African clouds, not so big yet
Hyperscalers are promising more investments on the African Continent, but it remains a small contribution to the scale of infrastructure and service revolution that the region requires to grab a seat on the world economic stage.
AWS concluded its Johannesburg Summit last week with a juicy $1.7 billion dollar promise over the next five years to build more infrastructure and launch new cloud services. Earlier this year, Microsoft led the way with a $1 billion plan with G42 to boost the digital ecosystem in Kenya (hear, data centres and AI services), most likely to create a new MSFT region in East Africa. Google promised the same $1 billion in 2022.
While these figures and the push to bring more investment is more than welcome and necessary, we believe the region remains shortchanged and the investment rather misplaced. The data centre infrastructure deployed (and in construction) to support AI services in any large city of Europe would dwarf the combined promises above.
Companies have started to show that digital innovation can happen in Africa. However the digital ecosystem remains small. The demand for digital services is nascent, while growing. And the question is how to make this go faster. Is AI an opportunity for African developers and businesspeople to race ahead?
It is time for African governments to review their policies (regulation, tax, immigration, forex) to encourage a. the development of incubators where digital education and innovation will take place, b. the inward flow of foreign investments in the most successful start-ups, c. the expansion of these companies at the regional level, to leverage the combined demand across the Continent.
It is also time for global companies to take the leap into the Continent, with the adequate investment levels, to develop an ecosystem of services that will answer the needs of local populations and businesses. Coming with a $3.7 billion check to do it themselves is probably not the only answer. We would rather see 1 million $3,700 checks.