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December 11, 2025
Wingu News
As 2026 approaches, East Africa's digital landscape is moving decisively beyond gradual upgrades into a phase of accelerated transformation. For years, the region has struggled with even the basic foundational infrastructure that more developed markets take for granted. Today, however, a combination of factors, from AI uptake, widespread mobile adoption to the rapid digitalisation of enterprise operations and improved power generation capacity, is drawing new levels of investment into the region.
Unlike markets where digital infrastructure has been developed over decades, East Africa is advancing through a mix of catch-up and leapfrogging. Governments, network operators, and global investors increasingly recognise that colocation, hybrid-cloud environments, and AI-ready hosting are becoming essential. The region is now tracking global infrastructure trends, albeit at a compressed pace that brings both opportunity and operational pressure. Telecom operators and infrastructure providers are investing heavily in backbone capacity, setting the stage for the next decade of digital growth.
The Infrastructure Foundation Taking Shape
Recent analysis from *Morgan Stanley's 2025 Year-Ahead Communications Infrastructure outlook reveals that networking, storage, and cooling systems continue to attract premium valuations, particularly as they form the backbone of early-stage AI deployment. East Africa reflects this shift. Kenya, for instance, is expanding its fibre-optic footprint at a pace not seen before, with national rollout plans targeting an eventual network of more than 100,000 km of terrestrial cable1, a scale that only a few years ago would have seemed out of reach.
Mobile-data generation across the region is rising just as quickly. Ericsson’s 2025 Mobility Report projects Sub-Saharan Africa’s mobile-data traffic to grow around 25–30% annually through 20302, increasing from roughly 2.3 exabytes per month in 2024 to more than 11 exabytes by the decade’s end. This surge, fuelled by smartphone penetration, expanding 4G and early 5G networks, and data-heavy services in fintech, media, and cloud applications, is pushing demand for local processing and storage infrastructure. Latency-sensitive services simply perform better when supported by nearby compute.
Power availability, however, remains a defining challenge globally, and may paradoxically become how Africa benefits in the coming decade. Across global AI infrastructure, "time to power" has become a key differentiator. While Europe and the US face constraints in providing sufficient power to meet the projected massive demand for AI factories and other large-scale data centres, East Africa's investments in mega green grid generation capacity may position the region advantageously. Kenya's installed generation capacity currently sits at roughly 3,300 MW3, with renewables making up more than 90%4 of the mix, an advantage that helps position Nairobi as a compelling location for hyperscale facilities. Tanzania and Ethiopia have made large-scale hydro investments as well, including Tanzania's Julius Nyerere Hydropower Project ($2.9 billion, 2.1 GW)5 and Ethiopia's Grand Renaissance Dam ($5 billion, 5.2 GW)6, which is transforming it's national electricity profile and creating scope for future digital infrastructure hubs in the country.
Enterprise Spending Patterns and the Rise of Colocation
Colocation is gaining momentum across East Africa as enterprises reconsider the cost and complexity of maintaining on-premises IT. Import duties on equipment, a scarcity of specialised skills, and inconsistent power supply all contribute to the shift. Morgan Stanley's research identifies AI, machine learning, cybersecurity, digital-transformation initiatives, and ERP modernisation as key demand drivers for colocation, trends that are increasingly visible across East Africa.
The 2025 CIO100 Megatrends Report highlights that cloud computing is now the most widely adopted enterprise technology across Sub-Saharan Africa, with about 61% of organisations using cloud services, while AI adoption sits near 50%7. This momentum is visible across the region's major markets. Tanzania's public cloud market is projected to reach approximately $255 million in 2026, growing at over 23% annually and expected to reach $481 million by 2029.8 Ethiopia's public cloud market is expected to grow at 26.51% annually through 2029, reaching $1.24 billion.9 Market projections from Statista suggest that Kenya's public-cloud segment alone could reach around USD 1.26 billion by the end of this year, reflecting the scale of digital transformation underway across East Africa.10
Beyond Kenya, Rwanda continues to push ahead with government-led cloud-migration initiatives, and Tanzanian banks are intensifying their use of SaaS platforms for core systems. Hybrid IT architectures, combining on-premises systems, colocated facilities, and public cloud, are becoming the default model, mirroring global enterprise patterns.
