Africa’s bid to grow its digital economy to an estimated US $1.5 trillion by 2030 is facing mounting headwinds from weak infrastructure and fragmented markets, industry officials and analysts say, potentially slowing investment and innovation across the continent.
Despite the rapid expansion of data centres and digital services, persistent power and connectivity shortages, paired with divergent national regulations, are undermining efforts to build a unified digital market, sources warn.
Transmission and Connectivity Challenges Undercut Growth
Africa’s data centre sector is poised for significant expansion, with market estimates projecting growth from roughly US $3.5 billion in 2024 to nearly US $6.8 billion by 2030. This expansion aligns with growth in cloud computing and artificial intelligence, sectors seen as key drivers of future economic value.
But industry executives say infrastructure weaknesses are threatening the impact of that growth. Transmission fundamentals — including reliable electricity grids, affordable internet bandwidth, and terrestrial fibre networks — remain uneven across the continent, impeding the performance of digital infrastructure and limiting scalability.
“Building data centres is the easiest thing — but they must be connected,” said Dr. Krishnan Ranganath, Regional Executive for West Africa at Africa Data Centres, noting that outdated power lines, high connectivity costs, and low availability of stable power can reduce facilities to “concrete blocks” rather than economic enablers.
Regulatory Fragmentation and Market Barriers Persist
Beyond physical infrastructure, divergent regulatory frameworks across Africa are complicating efforts to scale digital services. Varying data localisation laws, technical standards, and market requirements force companies to adapt operations on a country-by-country basis, raising compliance costs and deterring cross-border investment.
Such fragmentation limits Africa’s ability to forge a cohesive digital ecosystem and may discourage multinational cloud and technology firms from investing at scale, analysts say. This, in turn, could hinder the continent’s competitiveness in global digital markets that demand uniform standards and seamless integration.
Economic Stakes and Broader Implications
The stakes are high. A robust digital economy offers the potential to boost economic growth, job creation, and innovation across sectors from finance to healthcare. Yet infrastructure deficits and regulatory divergence threaten to confine growth to isolated pockets rather than a unified continental market.
Weak connectivity and power shortages also hamper broader digital inclusion. According to research on Africa’s digital landscape, millions of people lack reliable electricity and mobile broadband access — basic preconditions for widespread digital adoption.
Policy Prescriptions and Paths Forward
Experts argue that coordinated action is essential. Investments in backbone networks, reliable grid infrastructure, and expanded broadband coverage could strengthen the foundation for digital growth, while harmonised regulations aligned with regional frameworks would make cross-border digital trade and investment more attractive.
“Every country requires a robust network — and we must fix the fundamentals from the grassroots level up so that in five to 10 years, African infrastructure can converge,” one industry official said.
Public-private partnerships and regional policy alignment under initiatives such as the African Continental Free Trade Area (AfCFTA) are frequently cited as mechanisms to lower barriers and encourage integration of digital markets, although progress remains uneven.
Looking Ahead
As Africa races to capitalise on the economic promise of digital technologies, the interplay between infrastructure quality and regulatory coherence will shape whether its digital economy reaches projected heights or remains constrained by fragmentation. Sustained investment, regional cooperation, and policy reform may prove decisive in determining whether the continent secures its place in the global digital economy.
