Africa’s digital infrastructure enters execution phase as capital, policy to align in 2026

At the start of each year, attention turns to what lies ahead for Africa’s digital infrastructure ecosystem.

The outlook for 2026 reflects a blend of advocacy and evidence: what must happen to unlock scale through collaboration, alongside signals drawn from capital flows, project pipelines, policy direction, and observed market behaviour across the continent.

While the global economy is expected to expand cautiously, slowing from 2.9 percent in 2024 to about 2.6 percent in both 2025 and 2026 amid tighter financial conditions and geopolitical uncertainty, Africa’s growth outlook is strengthening.

Economic expansion across the continent is projected to accelerate into the 3.8 percent to 4.3 percent range, supported by improving macroeconomic stability in several large economies, easing inflation, rising public and private investment, and a gradual recovery in consumption and trade.

This divergence highlights Africa’s relative growth momentum at a time when many advanced and emerging markets face structural slowdowns. It also reinforces the role of sustained investment in digital infrastructure, connectivity, and productivity, enhancing sectors as a mechanism for translating growth into durable, long-term economic gains.

Investment rises, but bankability defines the ceiling

Recent commitments point to growing confidence in Africa’s digital infrastructure, with at least $1.2 billion announced in 2025 across connectivity, backbone fibre, and public digital infrastructure, largely driven by development finance institutions.

These include €450 million ($530 million) in IFC-backed financing to expand broadband and mobile connectivity through Orange Mali and Maroc Telecom in Mali and Chad; $500 million in World Bank financing for Nigeria’s Project BRIDGE; $120 million in World Bank grant funding for Zambia’s public digital infrastructure; $65 million raised by WIOCC to expand open-access backbone capacity and $0.4 million from the African Development Bank for DIGIAPE.

“This long-term financial partnership with IFC in Chad and Mali will boost network coverage with a better quality of service, allowing massive adoption of 4G and supporting the countries’ development,” said Mohamed Benchaaboun, CEO of Maroc Telecom.

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“The BRIDGE project puts to action the bold and ambitious vision to unlock the potential of the digital economy in Nigeria working alongside the private sector. Access to fast and reliable internet will help to create more quality jobs for millions of Nigerians across all the 774 LGAs in addition to improving the quality of essential services like education and healthcare,” said Mathew Verghis, World Bank country director for Nigeria.

“This marks a major step forward in our mission to build a truly inclusive and future-ready digital economy for all Nigerians,” said Dr. Bosun Tijani, Nigeria’s minister of Communications, Innovation and Digital Economy, on unveiling the technical design for Project BRIDGE.

While the availability of patient capital for foundational assets is evident, total investment remains difficult to define and underscores a sharp contrast with other regions.

In Asia-Pacific, more than $15 billion had been raised for data centres alone by mid-2025 across 21 financing transactions, contributing to an estimated $800 billion colocation market.

Despite similar population growth dynamics, Asia’s deeper capital markets, larger enterprise base, stronger cloud and AI demand, and clearer data sovereignty frameworks continue to attract significantly larger private capital flows.

“Discussions with financiers consistently point to bankability as the binding constraint. Many digital infrastructure projects fail well before reaching lenders, as risks are poorly defined, revenue models remain unclear, and early-stage project preparation is weak,” Temitope Osunrinde, director, Africa Hyperscalers told BusinessDay.

In response, DFIs are moving earlier into the project lifecycle, funding feasibility studies, land acquisition, and structuring work to ensure assets are financeable before syndication.

In West Africa, these challenges are magnified by local interest rates exceeding 30 percent, persistent perceptions of telecom operators as cash-generating targets that encourage rent-seeking and vandalism, limited infrastructure sharing, and underutilisation of existing assets.

“At the same time, although African sovereign wealth and pension funds collectively manage close to $1 trillion, less than one percent is allocated to infrastructure, with domestic capital still concentrated in real estate markets such as Lagos and Nairobi rather than deployed into productive digital assets,” Osunrinde asserted.

While artificial intelligence dominates industry narratives, bankable use cases with predictable returns remain limited, keeping many investors cautious.

This is where local capital is increasingly seen as critical, de-risking early stages, deepening markets, and preparing assets for larger pools of institutional funding. Wider adoption of local data centres and cloud platforms by domestic enterprises could materially lift colocation demand over time.

Unlike power projects, which benefit from long-term offtake agreements, digital infrastructure faces sharper revenue challenges. Data centres, fibre networks, and cloud platforms must demonstrate demand certainty, operational reliability, enforceable rules, and credible paths to capital recovery to unlock long-term investment.

Looking ahead to 2026, greater emphasis is expected on project preparation facilities, more deliberate mobilisation of pension and insurance capital, increased use of blended finance, and stronger policy coordination to narrow Africa’s risk premium, the director predicted.

“Demand for bandwidth and compute continues to rise, but capital will flow only to projects that evolve from ambition into bankable, repeatable models. Without robust fundamentals and credible cash flows, market repricing is likely to be unforgiving,” he stated.