Artificial Intelligence: Catalyst and Complication
AI-related workloads present a mix of promise and complexity for regional infrastructure providers. While large-scale model training remains concentrated in established hyperscale markets, AI inference, the stage where models interact with end users, benefits from being closer to local devices and applications. Analysts expect this to be a long-term tailwind for data centres with strong interconnection ecosystems and locations in tier-one markets.
East Africa's AI adoption reflects the region's own priorities. Agriculture-focused AI tools that detect crop diseases or optimise yields are gaining traction in Kenya, Tanzania, and Ethiopia. Healthcare AI is expanding quickly as well, with Kenyan organisations such as Jacaranda Health deploying AI-powered maternal health platforms serving millions across the region11. In Tanzania, fintech companies like Tausi Africa's Manka are using AI to reduce credit assessments from approximately three hours to under 2 minutes12, while Jamborow is leveraging AI-powered services to bring financial inclusion to millions of unbanked Africans.13 Ethiopia's fintech sector is similarly advancing, with Kifiya Financial Technology deploying AI-powered infrastructure through its Michu digital loan platform14, and companies like ArifPay processing transactions exceeding 24 billion birr during its first fiscal year using AI-driven payment systems.15
These workloads require local compute with latency well below 50 milliseconds, which has encouraged mobile-network operators like Safaricom and Vodacom Tanzania to deploy edge-computing capacity at tower sites and regional hubs. The spread of Open-RAN technology, with companies such as Nokia and Samsung rolling out deployments across the region, reinforces this shift by embedding compute resources deeper into radio access networks.
Mobile Data Consumption and Ongoing Network Investment
Mobile-data consumption remains the fundamental driver behind much of East Africa’s network investment. Smartphone adoption continues to rise, while fixed broadband remains limited outside major cities. GSMA Intelligence projects mobile-internet penetration in Sub-Saharan Africa to reach 50% by 20309, with East Africa leading the growth trajectory.
This continuous increase in mobile usage demands ongoing network densification and more robust backhaul, which in turn benefits tower-infrastructure providers and fibre-network operators. The region’s tower-economics profile, characterised by growing demand, relatively low churn, and inflation-indexed escalators, remains favourable.
Power, Cooling, and Operational Realities
Data infrastructure performance in tropical climates hinges on cooling efficiency and reliable power. With average temperatures across many parts of East Africa ranging between 25°C and 30°C9, cooling becomes a ignificant operational cost. Newer facilities across urban centres increasingly use indirect-evaporative and liquid-cooling systems, achieving Power Usage Effectiveness (PUE) ratios that compare well with global benchmarks.
Backup power from diesel generators remains unavoidable. Most commercial data centre operators maintain N+1 or 2N generator redundancy, supported by robust UPS systems. Although the capital requirements are substantial, they are essential for maintaining enterprise-grade uptime. Solar-hybrid systems are becoming more common across the region, both to reduce diesel dependency and to satisfy clients prioritising sustainability and improved Scope 2 emissions performance.
Looking Toward 2026 and Beyond
As 2026 approaches, East Africa’s data-infrastructure investment outlook remains positive despite broader global uncertainty. Demand drivers: rising data generation, ongoing enterprise digitalisation, growing mobile connectivity, and increasingly sophisticated AI workloads, show no sign of slowing. Investors focused on emerging markets continue to view high-quality digital infrastructure in East Africa as offering attractive risk-adjusted returns.
Competition is also evolving. Beyond traditional telecom operators, specialist data-centre firms, tower companies, and subsea-cable consortia are expanding their presence. This growing specialisation attracts targeted investment and increases the pace and quality of infrastructure buildout. Regulatory frameworks across the region continue to evolve, with many governments introducing measures that streamline permitting, encourage investment, and clarify data-governance requirements.
East Africa is moving from an era of connectivity scarcity into one of digital possibility, a transformation that took decades in more mature markets. For investors and operators able to navigate the region’s operational and regulatory complexities, the opportunity is significant. For local economies and societies, the impact of this transition will shape the region’s digital trajectory well into the next decade.
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*Sources: Morgan Stanley Research (2025), "Year-Ahead Outlook | Communications Infrastructure – Where Will AI and Data Growth Deliver?
