By Dennis Agaba
Africa has worn many labels over the past two decades—from “The Hopeless Continent” in 2000, to “Africa Rising” a decade later, and the more cautious “Aspiring Africa” by 2013. Each label reflected the continent’s promise, and investors often bet heavily on that potential, particularly in technology, fintech, and telecoms. But in many cases, ambition raced ahead of the fundamentals.
Today, Africa is trading like a distressed asset in some respects: talent continues to leave, political leadership is pulled in multiple directions, and investor confidence has thinned. Yet, beneath the surface, a reset is quietly taking shape. This recovery isn’t driven by optimism alone—it is grounded in reform, policy adjustments, and the slow rebuilding of macroeconomic credibility.
The Importance of Digital Infrastructure
For Africa’s digital economy—data centers, cloud services, connectivity, power, and compute—the stakes are high. Credibility and access to capital determine whether projects get built, connected, and actually used. Governments continue to announce broadband plans, cloud strategies, data-localisation policies, and AI roadmaps, but execution has historically been the bottleneck. Capital-intensive projects that require coordination across power, connectivity, and regulatory frameworks often stall.
Some signs of improvement are emerging. Foreign-exchange reserves in reform-oriented economies are rebuilding: Nigeria’s reserves hover around $46 billion, Egypt’s exceed $50 billion, and Ghana’s have more than doubled since its crisis. Stabilizing currencies and easing inflation allow central banks to cut rates, reopening external market access—crucial for long-cycle infrastructure projects like fiber networks and data centers.
However, connectivity alone does not create a digital economy. Subsea cables like Meta-backed 2Africa lower data transport costs but do not determine where data is processed, stored, or monetized. Without local data centers, cloud platforms, and interconnection points, Africa risks remaining a transit corridor rather than a platform for digital growth.
Gains from Disciplined Reforms
Nigeria’s strengthening foreign reserves help lower equipment import costs and reduce contract risks, slowly restoring investability for long-term digital infrastructure, even as fiscal execution remains a key challenge. Egypt, long valued for its scale, is becoming investable again thanks to restored FX liquidity and predictable exchange rates. Morocco complements this by connecting Europe, West Africa, and francophone markets through disciplined policy and strong reserves.
Karim Amer, head of Nokia’s IP business for North, West, and Central Africa, expects North Africa to lead the next wave of investment: “By 2030, Egypt will account for roughly 25% of Africa’s total data center capacity, Morocco 15%, and Nigeria around 9%. Growth depends on energy reliability, cross-border regulation, and policy openness.”
Ghana demonstrates what disciplined reform can achieve: stable currency, low inflation, and renewed investor confidence have shifted infrastructure financing from survival mode to long-term planning. South Africa remains a core anchor market with strong institutional depth, capital markets, and regulatory continuity. Kenya continues to serve as East Africa’s digital gateway, thanks to regional connectivity and enterprise demand.
Conversely, countries with fragile fiscal credibility, such as Angola and Senegal, face higher capital costs. For power-intensive assets like data centers, macroeconomic instability translates directly into delays, underinvestment, and missed opportunities.
Remaining Challenges
Africa’s macro recovery is only part of the story. Long-term success depends on strong institutional foundations. Local capital—pension funds, sovereign wealth, and insurance pools—remains largely absent from long-term infrastructure financing, leaving foreign investors to carry most of the risk. Heavy reliance on external policy advisors can misalign initiatives with local realities, while domestic talent continues to leave just as institutional capacity is needed most.
Economist Axelle Kabou noted decades ago that Africa’s development failures are rooted less in external forces and more in internal choices: weak governance, poor accountability, and elite incentives that perpetuate underdevelopment. The same lessons hold for digital infrastructure today: success requires credible policy, patient capital, and institutions capable of execution.
A Window of Opportunity
Entering 2026, Africa faces a pivotal moment. Capital will flow where credibility, coordination, and execution are visible. As the Nigerian proverb says, “When the wind blows, what was hidden is revealed.” The year ahead will expose which reforms are real and which ambitions are built on fragile ground.
For investors and builders willing to engage with discipline, the next phase offers a chance to turn ambition into tangible assets—and transform cyclical recovery into a lasting digital infrastructure foundation across the continent.
