How CWG escaped the hardware squeeze and built a digital infrastructure engine

CWG is beginning to reap the full benefits of a business transformation launched more than a decade ago, with strong growth in its IT Infrastructure Services business emerging as a major driver of its H1 2026 performance.

The company said the 142 percent growth recorded in its IT Infrastructure Services line in the first half of 2026 was the result of deliberate strategic positioning and investments made over several years, rather than a one-off windfall.

CWG’s transformation dates back to 2009, when the company embarked on a private placement ahead of its eventual listing on the Nigerian Exchange. Vetiva Capital valued the company at N6.97 billion ($50 million) at the time, while the offer was oversubscribed, with private equity firm Aureos Capital LLC taking a major stake despite the global economic recession.

The company subsequently listed on the stock exchange on November 15, 2013, at N5.48 per share, nearly twice its 2009 private placement price of N3.40, giving it a valuation of about $90 million.

However, the listing came at a turning point for the business. Although CWG recorded a turnover of N20 billion in 2013, profit before tax stood at N613 million, representing a margin of only 3.1 percent.

CWG said the performance exposed the limitations of its traditional hardware-led business model, which had become increasingly fragmented as competition intensified and margins narrowed.

“It was clear to us that the business model that had brought us thus far would be inadequate to take us into the future. The hardware business had run its course, becoming very fragmented with many new entrants and shrinking margins,” the company said.

That realisation triggered what the company described as its “CWG 2.0” transformation, shifting the business towards cloud computing and a subscription-based service model.

“There was a need for a major transformation in the business model, and that is precisely what we did. We unveiled a new direction for the company, tagged CWG 2.0,” the company said.

The new strategy sought to position CWG as an IT utility enabler in Africa while combining upfront revenues with recurring income. As part of the transformation, the company launched a Tier 3 data centre designed to support its own cloud services while providing excess capacity to enterprises, particularly banks requiring disaster recovery and colocation services.

The strategy has translated into a significant improvement in profitability. CWG said its profit-before-tax margin doubled to 6.5 percent in 2019 and continued climbing to 12.2 percent in 2025. Revenue reached N65.5 billion last year, while profit before tax stood at N8.01 billion.

Over the 12 years between 2013 and 2025, absolute profit before tax increased more than 13-fold, from N613 million to N8.01 billion, while the PBT margin expanded nearly fourfold from 3.1 percent to 12.2 percent.

Infrastructure emerges as new growth engine
The company’s H1 2026 performance suggests that infrastructure has become a critical pillar of the transformed business.

CWG attributed the 142 percent expansion in IT Infrastructure Services to investments in delivery capacity, professional certifications and an expanded global footprint, which have enabled it to execute large-scale technology programmes for public-sector institutions, telecommunications companies and financial services institutions.

“The 142 percent growth in our IT Infrastructure Services line is the outcome of deliberate strategic positioning, not a one-off windfall,” CWG said. “Infrastructure is the bedrock of digital innovation.”

The company said the investments made over several quarters are now converting into commercial outcomes, particularly through large-scale projects across key sectors of the economy.

Beyond individual contracts, CWG sees a broader structural shift in demand for digital infrastructure across Africa.

The rapid adoption of cloud computing, streaming services, smartphones and mobile money, combined with population growth and urbanisation, is increasing demand for computing capacity, data storage, and connectivity.

At the same time, data localisation and sovereignty requirements are pushing financial institutions, governments and other organisations to host sensitive information locally. National cloud policies are also encouraging public-sector migration and supporting the development of local data-centre capacity.

CWG believes the trend towards sovereign cloud infrastructure could become a long-term growth opportunity.

“Nations and large enterprises alike are pushing for sovereign cloud capabilities to guarantee data privacy, security, and economic ownership,” the company said.

The company also pointed to the growing need for reliable power and resilience infrastructure to protect digital investments, particularly in markets such as Nigeria and Ghana.

According to CWG, its own data-centre capacity has expanded by more than 400 percent over the past 12 months, driven by demand for infrastructure, security and operational efficiency.

From infrastructure to recurring digital revenue

CWG’s strategy, however, extends beyond winning infrastructure contracts.

The company views large infrastructure deployments as an entry point for longer-term relationships involving managed services, support and software, creating opportunities for recurring revenues as projects mature.

“Infrastructure for us is never the end of the story; it is the foundation,” CWG said. “What matters just as much, is the value that can be derived from it and what can be built on top of it.”

It said large infrastructure engagements are designed to seed multi-year digital transformation relationships, with earnings expected to improve as those engagements mature alongside its artificial intelligence and platform services strategy.

This represents a significant departure from the hardware-heavy model that characterised the company when it listed in 2013. Rather than relying primarily on transactional hardware sales, CWG is increasingly positioning infrastructure as the base from which it can generate services, software and recurring income.

The company said it remains focused on becoming the technology partner of choice for institutions driving digital transformation across Africa as technology adoption accelerates.

“As the appetite for technology adoption continues to grow, CWG remains focused on being the technology partner of choice for institutions driving digital transformation across Africa,” it said.

CWG’s transformation therefore offers a case study of how a traditional technology distributor can reposition itself around infrastructure, cloud, recurring services and emerging digital technologies as the African technology market evolves.

After more than a decade of repositioning, the company believes the combination of expanding infrastructure demand, sovereign cloud requirements, data-centre growth, managed services and artificial intelligence could provide the next leg of its earnings growth.

“As we always say, our best is yet to come!” the company said.