Africa’s internet economy is catching the attention of investors both within the continent and beyond. Growing demand for high-speed, always-on computing is driving an investment boom into Africa’s internet sector. Cloud computing is shaping the digital economy and sparking investment in the necessary infrastructure.
Fibre internet is a catalyst for innovation. Virtual workspaces enable telecommuting, seamlessly connecting remote teams. African industries are being propelled into the Fourth Industrial Revolution (4IR) with advanced robots and machine learning technologies. Investment in Africa’s internet sector supports economic activity and as the digital economy grows we witness a virtuous circle of increased investment.
Investment in African connectivity
Fibre connectivity requires a robust digital network of subsea cables, data centres and terrestrial fibre networks. Exponential growth in the demand for fast internet is supported by new subsea cables connecting Africa to the rest of the world. Along with these developments, there is also the need for more data centres on African soil so that globally-competitive speeds can be enjoyed by individuals and businesses across the continent.
The Digital Economy for Africa Initiative (DE4A) aims to have all individuals, businesses and governments digitally enabled by 2030. Bridging the digital divide is essential for job creation and access to public services, and as internet use increases so do opportunities for investment.
IT infrastructure in Africa is expected to reach $4 billion in the next 4 years. Locally-based data centres are a key area for investment. These centres are an essential component of cloud-computing because they enable high-speed processing of big data and high traffic volumes. Data centres are vital for businesses to have cloud-based backup and recovery, as well as providing the necessary speeds for at-home activities like online gaming or HD video streaming.
Growing demand for data centres in Africa
Investment in Africa’s internet sector, particularly data centres is estimated to grow by 15% in the next four years. At present, there is an over-reliance on data centres based elsewhere and this seriously affects internet speeds in Africa. With the advancement of tech in Africa, the next few years will see both public and private investment in data centres.
South Africa has the most data centres on the continent, with 26 currently in operation. Johannesburg is home to 15 data centres that also service markets in neighbouring countries. Although South Africa has the largest market for data centres, energy consumption is an issue and something that needs to be addressed.
These entities consume a lot of energy, prompting plans to power these sites with self-generating renewable energy. This will ensure uninterrupted operations and improve energy efficiency. The shift to renewable power is something investors are looking out for because dependence on the South African national electricity grid is risky.
South Africa’s booming internet sector
More South African businesses are adopting a digital business model which supports remote collaboration through cloud computing, lowering costs via automated processes. Small to medium-sized enterprises (SMEs) are using smart working technology solutions to take their businesses to scale.
Businesses are moving away from having on-premise data centres. It is expensive to buy the necessary hardware and accommodate on-site servers. When businesses want to have the agility to quickly scale up or down, remote data centres offer a much more cost-effective solution. The shift to the cloud means that more businesses are using virtualised infrastructure and this is driving the demand for Africa’s data centres investment boom.
In South Africa, the government is making headway to support the expansion of the digital economy. Government policies highlight the connection between digitisation and economic growth. There are government initiatives which seek to attract Foreign Direct Investment (FDI), such as tax breaks for new developments in ICT Special Economic Zones (SEZ).
Better connectivity in South Africa
Digital transformation has skyrocketed across a number of industries in recent years. The food industry has embraced online platforms for ordering and delivering meals. Online shopping has boomed, allowing customers to enjoy reliable and convenient home deliveries. E-commerce in South Africa has blossomed and, thanks to cloud-computing, it has become a lot more efficient and secure. The tech revolution is supported by private investors looking to create a digitally-enabled economy.
Apart from private investment in Africa’s internet sector, there are also proposals for public investment. The South African government has put forward an idea for its own data centre. The intention behind The State Digital Infrastructure Company (SDIC) is to put public services on the cloud, creating an interconnected governance system which embraces 4IR. Although it might take a few years to come to fruition, connecting national departments, provinces, and municipalities via the cloud would certainly improve access to a wide range of public services.
Investment in Africa’s internet sector
For individuals and businesses, the internet sector is booming in Africa. South Africa is leading the Africa tech revolution with digital infrastructure that is already in place and new projects on the horizon. South Africa is a hub for African connectivity with its subsea fibre optic cables and data centres providing high-speed internet both locally and to the rest of Africa.
Massive demand for reliable internet is sparking even greater investment. A growing digital economy has attracted investment for even more subsea cables and data centres. At WonderNet, our vision is to provide high-speed internet to homes and businesses across South Africa.
The internet is fundamental to our economy and our future, so we are excited to see this boom in investment into Africa’s internet sector. For more information about our fibre offerings or to get a quote for an internet upgrade, please contact us today or check if we’re connected to your address.