July 10, 2024

Data centre investments in Nigeria can hit $1b — Ayotunde Coker

Data centre investments in Nigeria can hit $1b — Ayotunde Coker

The African data centre landscape is growing from coast to coast- from South Africa to Nigeria, Kenya, Ghana and even DRC Congo. In a study conducted by the African Data Centres  Association, ACDA, it is estimated that African Data Centre market will grow by 50 per cent within the next two years, doubling what it is now.

This comes with it, increasing demand for broadband penetration and cloud based services, which will trigger robust foreign direct investment.

In this interview, Dr Ayotunde Coker,  a  Distinguished Manufacturing Award Winner of Cranfield University, and Chief Executive Officer, Open Access Data Centres, OADC, escalates the possibilities of this growth. He highlights the strategic importance of Data Centres in Nigeria and Africa and is upbeat that Nigeria can attain, in the not too distant future, an investment of about one billion dollars in its data centre industry. 

He should know; because apart from sitting on the board of ACDA, as the Chairman, his OADC which African headquarters sits on a four hectare site in Lekki Nigeria, is leading the way in attracting investments. It secured about 50 million USD facility in June 2024 to expand data infrastructure in its data centre locations in Nigeria, South Africa and DRC Congo.

Dr Coker talks from the position of knowledge and authority on data issues and the data industry. He advances compelling reasons on why Africa is ripe as an investment destination on data centres. Excerpts.

Nigeria is gradually becoming a fertile ground for data centre operators. Why is data centre important to us?

Yes of course. We are a country of over 200 million people, with Lagos, the commercial centre alone, having over 23 million out of that number. Nigeria has half the latency between South Africa and Europe. The data this population generates is a huge incentive. Nigeria has increasing broadband penetration which is over 40% which means that well over 100 million people are connected to broadband. That’s a lot of consumptive capacity.

The increasing adoption of 3G, 4G and recently, 5G, is also driving consumptive capacity. So data centres exist to take advantage of that capacity. That’s why we are experiencing significant interest in building data centres in Nigeria.

As the CEO of Open Access Data Centre, can you share what the company  has for Nigeria?

OADC is owned by the West Indian Ocean Cable Company, WIOCC group. WIOCC was established in 2008, as part of a consortium to build the EASSy cable, from the East coast of Africa.

To answer your question directly, our proposition is to bring together open access carrier-neutral data centers in Nigeria under our converged, open digital infrastructure model. Together with our Open Access wholesale connectivity, we will bring together a unique value proposition to the country and our clients.

We also have the Google Equiano cable which landed in Lekki. Already many Nigerian and international clients are hooked on Equiano.

We also intend to build data centres at key points across the country to help us bring that unique combination of open data centres and open connectivity to Nigeria as well.

WIOCC is the company that mitigated the damage caused to Nigeria and other West African countries recently plagued by undersea cable cut. Are there other ways it impacts on data centres in Nigeria, including OADC?

Well, let me first of all establish the nexus. WIOCC is a cable company. Cable companies land the cables in a data centre so they can get the connectivity from capacity into the cable landing station. For us, we’ve built a significant data centre, which is the point of landing for Google Equiano. 

What stands OADC out in Nigeria is that with WIOCC connectivity, we connect every single data center around Lagos and every single cable landing station. That was how  rerouting customers on the damaged cables was easily achieved.

Fortunately, in Lagos we now have quite a few data centers being built to hyperscale. Having the connectivity level we have with an undersea cable is a good thing. It gives us the edge of pushing out capacity and bringing capacity in at scale.

How does this fare on the depressing Nigerian economy?

The impact is huge, positively. On a rough estimate, there could be more than 60 megawatts of capacity from different data centres including, MainOne, Rack Centre, OADC, Airtel, Digital Realty, Africa Data Centre, ADC among others.

It is estimated that there is approximately $10 million investment in every megawatt. So roughly you are talking of over $600 million investment injected into the country in that over 60 megawatts; and more are coming.

Meanwhile, there’s another angle to the investment opportunities data centres can bring. Research has shown that for every $10 million you put into data centers, the actual systemic benefit in the environment could be anything 50 times to 100 times.

There’s payment for expensive professional services to do designs; purchase of mechanical and electrical equipment.

When the data centre goes live, it will be connected to the power company and that’s also a huge investment. If you add the investment on all levels of operational support – low, middle class, and highly educated, you can see where that sort of 50 to 100-fold comes from.

Now if you say there’s $100 million being spent on a data center, say for 10 megawatts, that means you can get a billion-dollar impact on the economy. Now you can only imagine the impact this number of data centers can make on the Nigerian economy.

Do you know of significant challenges these data centres are having, operating in Nigeria?

There are always challenges everywhere; the most important thing is how to deal with them. Power is an issue because data centre operation is very complicated; you have to maintain 100% uptime. For us, we’ve made sure to have 100% power. There are ways to do it.

Any data centre operator must engineer power accordingly with the right mix – utility power, IPP, or generator, the most important is to secure 100% power availability.

Maintaining the mechanical and electrical equipment that feed power to the racks as well as devices within the data centers to aid operational processes have to be precise to meet the levels of reliability uptime and client service. So, it’s a complicated mesh of operational things that one would have to deal with.

You know that getting the right talent is also a challenge, so investment will have to go heavily in bringing in talents with the right skill sets to build a strong brand.