•AI, cloud, banking, security suffer
•Country’s 21 data centres, less than 7% of required capacity
•Runs on 40MW power out of required 600MW
•Lagos hosts over 90% of all facilities, while most states have none
•AI-ready data centres zero; hyperscale facilities still 2–3 yrs away
•’We’re expanding capacity’ —Senate
Nigeria is accelerating push towards Digital Public Infrastructure, DPI, rolling out systems leveraging artificial intelligence, AI, financial technology, fintech, cloud services, e-government, cashless payments, and smart-city initiatives. But experts have warned that these ambitions may be fruitless if they continue to rely on a fragile foundation.
At the core of the problem is a shortage of data centres – the secure facilities that store and process digital information – needed to support its digital economy. Without sufficient modern centres, digital services become unreliable, slow, and risky. This shortage is not merely technical; it is a public infrastructure issue. Just like roads, electricity, and bridges are essential for an economy, data centres are essential for a digital economy. Until Nigeria builds enough across the country, its online banking, AI services, and government e-services will struggle to function efficiently.
Data centre numbers and capacity
According to industry records from DataCenterMap, a widely used database tracking data centre facilities by country and operator, Nigeria has approximately 21 operational data centres. About 18 of these are located in Lagos, while the remaining three are spread across other states.
Some of the major facilities include Rack Centre LGS1 and LGS2 in Lagos, a Tier III carrier-neutral campus; Africa Data Centres LOS1, operated with Cassava Tech; Open Access Data Centres, OADC; Digital Realty LKK1 and LKK2 in Lagos and ABV1 in Abuja; INQ.Digital Nigeria; MTN Nigeria’s Sifiso Dabengwa Data Centre in Ikeja, a Tier III facility with 4.5 MW capacity and 780 racks; Internet Solutions (NTT Group) Fabac Centre; Equinix LG2 in Lekki; MTN Ojota Data Centre in Ikorodu; Galaxy Backbone’s National Shared Services Center, NSSC, with 0.825 MW built-out capacity; and Layer3 Data Center in Abuja (IGI House), among others.
Speaking to Vanguard, CEO of Digital Realty Nigeria and former ATCON President, Engr. Ikechukwu Nnamani, said Nigeria needs at least 72 data centres to power a $1 trillion economy, with two centres in each state and FCT Abuja.
The shortage: Not just numbers, but capacity
According to Nnamani, Nigeria’s data-centre deficit has two major dimensions.
He said: “The first issue is quantity. Nigeria, a country of over 230 million people, has only about 21 operational data centres, with over 90 per cent in Lagos. Many states have none. Global digital hubs like London, Toronto, Amsterdam, and Cape Town have dozens.
“Nigeria is far behind. Previous estimates show we need at least two centres in every state capital, making a total of about 72. We are nowhere near this target.”
He added: “The second, even more important issue is active capacity. Many Nigerian data centres claim 10, 20, or even 30 megawatts, but in reality only 1 to 3 megawatts are active. Someone may say their facility is 30 megawatts, but only 2 megawatts are active.
“What matters is your active IT load, not what’s on paper. Today, Nigeria has less than 40 megawatts of active capacity. A country of this size should have at least 600 megawatts. That means we are delivering less than seven per cent of the capacity we truly need.”
According to him: “This concentration in Lagos severely limits inclusive connectivity and digital competitiveness.”
Africa’s Digital Imbalance
Nnamani highlighted that Africa as a whole operates at only about 20 per cent of its required data-centre capacity, with South Africa holding 80 per cent.
He said: “The rest of the continent, including Nigeria, shares the remaining 20 per cent. Nigeria’s share is a mere 0.1 per cent.”
Nnamani’s remarks point to a genuine structural gap in Africa’s data-centre infrastructure, but the figures themselves warrant caution. While South Africa is clearly the continent’s most developed market, industry data suggests its share is significant but not as high as 80 per cent.
No AI-ready data centres
Although Rack Centre has developed the 12MW LGS2 hyper-scale, AI-ready data centre designed to support high-density workloads and energy efficiency, industry experts, including Nnamani, maintain that Nigeria is yet to have an operational data centre purpose-built for core AI applications.
He said: “As of today, there is no data centre in Nigeria that is AI-ready. None! People may say otherwise, but I’m telling you the truth.”
This is despite over 300 Nigerian startups building AI-driven applications, almost all of which rely on computing power hosted abroad.
“They are using infrastructure located outside the country. It’s exactly what we saw in the early days of cloud computing. Most of the existing facilities were built before AI workloads became standard. They lack advanced cooling, power architecture, and design to support modern high-computer systems.”
Hyperscale AI facilities: Nigeria is 2–3 years behind
Nnamani believes Nigeria is “at least two to three years away from its first fully AI-enabled large-scale facility. It takes that long to build when you start. But it will happen. People have realised the need.”
He compared the country to South Africa, pointing to Teraco’s recently launched liquid-cooled AI-ready data centre.
He stated: “One of Teraco’s facilities is bigger than all the data centres in Nigeria combined.”
In the same vein, speaking at the 2025 Gulf Information Technology Exhibition, GITEX, CEO of MTN Nigeria, Dr Karl Toriola, warned that the country faces a critical shortage of data centre capacity as AI, adoption accelerates.
Toriola said: “Nigeria must urgently invest in data infrastructure, stable power supply, and human capital development to support AI growth.
