Africa’s digital revolution is accelerating at breakneck speed. But as connectivity demands soar, the continent faces an urgent challenge: securing the investment to expand and modernise its digital infrastructure. From remote rural villages to burgeoning urban centres, unlocking this capital will be pivotal in driving growth and digital inclusion.
Ilias Djouai, vice president of investments at Africa Finance Corporation (AFC), sat down with Capacity magazine to share his insights on investor expectations, risk appetites, and the strategies required to mobilise long-term capital.
Africa faces an enormous infrastructure gap, and this gap is most acutely felt in rural communities and the more remote parts of the continent. According to the GSMA 39% of the population live outside a mobile broadband coverage area.
Djouai, highlights two critical infrastructure components needing urgent investment: mobile telecommunications towers and fibre optic networks. Mobile towers have become a major model for expansion, leveraging shared infrastructure among telecom operators to service ‘grey and white areas’ with limited coverage.
Initially, OEMs like Nokia and Ericsson led the development of rural telecom infrastructure and continue to do so in select markets. However, as major operators such as MTN and Airtel have sold their towers to independent tower companies, the responsibility for expanding rural coverage has largely shifted to these infrastructure providers.
Traditional towercos face significant challenges in rural areas. Their standard fixed-lease, multi-tenant tower model works well in densely populated or high-demand regions but proves financially unsustainable in sparsely populated rural locations.
For example, IHS Towers constructed approximately 400 rural towers for MTN in Nigeria but reported minimal profits from these installations. In Zambia, towerco Infratel deployed about 60 towers for Zamtel, but found that lease costs exceeded revenue from active service operations.
Yet, Djouai highlights that tower companies require less regulation and lower capital outlay compared to fibre deployment as fibre cables, which offer higher capacity and reliability, are far costlier and complex to deploy. The civil works, such as digging trenches and installing cables, require licenses and advanced regulatory approval, making this a slower, more challenging process despite its equal urgency.
Over the past 13 years, investors have deployed nearly US$50 billion into African infrastructure, with a notable acceleration in the past two years. “We’ve seen a significant increase in institutional investor interest, including from players who traditionally stayed away from these sectors,” Djouai observes.
This growing confidence has led to more appetite for mature digital assets such as mobile towers and data centres. Assets that have reached profitability and are primed for larger exits through IPOs or strategic acquisitions.
Mergers and acquisitions activity is on the rise, driven by the AI wave and the increasing need for scale and efficiency. “Consolidation is inevitable because scale brings operational and economic efficiencies,” he says.
“AI is opening investors’ eyes to the exponential growth potential of digital infrastructure in Africa.”
Djouai notes a fundamental shift in capital allocation. This shift reflects a dramatic reduction in perceived risk for telecom and data centre assets and has led to intense competition for quality digital infrastructure opportunities.
“Investors are moving from low-risk debt to higher-risk equity and hybrid instruments, even taking lead roles in investments.”
Public-private partnerships and collaboration with development finance institutions (DFIs) are vital to risk mitigation, “DFIs provide concessional capital and risk-sharing mechanisms that enable private capital to enter more confidently.”
Regarding AFC’s positioning, Djouai describes a dual approach, “Sometimes we act as long-term asset holders, debt providers, or facilitators. Other times, like in the Infinity Power Project, we become operators or strategic investors.”
Unlocking the next wave of investment in Africa’s digital infrastructure hinges on more than just capital availability, it requires creating the right conditions for investment to thrive. Djouai believes there are three critical levers that African countries must pull to attract and deploy this vast pool of funding.
“The first and most important lever is the macroeconomic environment. Governments must provide stable fiscal policies, balanced budgets, and predictable currency regulations to give investors the confidence to commit capital.”
He cites Nigeria as an example where currency instability has dampened investor enthusiasm in the past. Without macro stability, even projects as stable as digital infrastructure struggle to attract equity investment.
“The second lever is regulation. Private investors need clear, consistent, and stable rules. They want transparency and predictability so they can understand risks and profitability.”
Djouai believes that regional integration is critical, “Infrastructures often span multiple countries, so harmonised economic and regulatory environments across borders are key to unlocking profitability and scaling investments.”
Over recent years, investor sentiment toward African infrastructure has seen fluctuations, driven by global shocks that sometimes push capital back toward safe havens. Djouai comments that many foreign investors view Africa as a monolithic block. But there is tremendous diversity in risk and return profiles across countries.
“Investing in South Africa differs markedly from investing in Mozambique or Zimbabwe, even if geographically close. Understanding these nuances is critical for effective capital deployment.”
He points to data centres, subsea cables, and even content providers as focal points of new investment. The burgeoning artificial intelligence (AI) sector has also caught the attention of global tech giants like Google and Nvidia, signalling massive future demand.
Earlier this year Nvidia announced its first investment on the continent, signing a groundbreaking $700 million agreement with Cassava Technologies to establish AI-ready data centres across Africa.
The initiative began with the delivery of 3,000 Nvidia GPUs to a Cassava-developed facility in South Africa. Over the next three to four years, an additional 12,000 GPUs will be rolled out in Egypt, Nigeria, Kenya, and Morocco to fuel AI advancements in sectors such as healthcare, agriculture, and financial technology.
“Africa has often had to make do with second-tier technology,” said Ziaad Suleman, CEO of Cassava Technologies SA & Botswana.
“This collaboration aims to change that narrative by bringing high-performance computing capabilities to local developers and data-centric industries.”
Djouai believes that Africa needs to reduce its reliance on external funding for infrastructure and instead tap into the vast financial resources already available within the continent.
The AFC’s State of Africa’s Infrastructure Report 2025 highlights that Africa is far from lacking capital, citing more than $4 trillion in domestic assets such as commercial banks, pension funds, remittances, and sovereign wealth funds. However, the continent has yet to effectively harness this wealth to fuel its infrastructure development.
“Africa has significant capital through pension funds, banks, and private investors, pension funds alone control over a trillion dollars.”
“The continent’s digital future is not just about technology – it’s about people, innovation, and opportunity. Investment must reflect that,” Djouai concludes.
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