South Africa’s burgeoning data centre industry yesterday received presidential backing, with Cyril Ramaphosa saying the country is now a “reservoir” for data centres.
Ramaphosa delivered the 2025 State of the Nation Address (SONA) last night, before a joint sitting of the two houses of Parliament – the National Assembly and National Council of Provinces – marking the first SONA of the seventh term of Parliament.
While characterised by issues of geopolitics, SA’s home affairs and a lot more focus on technology than previous times, the president’s speech pointed to the country’s strong growth sectors and where opportunities exist.
After highlighting gains in the tourism sector, Ramaphosa added: “We have seen strong growth in digital services and business process outsourcing…as well as data centres.
“As the need for data grows in the world, our country is seen as a reservoir of data centres and this is continuing to create jobs for young people. To support this growth, we are investing in skills development for the industries of the future.”
With over 100 data centres in Africa as of 2023, the data centre industry is said to present infinite economic opportunities and is set to become the backbone of the continent’s digital economy.
While there have been different levels of data centre activity over the last five years in key African markets, South Africa is the largest market on the continent, as hyperscalers and data centre operators continue to establish cloud regions.
The Southern African nation has seen data centre operators − such as Africa Data Centres, Open Access Data Centres, Teraco (Digital Realty), Microsoft, Amazon Web Services, Equinix and Vantage Data Centres − make sizeable investments in this space.
The country is considered a ‘sweet spot’ for operators due to several factors, including the growing cloud market and digital economy.
The increased use of cloud computing and digital technologies − such as artificial intelligence and big data − by local businesses is also leading to high demand for co-location and data storage services offered by data centres.
According to Arizton Advisory & Intelligence, SA’s data centre market was valued at $2.28 billion in 2023 and is expected to garner investment of $3.70 billion by 2029 – growing at a compound annual growth rate of 8.44% during the forecast period.
Economic green shoots
To spur job creation, SA must take advantage of the potential to build industries of the future, added the president. This includes green manufacturing, renewable energy, electric vehicles and the digital economy that is driven by artificial intelligence.
“This year, we will finalise a modernised and comprehensive industrial policy that drives economic growth. We will achieve this ambition by focusing on the opportunities in localisation, diversification, digitisation and decarbonisation.
“As the most industrialised economy in Africa, we are positioning ourselves to be at the centre of this new and growing market.
“We are harnessing the sun and the wind to make our country a leader in renewable energy and green manufacturing.
“With an abundance of cheap, green energy, we can produce products that are competitive anywhere in the world and create hundreds of thousands of new jobs in the process.”
The Jobs Boost fund, he said, has pioneered a new model that links funding for skills in demand to the successful placement and employment of young people.
“We are expanding our support for small and medium enterprises and for the informal economy, which sustains millions of jobs and livelihoods across our country. This includes streamlining funding for small businesses, unlocking venture capital for high-growth start-ups, and developing a regulatory environment that enables rather than restricts informal enterprises.”
He noted that to build an innovative economy, the Department of Science, Technology and Innovation will establish an innovation fund to provide venture capital to tech start-ups that emerge from higher education institutions.
“We are calling on business to use the SA Youth.mobi platform, which has some 4.5 million young people registered, for their hiring.
“We are calling on business to support the Youth Employment Service and to scale-up workplace experience opportunities over the coming year.”
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