Nigeria is building more data centres, but power and water could decide who survives

Nigeria's rapidly expanding data centre market is set to become the backbone of West Africa's digital economy, with growth projected to more than double from US$374.15 million in 2026 to US$782.82 million by 2031. However, the industry faces significant challenges due to rising energy costs, water scarcity, and the need for sustainable, resilient engineering.

The Nigerian Communications Commission's data localisation directive has created a demand certainty for data storage, but operators must now focus on building facilities that are efficient, reliable, and sustainable in one of the world's most energy-constrained environments. With power and water costs accounting for more than 35% of operating expenditure, energy efficiency and water usage effectiveness have become critical factors in the success of data centre operations.

The convergence of rising energy costs, water scarcity, and AI-driven computing density has transformed data centres from mere containers for technology into strategic infrastructure assets. Resilient engineering, including floor loading, cooling architecture, and material selection, is now a capital investment decision that will influence operating costs, financing, insurance, regulatory compliance, and long-term asset value.

Operators must now consider six investment questions to ensure their data centres remain profitable and competitive in the next decade.