The scale of demand from AI systems will far outpace existing capacity.”
Similarly, Country President for West Africa at Schneider Electric, Ajibola Akindele, highlighted the inadequacy of Nigeria’s existing data centres to handle AI workloads during industry briefings in Lagos.
Akindele explained: “Legacy facilities are ill-equipped for the energy, cooling and density demands of AI and must be modernised to support tomorrow’s workloads.”
Together, these insights underscore the urgent need for Nigeria to upgrade its data centre ecosystem if it is to fully harness the potential of AI and advanced digital services
Policy failure: Data centres treated as private ventures
Experts argue that a lack of clear policy is the major blocker. Nigeria has not recognised data centres as national digital public infrastructure. There is no national plan, no mandated minimum capacity per region, and no incentives for hyperscale investment. Data sovereignty remains weak, as government records, financial transactions, biometrics, and security intelligence are hosted abroad.
Nnamani stated: “You can’t talk about local clouds and ignore local AI. Both must be hosted in-country.”
He added that Nigeria’s national grid lacks the reliability and capacity to support the always-on, industrial-grade power demands of data centres, forcing operators to depend heavily on self-generated electricity.
He stated: “You can’t depend on the national grid. It’s a nonstarter. You are forced to build your own power plant. That alone costs about one million dollars per megawatt.
“So, a 100MW facility needs roughly 100 million dollars just for power. Most local centres rely heavily on diesel, making them some of the most expensive to operate in the world,” he explained.
Impact on banks, fintechs, and cloud users
Financial institutions are feeling the strain. Lotus Bank’s Chief Digital Officer, Akinlabi Adegoke noted that Nigeria’s data-centre capacity has improved, he however pointed out that “it is still not fully adequate for modern banking. Tier III facilities exist, but energy reliability, redundancy, and nationwide availability remain gaps.”
A Tier III data centre is highly reliable, with backups for every critical system, and allows maintenance without downtime, making it suitable for enterprises and cloud providers that need near-continuous uptime.
Adegoke added that “For mission-critical workloads like real-time payments, we face capacity constraints and rising operating costs.
“The shortage slows deployment cycles; increases fintech onboarding times, raises innovation costs, and limits reliability for high-volume transactions.”
He recommended incentives for local investment, better power infrastructure, and public-private partnerships to reduce foreign hosting reliance.
Also, Country Director of a Fintech company, Verto, Austin Okpagu, stressed the heavy dependence on diesel increases operational costs.
Okpagu said: “The issue isn’t physical server space, but last-mile reliability, high redundancy costs, and network vulnerability.
“Reliance on foreign centres complicates trust, security, and compliance. Localising core data anchors security within Nigeria’s regulatory framework,” he stated.
Similarly, founder and CEO of a Fintech firm, SnappyPay, Olaide Alim added: “Foreign data centres offer strong security, but customers expect their data to remain within Nigeria. The absence of enough local centres pushes fintechs into cross-border hosting, raising questions around jurisdiction, regulation, and digital sovereignty.
“Nigeria needs more Tier III and IV certified data centres with strong power redundancy and cooling infrastructure. Tax incentives and a structured national cloud policy would encourage investment and enable innovation.”
The Counterargument
Some industry voices disagree. Dr. Krishnan Ranganath of Africa Data Centres argues Lagos already has sufficient facilities. However, the real problem, he said, is the absence of strong local cloud-service providers. His point still confirms that Nigeria’s digital foundations are too weak for its economy’s size.
Energy demands highlighted by NITDA
NITDA Director-General, Dr. Kashifu Inuwa Abdullahi, while speaking on national television, highlighted AI data centres’ enormous energy needs.
He said: “Today, we have data centres consuming about 1.3 gigawatts, almost the same as Lagos State.
”AI data centres are power-hungry. Power is a global challenge for AI, but we must not use that as an excuse not to build our own capacity.”
He added: “Nigerian operators rely on high-speed on-site generation, solar, and the national grid. We need to innovate in power systems and infrastructure. As we invest in power, we must invest in AI infrastructure.”
Senate response: ‘We are expanding capacity’
Chairman of the Senate Committee on Communications, Senator Aliyu Bilbis, told Vanguard that the government recognises the gap and is taking action.
He said: “This is an era of AI and full digital transition. For us to grow our economy, we must increase local capacity to host and secure data. We cannot rely on storing sensitive national information outside our borders.”
He confirmed ongoing reforms by the Ministry of Communications and Digital Economy, strategic budget allocations for database modernisation, and industry seminars to align Nigeria with global standards.
“The policy is in place. We are fast-tracking implementation. Nigeria must not lag behind. We are pushing for an industry that competes globally,” he said.
Implications for Nigeria’s digital future
Without addressing these gaps, AI adoption will be limited, fintech downtime will continue, cloud migration will slow, cybersecurity risks will rise, government data will remain abroad, and 5G and smart-city projects will be delayed.
Yet, industry leaders see opportunity. Nnamani said: “The market is nowhere near saturation. If we truly want a digital economy, we must build more data centres and transmission networks.”
Nigeria stands at a crossroads. To compete globally in AI and digital leadership, the country must plan better, invest boldly, and treat data centres as essential public digital infrastructure. Until then, the country’s digital economy ambitions may remain unfulfilled.
This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.