Data centres and AI: Growth with structural constraints

Forecasts for data centres and cloud infrastructure remain firmly upward. Multiple market trackers project steady growth through the decade, with estimates suggesting Africa’s data centre investment market could exceed $6.81 billion by 2030, driven by accelerating cloud adoption, expanding subsea capacity, and deeper inland fibre penetration.

As governments, enterprises, and digital platforms generate more data locally, demand for resilient, in-country compute continues to rise.

“Data centres as such and overall digital connectivity is an important area of focus for the IFC,” said Sarvesh Suri, IFC regional industry director for Infrastructure and Natural Resources in Africa.

North Africa is expected to lead near-term investment, supported by stronger grid stability, improved access to competitively priced power, clearer cross-border regulatory frameworks, and policy environments increasingly open to international capital, Osunrinde predicted, adding that, “Well-designed data sovereignty frameworks are reinforcing this momentum by providing clarity on data residency, security, and compliance while remaining interoperable with global cloud platforms.”

He affirmed that Southern Africa is likely to follow, anchored by South Africa’s mature enterprise base, established financial services sector, and proximity to hyperscale ecosystems; West Africa continues to attract incremental investment, led by Nigeria, as connectivity improves and demand from enterprises, financial institutions, content platforms, and government digitisation deepens.

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Over time, growth is expected to broaden eastward as power availability improves, policy clarity increases, and project structures become more bankable, he stated.

AI is set to dominate industry conversations in 2026, though much of the activity will remain aspirational in the near term.

Retrofitting existing data centres for AI workloads is complex, given long build timelines and still-unproven economics outside established global clusters.

While global technology companies are expected to spend over $500 billion on AI infrastructure in 2026, only a limited share is likely to flow into Africa initially, Osunrinde stated.

Across regions, power remains the defining constraint, the director said, adding that, “Power purchase agreements, captive generation, grid negotiations, and bankable energy contracts are now central to data centre investment decisions.”

A gradual decentralisation of capacity is also expected, with modular facilities complementing large hubs to serve edge demand, latency-sensitive applications, and national sovereignty requirements, he averred.

Connectivity shifts inland

In connectivity, 2026 is expected to focus less on new subsea cable announcements and more on extracting value inland through backbone densification, metro fibre, cross-border corridors, and last-mile expansion. With subsea cables landing in at least 35 African countries, the constraint has shifted decisively to middle- and last-mile networks.

Nigeria illustrates this imbalance: while subsea capacity exceeds 360 terabits per second and internet penetration has crossed 50 percent, fixed broadband remains below six percent, prompting the proposed $2 billion Project BRIDGE, expected to begin in 2026.

In the interim, operators and governments are supplementing terrestrial builds with satellite solutions, including Starlink partnerships and Direct-to-Device services.

Macroeconomic pressures continue to shape deployment choices. Although foreign exchange conditions are stabilising and tariffs in some markets are becoming more cost-reflective, dollar-priced equipment has slowed smaller operators, accelerating a shift from ageing wireless platforms toward fibre where economics allow.

Coordination, through shared infrastructure, consortium builds, and integrated metro networks, is emerging as the defining shift, Osunrinde stated.

Policy momentum builds, execution remains key

Policy momentum strengthened across Africa in 2025, marked by a shift from fragmented interventions toward coordination, execution, and infrastructure-first regulation.

In Nigeria, a long-delayed tariff adjustment and the announcement of Project BRIDGE signalled a move toward a structured, PPP-led national fibre backbone. Ghana advanced similar thinking through its dig-once policy.

Elsewhere, progress continued on data sovereignty frameworks, spectrum reform, cloud and hosting guidelines, and infrastructure-sharing mandates. Regulators showed greater openness to industry consultation and phased implementation.

Osunrinde averred that while execution challenges remain, clearer frameworks and regulator upskilling are helping to narrow risk premiums and deepen the market.

Insecurity as a structural risk

Insecurity remained a major non-sector constraint in 2025. Fibre cuts, tower vandalism, diesel theft, and sabotage reflected broader challenges of poverty and weak enforcement, translating into higher operating costs, service disruptions, and elevated risk premiums.

In Nigeria, the Christmas Day terrorist attack in Sokoto underscored the scale of the challenge, while renewed security actions signalled a potential inflection point. If sustained, stronger enforcement could materially improve operating conditions, protect backbone assets, and restore investor confidence.

“Looking ahead, resilience will increasingly depend on whether governments classify and protect digital assets as critical national infrastructure. Without addressing insecurity, progress in policy and funding risks being undermined on the ground,” the executive said.

From announcements to delivery

The signals from 2025 point to a digital infrastructure market that is maturing, though unevenly. Capital, demand, and policy intent are increasingly aligned, but outcomes will hinge on delivery.

“In 2026, progress will depend less on announcements and more on converting policy into permits, capital into construction, and demand into predictable, bankable revenue.

“Africa’s digital future is achievable and financeable. The task ahead is execution, deliberate, coordinated, and at scale,” Osunrinde assured.

Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.

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