Rack Centre CEO: About 70% of Nigeria’s announced data centre investments will materialise

Nigeria’s data centre market has attracted more than $1 billion in announced investments, as global technology companies and infrastructure investors seek to tap growing demand for cloud computing, artificial intelligence, digital services and data storage. Lars Johannisson, CEO of Rack Centre, said roughly 70% of those announcements are likely to become reality, though timing remains uncertain.

Johannisson said the Central Bank of Nigeria’s directive requiring banks, fintechs and other regulated financial institutions to store and manage critical payment transaction data within the country from January 2027 is expected to create additional demand for local capacity.

Why investors are looking at Nigeria

He said investor appetite is driven by Nigeria’s improved policymaking, falling inflation and FX stability, after years of volatility and insecurity that added a risk premium to investments. He described Nigeria as the growth engine of West Africa and sub-Saharan Africa, adding that the industry has provided some tranquillity and predictability.

On conversion of announcements, Johannisson said: “roughly speaking, maybe 70% of what is announced actually will be materialized.” He added that some projects are often deferred over time, but the volume of announcements shows interest from different players.

Capacity, competition and Rack Centre’s plans

The interviewer put Rack Centre’s live IT capacity at about 13 megawatts, while Johannisson said the company has deployed just 12 megawatts. He said some market estimates put Nigeria’s IT capacity at about 60 megawatts, with the real IT load at about half of that. He projected a compound annual growth rate of about 24.25%, bringing another 220 megawatts by 2032.

On competition, Johannisson said extra supply is not entirely bad. He warned that a massive influx of supply from contenders without an existing ecosystem or organic customer growth could cause price erosion in the mid-to-long term. Rack Centre, he said, sits on an existing install base and client relationships and would stand firm if price erosion occurs.

He said Rack Centre has been a single-asset company with the prime data centre in Nigeria. Its short-term plan is to execute its existing facility installed base and an AI hyperscale-ready facility, building out each batch as clients come in. By 2029, he expects to decide where Lagos 3 will be placed. Lagos 1 is full, while Lagos 2 is tracking well.

What it means for the market

The CBN deadline could deepen demand for local data centre capacity. The pace at which announced projects become operational will determine how quickly Nigeria can serve banks, fintechs, cloud providers and AI customers from domestic facilities.