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Comment by Danieru | Hacker News Reader

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.

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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.

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