South Africa’s National Treasury plans to accelerate data centre growth and strengthen the country’s position as a digital infrastructure hub for the continent.
Finance Minister Enoch Godongwana said the government now views data infrastructure as essential to the economy, comparing it to electricity, ports, and transport networks.
“The use of data and artificial intelligence has become critical for the future development of economies worldwide,” Godongwana said in his 2026 budget speech on Wednesday. “Data infrastructure should be considered as critical as electricity, ports and transport networks.”
The minister added that the National Treasury would explore options to help data centres and related infrastructure expand, reinforcing South Africa’s role as a regional hub for cloud and AI technologies.
The move comes as governments around the world pour capital into AI-era infrastructure. More than $1 trillion is expected to be invested into hyperscale and data-centre capacity globally by 2027, with trillions more likely by 2030. South Africa is positioning itself to capture a meaningful share of that growth.
The country already hosts over 50 operating data centres and has a combined investment pipeline worth roughly R50 billion (about $2.7 billion) over the next three years, concentrated around Johannesburg and Cape Town.
Microsoft has committed an additional R5.4 billion ($340 million) to expand its AI-ready capacity, adding to its previous R20 billion ($1.1 billion) Azure spend. Google has launched its first African cloud region in Johannesburg, while Amazon Web Services continues to scale its Cape Town hyperscale region.
Teraco is building four new facilities backed by almost $900 million, and Vantage Data Centres is investing about $1 billion in a new campus at Waterfall in Midrand.
At the centre of this build-out sits Teraco’s Isando campus, which runs at an IT load of roughly 70 megawatts. Although small compared with the gigawatt-scale AI campuses emerging in the United States, Isando remains the largest data-centre complex on the African continent.
After years of rapid greenfield development, South Africa’s data-centre sector is entering a new phase of consolidation. Open Access Data Centres, a subsidiary of the WIOCC Group, recently acquired seven NTT Data facilities, an early sign of a race for scale and regional footprint. Hyperscale providers now prefer larger, standardised partners capable of delivering consistent performance across multiple geographies.
While the National Treasury has not formally classified data centres as “critical infrastructure” under the Critical Infrastructure Protection Act, its new language places them alongside energy and manufacturing in policy discussions, marking a clear shift in how the government views their economic importance.
This could open the door to a suite of incentives that could include lower tax rates for qualifying investments, accelerated depreciation for plant and equipment, value-added tax relief for imported servers and power gear, and faster grid connections supported by renewable energy wheeling.
Of these potential measures, electricity access remains the most important. Industry executives point out that supply constraints continue to limit growth and raise operating costs, making reliable and affordable power the decisive factor in future data-centre expansion.
Sakhile Dube
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