Regulator makes case for further data centre investments in Nigeria

As Nigeria’s digital economy agenda gathers steam, the Nigerian Communication Commission (NCC) said it has become highly imperative for further investments in the data centre segment of the telecoms sector.

With over $1 billion data centre investment seen thus far, largely in Lagos, NCC noted that more data investment is required to further deepen the broadband agenda of the Federal Government.

The Executive Vice Chairman of NCC, Prof. Umaru Danbatta, said this at the weekend at the Telecoms Sector Sustainability Forum (TSSF) 4.0 organised by Business Remarks in Lagos. The theme of the event was: “Mainstreaming Data Centres in the Nigerian Digital Economy.”

Danbatta, who was represented by Head, Tariff Administration NCC, Dr. Sunday Atu, said mainstreaming data centres required collective efforts.

According to him, there is need for support to ensure data centres not only operate to guarantee national digital sovereignty, but also prioritise contents reflecting the country’s cultural norms, contexts and ideological values.

He said data is regarded as the new oil globally with increasing intensity in the context of the emerging digital economy.

For that reason, Danbatta explained that data had become a subject of special consideration by regimes, requiring appropriate structures and frameworks to truly tap and optimise the opportunities provided by this new order.

The EVC noted that data centre services, no doubt, held the keys to the ultimate crystallisation of the new line of thinking within the ICT sector and by extension to the greater national economy of nations in so many ways.

“Recent developments point to the limitless treasure within this space. Africa has recently assumed a new frontier and compelling destination for global big tech players.

“Tech giants, like Google with its Equiano subsea fibre cable spanning 15,000 km from Portugal to South Africa and strategic landing points in Nigeria and Namibia, are expected to increase connectivity more than five-fold within Nigeria while creating an expected 1.6 million jobs.

“Meta, the parent company of Facebook, is equally on the threshold of launching its own subsea cable called 2Africa in 2024 to connect 16 African countries at an estimated cost of $1 billion.

“It is targeted to generate close to $36 billion of economic output within two to three years of operation.

“While these, no doubt, portend significant socio-economic impacts for Nigeria, they bring to the fore the debate around digital sovereignty and the need for national policy and regulatory frameworks to further localise traffic and data,” he said.

According to Danbatta, the global data centre market is worth billions of dollars, and Nigeria is well positioned to attract a fair share of this investment.

In his remark, the Chief Executive Officer of Medallion Data Centre Ltd., Ikechukwu Nnamani, said: “If we look at other parameters, Nigeria should be at the forefront of the data centre industry in Africa.

“Unfortunately we are lagging behind and surprisingly African countries like South Africa and Egypt are way ahead of Nigeria.

He explained that from the Gross Domestic Product (GDP) point, broadband connectivity, and in terms of mobile subscription, Nigeria had significantly lower figures than other African countries.