Africa’s $136 billion AI alternative hinges on cross-border information

Synthetic intelligence (AI) might add as a lot as $136 billion in productiveness positive aspects throughout Africa, in response to Microsoft. Unlocking that worth, nevertheless, depends upon whether or not international locations can allow the safe, seamless stream of information throughout their borders.

“We solely have about 1percentor 2% of worldwide compute energy in Africa,” Akua Gyekye, Authorities Affairs Director for Microsoft Africa, advised TechCabal in an interview on Wednesday.“If we’re severe about diffusing AI throughout the continent, we want infrastructure. However we additionally want the best coverage atmosphere.”

AI methods demand monumental computing energy, but Africa controls lower than 1% of worldwide capability. With restricted entry to hyperscale infrastructure, researchers, startups, and governments battle to deploy superior AI instruments at scale.

In response, African governments have repeatedly known as on international cloud suppliers reminiscent of Microsoft to construct native information centres. As of mid-2025, Africa has 223 information centres throughout 38 international locations, lower than 0.02% of the world’s whole of greater than 11,800. 

Microsoft was the primary massive-scale cloud operator to launch native information centres in Africa (2019). These are organised into two main areas: South Africa North (Johannesburg) and South Africa West (Cape City). 

However Gyekye argues {that a} purely nationwide strategy will not be economically viable or strategically sound.

“A regional strategy typically makes extra sense,” she mentioned. “In the event you construct an information centre in Nigeria, how can the remainder of West Africa profit? In the event you construct in South Africa, how do neighbouring international locations plug in?”

Microsoft’s current South African cloud areas already serve prospects throughout Southern Africa, elevating a broader coverage query on whether or not different African international locations permit their residents’ information to reside in neighbouring jurisdictions whereas nonetheless imposing their very own data-protection legal guidelines. 

That’s the place the dialog shifts from infrastructure to sovereignty.

Knowledge sovereignty vs. information silos

Over the previous decade, Africa has seen a speedy surge in data-protection regulation. In 2012, solely 12 international locations had data-protection legal guidelines; at the very least 46 have now enacted laws or regulatory frameworks, and greater than 40 now function devoted Knowledge Safety Authorities. The African Union’s Conference on Cyber Safety and Private Knowledge Safety, which got here into pressure in 2023, has helped pace up alignment efforts throughout regional blocs.

Enforcement has additionally intensified. Regulators in international locations reminiscent of Nigeria, South Africa and Kenya are issuing file fines and, in some circumstances, prison penalties for violations. 

In July 2024, the Federal Competitors and Client Safety Fee (FCCPC), in a landmark joint motion with the Nigeria Knowledge Safety Fee, fined Meta $220 million for “intrusive” information practices, unauthorised information sharing, and abusing its market dominance. 

In late 2023 and once more in 2025, Kenya’s Workplace of the Knowledge Safety Commissioner (ODPC) fined a number of digital lenders between KES 2 million ($15,500) and KES 5 million ($38,760) for “shaming” debtors by contacting their telephone contacts with out permission.

But Gyekye warned that well-intentioned sovereignty insurance policies can create information silos.

“Some governments really feel information is most secure when it’s bodily inside their borders,” she mentioned. “However cybersecurity threats don’t respect borders. In lots of circumstances, cloud suppliers can provide larger ranges of safety than native internet hosting.”

The difficulty, she argued, isn’t about weakening sovereignty however about modernising it. If a rustic’s legal guidelines can journey with its information, enforced by way of contractual, technical and regulatory safeguards, then bodily location turns into much less important.

In Ethiopia,  strict localisation necessities mandate that sure information be saved on native servers. Whereas such measures purpose to guard residents, additionally they complicate regional growth for banks, fintech startups and e-commerce corporations in search of to scale throughout East Africa. 

Safaricom’s growth into Ethiopia illustrates how differing nationwide information guidelines complicate the “super-app” mannequin. To launch M-Pesa, the corporate needed to adjust to Ethiopia’s strict native data-processing necessities, totally different from the provisions of Kenya’s Knowledge Safety Act of 2019.

“Knowledge silos don’t simply have an effect on Microsoft,” Gyekye famous. “They impression regional banks, small and medium enterprises, and startups that purpose to broaden past a single market.”

The African Continental Free Commerce Space (AfCFTA) is designed to advertise cross-border collaboration, with the African Union estimating it might enhance intra-African commerce by over 50%. But, digital commerce, funds, logistics, e-commerce, and AI-driven providers all depend upon the seamless motion of information throughout borders.

“With out cross-border information collaboration, the promise of AfCFTA can’t be absolutely realised,” Gyekye mentioned.

She argued that harmonisation doesn’t require an identical legal guidelines throughout all 54 international locations. As a substitute, interoperability and mutual recognition frameworks might permit information to stream securely between jurisdictions with comparable requirements.

