Lagos and Abuja, the question, “Can Nigeria’s unreliable power grid sustain its digital ambitions?” lingers.
These data centres oversee everything from fintech transactions to artificial intelligence models. They are the unseen engines driving Nigeria’s digital transformation, vital to banking, e-commerce, healthcare, and streaming. For millions of citizens, this means faster internet, safer online banking, and new opportunities in a data-driven economy.
“True economic growth will come from making this technology widely accessible across the country, Abideen Yusuf, General Manager at Microsoft Nigeria, said in an interview recently. “To build a robust AI economy, there is a two-pronged approach centered on cultivating a strong AI ecosystem and developing an AI-ready workforce,’’ he said.

Nigeria’s billion-dollar data rush
Over the past decade, Nigeria’s digital economy has experienced significant growth, driven by millions of connected young people and a thriving startup scene. The country’s data center market was valued at $278 million in 2024 and is projected to hit $671 million by 2030, according to Joseph Tegbe, Director-General of the Nigeria-China Strategic Partnership (NCSP). That expansion places Nigeria among Africa’s fastest-growing data markets.
The momentum is being driven by nearly US$1 billion in investments from both domestic and global players, including Digital Realty, Zenlayer, Cato Digital, Africa Data Centres, Open Access Data Centres, and MTN Nigeria. Together, they are building and expanding world-class facilities that will bring computing power closer to Nigerian users.

The map of Nigeria’s digital fortresses
Across the country, a growing constellation of data centers is reshaping how Nigeria stores, moves, and secures its information. From the nation’s commercial heartbeat, Lagos, to the political capital in Abuja, these facilities form the backbone of a new digital economy. Out of 11 active data centers, 10 are located in Lagos, while one operates in the Federal Capital Territory.
Lagos dominates the landscape, hosting nearly 70% of Nigeria’s existing and planned capacity, according to Connecting Africa. The city’s deep ports, undersea cable connections, and large population make it a natural choice for data center clustering. Its facilities are technological marvels crucial to Nigeria’s financial system, streaming services, and growing AI industry.
Global and local players have established sophisticated facilities that rival international standards in the state. Their data halls, powered by high-speed fibre connections and advanced cooling systems, process vast amounts of digital traffic every second, from mobile banking to cloud computing and artificial intelligence.
Abuja’s single data centre, operated by Digital Realty, marks the beginning of a strategic northward expansion. Industry observers say the spread of new builds into the capital and other emerging cities, such as Port Harcourt and Kano, will gradually balance Nigeria’s digital infrastructure footprint.
Together, these eleven centers symbolise Nigeria’s growing ability to manage its own data destiny. Analysts forecast that the Nigerian Data Centre Market, supported by eight major providers, will reach a total capacity of 116.72MW in 2024 and expand to 226.72MW by 2029.
This reflects the country’s position as the gateway to West Africa’s digital economy, strategically positioned between global undersea cable routes and a fast-growing population of connected citizens.
Beyond their sheer technical might, Nigeria’s data centers reflect a deeper shift. They are monuments to a nation taking charge of its digital sovereignty, ensuring that more of its data, intelligence, and innovation stay rooted in African soil.

The power predicament: Progress meets fragility
Despite the rapid expansion, Nigeria’s unreliable electricity remains the industry’s Achilles’ heel. The country has an installed generation capacity of 13,625MW, but only 5,200MW is typically available, according to the Nigeria National Grid. In other words, nearly two-thirds of potential power sits idle, hindered by gas shortages, grid collapses, and outdated infrastructure.
For operators, that means relying on diesel generators, batteries, and uninterrupted power systems to ensure uptime. The cost of keeping servers online can run into millions of dollars annually. In March 2025, the grid briefly reached a record 5,801 MW, Nigeria National Grid reported, but the milestone was short-lived.
This overreliance on diesel raises not only costs but also environmental concerns, forcing the industry to strike a balance between growth and sustainability.

