How Nigeria is Powering the Future of Data Centers: Growth, Investments, and Energy Challenges

Global spending on data centers has reached about 580 billion dollars this year. That figure is already higher than the money flowing into new oil exploration. The shift signals a major reordering of the world economy and Nigeria is becoming a critical player in this fast rising sector.

According to the International Energy Agency, data centers consumed about 415 terawatt hours of electricity in 2024. That is roughly one point five percent of global electricity use. The agency projects that demand could double before 2030 as artificial intelligence workloads expand. This rising demand is already forcing countries to rethink energy planning, grid investment and renewable capacity.

Nigeria is building capacity faster than many expected. Industry analysts project growth from about 116 megawatts in 2024 to more than 226 megawatts by 2029. Operators are expanding in Lagos, Abuja and PortHarcourt, and international investors are placing strong bets on the market.

Recent investments highlight the scale of activity:

• Open Access Data Centres announced a 240 million dollar project in Lekki in Lagos which includes a 24 megawatt facility connected to the Equiano subsea cable
• Rack Centre is completing a twelve megawatt facility already prepared for AI workloads with plans to integrate solar and gas based power
• International Finance Corporation approved a 100 million dollar investment to expand Raxio Group’s facilities across Africa including West African markets

The appeal is clear. Lower latency, better data protection and stronger digital infrastructure support Nigeria’s growing financial, media, telecom and cloud industries.

Electricity supply is the decisive factor. Nigeria’s grid can deliver about five thousand megawatts on most days despite having far higher installed capacity. That gap forces operators to depend on expensive and polluting diesel generators. Energy often accounts for more than thirty five percent of operating costs at major Nigerian data centers.

To stay competitive, operators are turning to new energy models:

• Gas based generation is becoming standard because it is cheaper and more reliable than diesel
• Solar capacity is being added to reduce fuel costs and stabilize supply during peak demand
• Some industry leaders are calling for long term plans that include nuclear energy to support round the clock AI workloads

These solutions are emerging faster in Nigeria than in many other African markets because the pressure to secure reliable power is immediate.

Across West Africa, demand for data storage, cloud services and AI computing is rising. Ghana, Ivory Coast and Senegal are attracting regional investments and Africa Data Centres has announced major expansion plans in West and Southern Africa. Industry analysts expect Africa’s total data center capacity to triple by 2030 which reflects clear confidence in the continent’s digital economy.

South Africa offers an example worth watching. A twelve megawatt solar farm dedicated entirely to data center operations was commissioned by Africa Data Centres and Distributed Power Africa. This model of creating energy at source is likely to spread across West Africa.

The rewards are significant. Better data infrastructure attracts investment, supports local innovation and strengthens digital sovereignty. It also gives Nigerian businesses the tools to compete with global players. But the risks are equally clear. Without reliable and cleaner energy, the cost of running data centers will rise and project timelines will slow down.

Nigeria stands at a defining moment. The growth in digital infrastructure is real and accelerating. The next phase depends entirely on energy planning, regulatory efficiency and strategic investments in clean power.

Artificial intelligence, cloud computing and national digital competitiveness all rely on this foundation. Nigeria has what it takes to shape this future. The country only needs the power to match its ambition.