“There isn’t a one-size-fits-all mannequin,” she mentioned. “Nations can preserve their sovereignty and self-determination. However there should be pathways for information to maneuver.”

The sovereign cloud mannequin

To bridge the hole between sovereignty and scale, Microsoft is advocating a “sovereign cloud” mannequin, which permits information to be hosted outdoors a rustic’s bodily borders whereas remaining topic to that nation’s legal guidelines and regulatory controls.

In apply, this typically entails encryption safeguards, native key administration, strict entry controls, and contractual ensures guaranteeing that solely authorised entities can entry delicate info. For instance, a serious South African tier-one financial institution reminiscent of Normal Financial institution or FirstRand could run large-scale information workloads on Microsoft Azure whereas counting on Thales CipherTrust to handle encryption keys domestically.

“The query turns into: who holds the keys?” Gyekye explains. “Not Microsoft. The shopper or the federal government.”

The strategy displays a broader business pattern towards modular cloud architectures. Delicate private information could stay domestically saved, whereas anonymised or aggregated information may be processed regionally or globally for analytics and AI coaching. 

Amazon Internet Companies (AWS) makes use of a modular strategy known as AWS Outposts, which brings cloud {hardware} into the shopper’s information centre. In January 2026, AWS introduced the growth of its 2nd-generation Outposts racks to Nigeria, Morocco, and Senegal.

For policymakers, the mannequin gives a compromise: preserve authorized oversight whereas accessing bigger swimming pools of compute energy.

Nonetheless, Gyekye insists that infrastructure alone is not going to unlock Africa’s AI dividend.

Microsoft’s technique on the continent additionally focuses closely on abilities growth and connectivity. By means of its Airband initiative, a worldwide program aimed toward increasing web entry to underserved and rural communities, the tech big says it has related greater than 117 million Africans to broadband, surpassing its preliminary targets. It’s also investing in AI skilling programmes for college kids, builders and policymakers.

“Expertise is only a instrument,” she mentioned. “If folks don’t know easy methods to use it, or don’t belief it, the financial advantages gained’t materialise.”

Language accessibility stays a major barrier to AI adoption. On February 4, 2026, Microsoft unveiled expanded AI capabilities in 39 African languages by way of Paza—Swahili for “to undertaking” or “to lift your voice.” The initiative goals to shut the “AI divide” by guaranteeing that AI instruments are domestically related and usable.

“If AI doesn’t converse your language, you gained’t use it,” Gyekye famous.

Huge Tech and the African company

Considerations stay that the deep involvement of worldwide expertise corporations might weaken African digital sovereignty. A lot of this fear stems from the facility imbalance between trillion-dollar multinational firms and creating digital economies. 

The U.S. CLOUD Act permits American authorities to compel U.S.-based tech firms at hand over information they management, even when that information is saved overseas. In apply, this implies a Nigerian citizen’s info held in a Lagos information centre operated by a U.S. agency might, in idea, be accessed by Washington with out the Nigerian authorities’s approval.

Gyekye acknowledges the priority however emphasises multi-stakeholder governance.

When Kenya launched its nationwide AI technique in  March 2025 on the Kenyatta Worldwide Conference Centre in Nairobi, she mentioned, it invited native startups, researchers, civil society teams and worldwide firms, together with Microsoft, to the decision-making course of the place these teams helped outline the six key pillars of the technique.

“You may’t regulate what you don’t perceive,” she mentioned. “Governments should lead, however they want enter from business, academia and civil society.”

In her view, it’s African governments, fairly than overseas corporations, that should set the course as a result of they’ve the deepest understanding of how these selections have an effect on their folks.

“It needs to be government-led,” she mentioned. “Solely governments know the precise priorities of their residents.”

The $136 billion query

If Africa can align infrastructure, governance and abilities, Microsoft’s estimate of $136 billion in productiveness positive aspects could show conservative. AI purposes in agriculture, healthcare, logistics and schooling might dramatically enhance effectivity and inclusion.

Think about satellite tv for pc information serving to farmers predict crop yields throughout East Africa. Or AI-powered diagnostics supporting overstretched rural clinics. Or cross-border fintech platforms scaling seamlessly below AfCFTA guidelines.

But when restrictive information localisation guidelines proliferate with out interoperability mechanisms, the continent dangers fragmentation. The consequence could possibly be duplicated infrastructure, larger prices and slower innovation.

For Gyekye, success would imply eradicating pointless information silos whereas respecting nationwide sovereignty.

“Knowledge can stream, preserving sovereignty high of thoughts,” she mentioned. “That’s how we construct digital economies that profit everybody, from small companies to multinationals, from policymakers to the person on the road.”