Turning to greener power
Efforts to shift data centers toward renewable energy remain cautious. Operators acknowledge the promise of clean power but face serious challenges in adopting it at scale. One of the biggest concerns is reliability.
Renewable sources, such as solar energy, can be inconsistent, operating below capacity on cloudy or rainy days. For an industry that relies on uninterrupted uptime, even brief interruptions can be costly.
Space is another limitation. Renewable systems, particularly solar power, require extensive land areas to generate sufficient electricity. Real estate in key commercial hubs is expensive, making it challenging for operators to allocate large areas for energy production.
To overcome this, some developers are turning to power purchase agreements (PPAs) with renewable mini-grid companies. These agreements enable data centers to draw power from solar or hybrid grids constructed in more affordable areas, while maintaining their facilities in major business districts.
New projects, such as Husk Power’s solar expansion, which added 73MW of capacity in 2024, demonstrate how partnerships can boost Nigeria’s clean energy supply.
“The future of sustainable data infrastructure in Nigeria depends on creative energy solutions, partnerships, hybrid systems, and off-site renewables will play a critical role in bridging the power gap,” said Connecting Africa.
For now, however, most data centers still depend on natural gas to power their operations. Gas-fired plants are seen as a more stable and cost-effective alternative to diesel, offering lower emissions without sacrificing reliability.
However, as Nigeria’s renewable sector matures and solar capacity expands, experts believe that operators will increasingly integrate green energy into their power mix, marking a slow but inevitable shift toward a cleaner digital economy.
Government policy is also beginning to align. Under the National Digital Economy Policy and Strategy (NDEPS 2020–2030), Nigeria aims to localise data storage, promote the adoption of renewable energy, and build a resilient digital ecosystem that can withstand power shocks.

Policy, regulation, and digital sovereignty
Beyond technology, policy reform is reshaping the sector. The government’s data localisation laws require financial and telecom firms to host sensitive information within Nigeria, strengthening national sovereignty and cybersecurity.
But policy gaps remain. Industry players cite inconsistent tariffs, overlapping jurisdictions, and unclear service-level agreement standards.
Even so, the Nigerian Communications Commission (NCC) and National Information Technology Development Agency (NITDA) are moving toward clearer standards, pushing Nigeria closer to a unified digital governance framework.

Jobs, skills, and human transformation
As Nigeria’s data center industry expands, its human impact is becoming impossible to ignore. MainOne, now part of Equinix, has invested more than $40 million in its flagship Lagos data center, MDX-i, located in Yaba. The company plans further expansions in Sagamu and across West Africa, strengthening the region’s position as a technology hub.
These investments have created thousands of direct and indirect jobs while fueling the growth of internet service providers, e-commerce platforms, and the broader ICT ecosystem.
Similarly, MTN Nigeria recently unveiled the Dabengwa Data Centre in Ikeja, Lagos, a $150 million first-phase project built in partnership with Dell Technologies, with another $135 million set aside for expansion.
Described by CEO Karl Toriola as “a representation of technological advancement,” the centre is West Africa’s largest prefabricated modular data facility, featuring over 1,500 server racks, AI-powered cooling, and hybrid cloud capabilities designed for data sovereignty and cloud independence.
Beyond technology, the project created more than three hundred local jobs during construction and injected fresh revenue into Lagos through land and building approvals. Experts estimate that a 10% rise in broadband penetration, enabled by such infrastructure, could boost Nigeria’s GDP by up to 2.5%.
The center’s locally hosted cloud services are reducing latency, strengthening regulatory compliance, and empowering startups to scale, proof that Nigeria’s digital growth is as much about people and skills as it is about servers and steel.

Challenges and opportunities ahead
Despite optimism, major challenges persist. Currency volatility, high inflation, and import costs increase capital expenditure. Land acquisition in Lagos is complex, while environmental concerns, particularly water usage for cooling, are rising.
Nigeria also faces a skills shortage, with too few certified data engineers and technicians to meet surging demand. Without deeper investment in training, the country could face a capacity gap just as demand peaks.
Still, the opportunities far outweigh the risks. Analysts expect the country’s total operational and planned data centre capacity to surpass 300MW by 2030, five times its current levels. As major cloud providers like AWS, Google, and Microsoft Azure expand their edge facilities, Nigeria could become West Africa’s digital command center.