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Cost of financing is also a big one.

Poor countries have less capital. Thus the cost of money is high. For example in Uganda a bank loan costs 20% interest. At such rates only the most effective investments are viable.

Many countries in Africa have such large room for improvement through investment. Data centers are not the biggest need. For example in Uganda they grow avocado's, but lack the cold chain distribution network to sell into the international market.

Thus you have avocado's selling for peanuts at local markets instead of earning big money selling to the west.

Building up a nation's capital stock takes time and long term stability. Thankfully Africa has the stability but time is slow.

in Uganda they grow avocado's, but lack the cold chain distribution network to sell into the international market.

Let's do 5 Whys with this? Basically, that means the industry can't reliably truck or otherwise ship refrigerated produce to the ports of Mombasa and Dar es Salaam. Why? I'm going to guess that the road infrastructure is too poor to support refrigerated trucks. Why?

I think it is worth noting that historically, land-locked countries tend to be less well-off than its counter parts. Examples such as Switzerland & Austria are an abnormality due to a variety of unique factors that have only occurred in Europe so far.

Overall, the rule of law, regulatory environment and open market of Uganda and its neighbors are not at the level needed to to maximize its potential. This, coupled with the cost of borrowing (think interest rate), asset risk (E.g, forfeiture, robbery, piracy) and a few key negative economic indicators (Major balance of trade, current account & gov budget deficit) can put a dent in a country's mid-long term success.

Even if we consider earlier history as irrelevant, it's worth looking at the differences of industrialization and wealth in coastal China vs inland China, as many of the industries driving Chinese economy heavily rely on low cost sea import and export.

The Chinese have a penchant for building roads. I guess the cost of investment in roads, equipment, and security is too high for the profit potential?

5 whys? How about '50 whys'?

- road network unreliable - theft of property along road - electricity unreliable - workers may or may not show up - bribes for transport, bribes for regulatory checks - unreliable access to credit - unreliable access to mechanics for truck, equipment - unreliable commercial and regulatory structures - unstable political climate - unreliable export/import laws - unreliable transport partners - unreliable internet - unreliable water source - excessive weather risk - unpredictable demand - unreliable payments from customers - payments delayed by snafus in credit/financial system - lack of appropriate insurance products

etc. etc. etc.

'Lack of data centres' in Africa is more likely a symptom, not a cause of anything.

Having access to high quality, well run data centres is actually a positive thing for Africa, since that is just a little higher up on the value chain than maybe some places can handle.

Once other things are in place, Africa can make all the data centres they need, but I'd argue that this is just an optimization. I don't see a hugely material issue with not having data locally.

Not everything is cheaper in a poorer country. Sometimes things are even more expensive there because they're uncommon.

Including a skilled workforce, I would assume (relative to the local average).

Security. Both personal, and that things tend to get stolen.

One reason cell phones are so big in the poor world is that you can't leave cables lying around there.

Logistics infrastructure is one major cost factor. To get a data center up and running requires moving large quantities of heavy, high-value, and relatively fragile equipment through ocean ports and over roads and/or railroads. In regions of the world with less quality infrastructure, it's significantly more expensive to transport that stuff.

How about datacenter ships sitting in ports, or even moored offshore? Would an operational Starlink make these viable?

EDIT: PDF map of ports in Africa

https://www.pwc.co.za/en/assets/pdf/large-map.pdf

Container ships have internet via satellite today but they use it only when absolutely necessary because it's very slow and expensive. If and when the cost and bandwidth of satellite internet fall to within parameters that make it competitive with fiber optic cable, perhaps.

Microsoft and others are also testing miniature undersea data centers, and using seawater for cooling could help address air conditioning costs: https://news.microsoft.com/features/under-the-sea-microsoft-...

If and when the cost and bandwidth of satellite internet fall to within parameters that make it competitive with fiber optic cable, perhaps.

So maybe not with Starlink, but a bit afterwards?

Any extra African data centers would be located in the major coastal metropolises, which are already connected with the major undersea cables. Sure, it's logistically difficult to ship stuff to inland rural Africa, but delivering equipment from Shenzhen to Lagos or Mombasa is not much more expensive as delivering it to London or LA.

Sure, but building a data center in a metropolis can be a lot more expensive than building it in a rural area because of other factors like higher land values, taxes, energy costs, etc.

The ocean freight for Shenzhen to Lagos probably costs 2-3x more than Shenzhen to Los Angeles, but ocean freight alone is still a tiny fraction of the total landed cost of the data center.

>It's not obvious to me why in Africa these costs would be higher than in Europe, but apparently there's some reason.

Physical security and security of investment (via security of government, infrastructure, judicial systems, pipeline of educated and skilled workers) is worth a lot.

Power. Reliable power is hard to come by and is more expensive. Power availability and cost is a significant factor in data center location in the states.

Not to mention heat management.

There are plenty of data centers and related infrastructure in warm places outside of Africa: https://en.wikipedia.org/wiki/One_Wilshire

How hot do you think DTLA gets with regularity? People don't consider LA to have among the best weather in the world because it's hot, they do so because it's temperate. The record temperatures for the hottest months are well up there, but the averages are pretty comfortable. Obviously data centers have different senses of "comfortable temperatures" than humans do, but the challenge is proportionally larger when temperatures are much higher.

That being said, I'm not sure the GP complaint is that significant. Africa is a BIG continent, and data centers locations would obviously be chosen in areas that are relatively more temperate.

Humidity is a bigger factor than temperature. 90 degrees on the west coast is nice because it's not humid, 90 degrees in Southeast USA is unbearable because it's 90% humidity.

https://www.weather.gov/safety/heat-index

https://en.wikipedia.org/wiki/Climate_of_Los_Angeles#Summer

>However, temperatures across the region often exceed 90 °F (32 °C) during the summer. This happens when an atmospheric high-pressure area becomes dominant over the Great Basin of Nevada and Utah (a frequent occurrence), and the resulting offshore flow of the atmospheric air mass shuts off the normal coastal sea breeze in Los Angeles.

I don't see reliable power as a big differentiator since even in the first world your data center anyway needs backup generators; it's just that they would get used much more often.

Generators have several costs.

1. Fixed costs 2. Maintenance costs 3. Operating costs

#2 and #3 are lower for a generator you run 8 hours a year versus 800 hours a year. And you may want added redundancy for your generator capacity if you plan to run off generator power frequently, so #1 can be higher too.

(I broke out maintenance costs from operating costs since there's fixed maintenance costs even if you never run the generator, and there's variable maintenance costs based on the number of hours you run it)

It's been a long time since I've rented coloc space, but at the time, the cost of the power drops to the cage cost more than the space itself. Conditioned reliable power is expensive.