Lagos, Nigeria – August 30, 2025, Nigeria’s data center market is poised for significant expansion, with projections indicating a rise from a valuation of USD 278 million in 2024 to USD 671 million by 2030, driven by a compound annual growth rate (CAGR) of 15.82%, according to a recent report by ResearchAndMarkets.com. This growth is fueled by increasing digitalization, cloud adoption, and government initiatives aimed at bolstering the country’s digital infrastructure.
The Nigerian data center market is emerging as a key player in Africa, contributing approximately 9.9% of the continent’s data center investments in 2024. Lagos dominates the market, commanding an 81% share with an IT load capacity of 94.56 MW, largely due to its strategic position as a hub for nine submarine cable landing points, ensuring robust connectivity. The city’s prominence is further enhanced by trade-free zones like the Lekki Free Zone, which offer significant business incentives for data center operators.
Key drivers of this growth include Nigeria’s National Digital Economy Policy and Strategy (NDEPS 2020-2030), which aims to transform the nation into a fully digital economy by 2030. The policy has spurred a shift from on-premises to cloud and colocation data centers, with enterprises increasingly relying on managed services. The surge in internet penetration—reaching 63% in 2022—and the launch of 5G technology have further accelerated demand for data storage and processing capabilities, particularly in sectors like fintech, e-commerce, and telecommunications.
Major global players such as Equinix, which acquired MainOne in 2022, and Digital Realty, which purchased Medallion Data Centres, are entering the market through strategic partnerships and acquisitions. Local operators like Africa Data Centres, MTN Nigeria, and Open Access Data Centres (OADC) are also making significant contributions, with OADC announcing a new 24 MW facility in Lagos set to come online by 2026. Additionally, Huawei Technologies launched a local cloud service in December 2024, reducing latency for Nigerian customers from 80 milliseconds to approximately 15 milliseconds, aligning with data protection regulations.
The market is witnessing a boom in construction, with 327.8 MW of data center capacity under development as of December 2024, expected to increase the current 65.8 MW core and shell power capacity fivefold within the next 4-5 years. Massive data centers, accounting for 46% of the market share with 53.65 MW, dominate due to demand from cloud service providers and large enterprises. However, challenges such as power constraints remain, with approximately 80% of Lagos’ electricity supplied by fuel generators as of 2022. Operators are exploring alternatives like gas-powered generators, with MTN Nigeria reporting 40% power savings compared to diesel, while renewable energy adoption remains limited.
Government initiatives, including tax incentives and investments in broadband connectivity, are expected to drive further growth. The thriving fintech and startup ecosystem, coupled with the rise of e-commerce platforms like Jumia, which reported 7.9 million Nigerian visitors in 2022, underscores the increasing need for robust data infrastructure. Despite challenges like power outages and regulatory uncertainties, the long-term outlook for Nigeria’s data center market remains positive, with investments projected to exceed USD 2.94 billion from 2025 to 2030.
Sources: ResearchAndMarkets.com, Mordor Intelligence, Arizton Advisory & Intelligence