Africa’s digital economy is entering a new phase of growth, with artificial intelligence (AI), cloud computing, digital platforms and connected technologies driving demand for a new generation of infrastructure.
At the centre of this transformation are data centres, which are becoming as important to the digital economy as power, transport and water infrastructure are to traditional economic activity.
Jarendra Reddy, Capital Projects and Infrastructure Leader at PwC South Africa, said the growth of AI is accelerating demand for digital infrastructure, but is not the only factor reshaping the sector.
“Cloud services, digital platforms, connected technologies and AI are transforming how organisations operate, deliver services and create value,” Reddy said.
“Behind this transformation sits an increasingly important foundation: digital infrastructure.”
While AI is generating substantial demand for computing capacity, the expansion of cloud computing, digital commerce, connected services and enterprise digital transformation is also driving the need for scalable data infrastructure.
Growing concerns around data sovereignty, cybersecurity and the local hosting of critical workloads are adding further momentum, as governments and regulated industries seek greater control over important data and digital services.
PwC’s Global Data Centre Outlook 2026 to 2050 projects that data centres could attract $31.6 trillion in global capital investment through 2050.
For South Africa, PwC forecasts $582 billion in cumulative infrastructure investment between 2025 and 2050, including $71bn in digital infrastructure.
Reddy said these trends demonstrate that data centres were no longer simply technology assets. “Today, they are increasingly recognised as critical infrastructure alongside power, transport and water systems,” he said.
The shift could have significant implications for South Africa and the rest of the continent.
Rather than simply competing with larger global economies in the development of AI applications, African countries have an opportunity to build the infrastructure ecosystems that allow businesses, governments and consumers to participate in the digital economy.
South Africa is already positioned as the continent’s most established data centre market, said PWC. Projected cumulative data centre investment across Africa was estimated at $255bn by 2050 under PwC's central forecast scenario.
Under a scenario involving stronger demand for local and regional digital infrastructure, investment could rise to $284bn.
For South Africa, the opportunity extends beyond attracting data centre investment.
A stronger digital infrastructure ecosystem could help position the country as a regional digital hub, supporting investment, job creation and economic activity while strengthening its role as a gateway into other African markets, said Reddy.
“The opportunity is not to compete in the global AI race on the same terms as the world’s largest economies. It is to become the infrastructure platform that enables Africa’s digital economy,” Reddy said.
The rapid expansion of data centres also highlights one of South Africa’s most important infrastructure challenges: electricity.
Data centres require significant amounts of reliable power, particularly as AI workloads become more computationally intensive.
PwC’s Infrastructure Outlook forecasted about $83bn would be required in power infrastructure investment in South Africa through 2050.
The question is increasingly not simply where data centres can be built, but whether surrounding infrastructure can support them at scale without placing additional pressure on resources needed by households, industry and other businesses.
“The most successful markets are likely to be those that take a coordinated approach to power, digital, water and connectivity infrastructure rather than planning each in isolation,” he said.
“The defining infrastructure challenge of the next decade will not be whether Africa participates in the AI economy. It will be whether it builds the power, connectivity, water and digital infrastructure required to compete in it,” he said.
ashley.lechman@nationalmg.co.za