Egypt: One of North Africa’s Most Promising Emerging Markets
While much attention is focused on the digital infrastructure advancements in places like the United States and China, Africa is quietly emerging as a formidable player in the data centre market.
According to a report published by the International Finance Corporation, Africa’s internet economy has the potential to grow to US$ 180 billion by 2025, representing 5.2 percent of the continent’s GDP. By 2050, this number could soar to US$ 712 billion, making up 8.5 percent of Africa’s GDP.
The rise of the internet economy signifies the increasing demand for more reliable and advanced digital infrastructure in Africa, especially North Africa. In this piece, we are looking at one such North African data centre market: Egypt.
What makes Egypt a desired data centre destination?
Located strategically at the crossroads of Africa, Europe, and Asia, Egypt is emerging as a prime hub for connectivity data centres. Positioned at the centre of global trade routes, Egypt is now establishing itself as the next key player in the data centre industry, facilitating enhanced connectivity and data exchange across the world.
According to Knight Frank’s The MENA Report: Navigating the Data Centre landscape in the Middle East and North Africa Egypt currently has 13 MW of active IT capacity, with a pipeline poised to expand the country’s offerings tenfold. As of Q3 2023, the aggregate supply in Egypt increased by 133 MW over 12 months. The supply of data infrastructure in Egypt is increasing at an exponential rate marking significant potential for the data centre market in the country.
Key players in the Egypt data centre market include Telecom Egypt, Raya Data Centers, Etisalat, GPX Global Systems, Khazna Data Centres, Africa Data Centres, Gulf Data Centres, and others. Readers would recall that last year, Khanza Data Centre partnered with Benya group to build the country’s first hyper-scale data centre.
Government support for digital transformation
In April this year, Egypt launched its first government data and cloud computing centre, the first centre that processes big data and artificial intelligence within Egypt and North Africa. Before the centre was built, much of Egypt’s data was stored abroad. Now, with the data centre operating domestically, Egypt can better control its data sovereignty, ensuring that sensitive information remains within its borders and is subject to local regulations and security measures, thereby reducing reliance on foreign entities and enhancing national security.
The inauguration of the computing centre marks a significant milestone for the data centre market in Egypt, highlighting the commitment by the Egyptian government in advancing this sector. To further support the development of IT infrastructure in the country, the government is also promoting the use of renewable energy sources to overcome both increased power demands and rising global energy prices, of which both are crucial for the construction and operation of data centres.
Potential for Sustainable Data Centre development
Egypt is situated in the Earth’s sun belt, receiving abundant solar energy.Leveraging on this geographical advantage, it is highly plausible for Egypt to increase its renewable energy capacity.
The Egyptian government has set ambitious goals to generate 42 percent of its electricity from renewable sources by 2035. In the 2023-2024 fiscal year alone, Egypt plans to invest US$ 2.6 billion in renewable energy projects, aiming to boost the sector’s share in the national energy mix to 11.8 percent.