New Telegraph

September 29, 2023

Data centre: New investment to cut Nigeria’s N60bn loss


Investments in data centre raises hope for local hosting as operators expand capacity


Data hosting in Nigeria is set to wear a new face, as one of the country’s leading data centre operators, Rack Centre, is set to pull $100 million into expansion.


With more capacity and reliability at the core of this expansion, stakeholders in the country have expressed confidence that more Nigerians would be encouraged to host their data locally, thus reducing the N60 billion the country loses annually to foreign hosting.


According to the Nigeria Internet Registration Association (NiRA), the country loses up to N60 billion worth of foreign exchange to other countries every year as payments for web hosting services. Many had blamed the preference for foreign hosting on the high cost of bandwidth to access the sites all year round and high cost of generating electricity, which contributed to the exorbitant fees when servers were hosted in the country.


However, the new investment by Rack Centre is expected to address some of these challenges. The $100 million expansion programme is expected to increase its data centre capacity to a total net lettable white space of 6000 square metres and allow for 13MW of IT power capacity in its Lagos campus.


According to the company, this will be in addition to the current expansion already underway to double existing capacity to 1.5MW and 1,200 square metres of white space in early 2021.


The expansion is also expected to bring unprecedented carrier neutral scale to West Africa and is in response to increasing demand for data centre space from cloud uptake, telecommunication investment and outsourcing of IT facilities by enterprises in the region.


With over 146 million Internet subscribers as of July this year, more than any country in Africa or Europe, Nigeria is a key entry point for global telecommunications, content and cloud players seeking access to the West Africa region.


This further explains why investors are swarming the Rack Centre expansion project. In March 2020, Actis, a London private equity firm, announced an investment in Rack Centre, taking a controlling stake in the business alongside Jagal.




The funding for this expansion will come from a $250 million pan-African data centre platform established by Actis and Convergence Partners, a leading ICT infrastructure investor in Africa. In addition to Rack Centre, the platform is also actively developing additional buy and build opportunities across Africa, to establish a network of carrier neutral data centres aimed at catering to carrier, cloud and hyperscale customers.


Tim Parsonson, co-founder of Teraco Data Environments, the largest carrier neutral operator in Africa, joined the Board as Chairperson.


The platform has also engaged Frank Hassett, a veteran of the global data centre industry and previous Vice President of Infrastructure at Equinix, who brings over 1300MW of build and operate experience, to assist with hyperscale expansion.


Andile Ngcaba, Chairman of Convergence Partners, said: ‘’Africa is at the start of a critical time in its development, as the 4th industrial revolution offers the chance to leapfrog many of Africa’s challenges and harness the immense potential of its people.


Convergence Partners is delighted to partner with Actis in accelerating the growth of high quality data centre infrastructure, an indispensable part of the foundation of this revolution in the region.’’


Rack Centre brings global best practice to Nigeria, as the first carrier neutral data centre in the region to achieve Uptime Institute Tier III Certification of Constructed Facility (TCCF).


As a uniquely scale carrier  neutral player, Rack Centre allows unrestricted connectivity between customers, telecommunication carriers and internet exchange points within its data centres. Dr Ayotunde Coker, Managing Director of Rack Centre, said: ‘’We are proud of the quality and scale bar we have set in the region and are scaling to be the de-facto digital data hub for West Africa.


Mass adoption of digital working models and content distribution is driving growing investment in the region and Rack Centre offers a world class location to house these IT and telecoms facilities.’’


Supporting this ambition, engineering consultancy Arup was appointed for the project. Arup’s multidisciplinary data centre design teams are world leaders in the design and construction of data centres, having designed over 2,000MW of IT capacity for industry leading tech giants and co-location providers across the globe.



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