Ghana’s Digital Economy & the Impact of Data Centres
The global digital economy is valued at USD11.5trillion, equating to 15.5% of the world’s GDP; set to increase to 25% in less than a decade[1]. Africa’s slice of this digital pie is also on the move- expected to reach USD300billion by 2025[2]. The government of Ghana’s commitment to propelling Ghana – which has the second highest mobile internet penetration rate in West Africa at 45%[3]- into a modern digital economy by 2023 is confidently articulated through its Digital Financial Services Policy (2020-2023) and its National Financial Inclusion Development Strategy (2017-2023)[4]. Meanwhile, the private sector is responding with a flurry of vibrant activity and the opening of a new data centre will accelerate activity in Ghana’s digital tech ecosystem in various ways. Here are four:
1. Deeper roots for tech giants.
MainOne’s opening up of a new data centre this year in Appolonia City, Oyibi, is Ghana’s fifth and biggest data centre, which provides a commercial solution to data storage. Customers are offered co-location services and open access connectivity options to Ghana’s leading telecom operators. It means that the likes of Google, Microsoft and Facebook which already have a presence in Ghana are likely to expand their operations in Ghana, a digital technology executive tells us. “These companies want to get as close to the customer as possible… but you need qualified data centre environments [which] won’t go down”, confidence which the new data centre would provide.
2. Microsoft Azure launch.
The recent launch of Microsoft Azure’s cloud infrastructure in Ghana by MDXi, subsidiary of Nigeria’s leading broadband infrastructure firm, MainOne, means cloud services are coming closer to home. This means faster internet speeds. Ghanais ranked 110 out of 189 economies when it comes to its broadband speeds, averaging 2.3Mbps, far less than Kenya’s 10.71 Mbps (51stglobally)[5]. By way of global benchmarking, the UK’s communications regulator, Ofcom, says that for consumers to engage meaningfully in the digital economy, broadband speed should be at least 10 Mbps[6].
3. Subscription videos on demand, in demand.
On demand subscription content platforms – Ghanaian, African or international – are likely patronisers of the data centres, enabling them to tap into the connections afforded by Ghana’s leading telco operators such as MTN and Vodafone. For the consumer this means faster streaming and no buffering, and for the companies this means wider access to a content-hungry target market. The projected over the top revenue for tv and video for Sub Saharan Africa in 2021 is USD467m[7].
4. Data protection.
As the digital economy is stimulated, so too is the need for data protection. Ghana’s data protection act first emerged in 2012 but was officially launched in 2014 and in 2018 a Cyber Security Centre was established to crack down on cybercrime. The expansion of data centres in Ghana and localized cloud solutions are part of the digital privacy solution. Government and local businesses, particularly the banking sector, support the idea of keeping data onshore, rather than storing data in the US or Europe for instance. Typically, banks store sensitive customer data in a server room but with the emergence of data centres, we will start seeing banks taking up hosting space.
Outlook - Such a time as this.
The increase in data storage will be a magnet for businesses which want to outsource the management of data security safely. It will also open doors to local and international content producers who seek to get closer to the consumer. To run, data centres require significant and reliable power supply to avoid machine damage and systems breaches. While Ghana’s power supply is relatively stable at present, dumsor has hampered business activity in the past, although investments in power infrastructure appears to be bearing fruit. In achieving ambitious targets mapped out by government to bring the entire population into the digital economy by 2023, more work is required to fill the skills gap and we expect to see incubators, accelerators and other support organisations taking a key role here. There is also work to be done on widespread sensitization such that public and private sector actors have a better understanding of data security rights and obligations.
*Photo by Joshua Sortino on Unsplash
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[1]https://thedocs.worldbank.org/en/doc/412821598381054828-0090022020/original/GhanaDE4ALOWRes.pdf
[2]Ibid.
[3]After Cape Verde. https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2020/05/Ghana-Country-Overview.pdf
[4]https://www.mofep.gov.gh/sites/default/files/acts/Ghana_DFS_Policy.pdf
[5]https://thedocs.worldbank.org/en/doc/412821598381054828-0090022020/original/GhanaDE4ALOWRes.pdf
[6]https://www.ofcom.org.uk/__data/assets/pdf_file/0028/95581/final-report.pdf
[7]https://www.statista.com/topics/5032/media-in-africa/