Sitting in a white prefab hut, Lindsay Magnus punches a code into a computer beneath bands of red, green and blue representing the Centaurus A galaxy. Beyond the window, seven giant dishes turn in unison, throwing shadows across the gravel. Their target lies millions of light years away in the cosmos.

Magnus and his colleagues are aiming to build the world's biggest telescope. It will cost £1.3bn and consist of thousands of dishes with a total surface area of one square kilometre. It will generate enough raw data to fill 15m 64 GB iPods every day, requiring a supercomputer 1,000 times faster than currently exists. It will peer back to a time before the first stars and galaxies formed and offer our best chance yet of detecting alien intelligence.

And there is a strong chance the telescope will be African. Bids will be submitted on Thursday to host the Square Kilometre Array (SKA), an instrument that turns radio waves into pictures of galaxies, exploding stars and other space phenomena. The contest pitches South Africa (in partnership with eight other African countries) against Australia and New Zealand.

Both contenders offer vast tracts of land with tiny populations – vital to avoid interference from mobile phones and other electronics. Both are also in the southern hemisphere, which offers a better perspective on the centre of our galaxy but which has been relatively neglected to date. An old joke has it: "God put all the astronomers in the northern hemisphere and all the interesting objects in the southern."

But Africa would also have political purchase. A continent often written off as broken and doomed, and a backwater of scientific research is on the verge of landing one of the most important astronomical projects of the early 21st century. Much was said about last year's football World Cup as a blow to "Afro-pessimism."

The SKA could be a galvanising moment for its intellectual capital, self-confidence and prestige around the world. "I work in a world class field and now I can do it at home, I don't have to go overseas," said Magnus, commissioning scientist at the Karoo Array Telescope (KAT-7), a prototype of the SKA. "If it comes to Africa, conversations will happen that never could have happened.

"If you were to think about the way to impact people here with science, there's no better way. Children already know there's something big going on – it's broadening their horizons. It's very different from the daily toll of war, famine and poverty."

KAT-7 is an array of seven 16-metre-tall dishes undergoing tests in the Karoo desert. Staff charter a weekly flight from Cape Town to the Northern Cape village of Carnarvon, then drive for an hour into a wilderness where only sheep, springboks and hardy farmers venture. Mobile phone reception soon disappears, which is just the way the researchers like it.

This is a quarantined zone where anything that emits radio frequency interference (RFI) is like an infectious disease. Internet connections are by fibre optic cables only. "Wifi is a curse word round here," one scientist observed.

Such is the dishes' sensitivity that their "cold" receivers are cryogenically cooled to about 70 kelvin (-203C) to reduce "noise". Banks of data servers, with green and red lights scrolling left and right below humming air conditioners, are sealed inside RFI-shielded containers with thick metal doors providing "radio airlocks".

The staff kitchen, including a potentially intrusive microwave oven, and recreation room are hidden safely behind a lone hill ("Losberg" in Afrikaans) in isolated buildings that resemble a lunar base. A notice on the wall gives emergency contact numbers and reassurance that Carnarvon hospital is "stocked with snake anti-venom".

The heavy data lifting, however, is performed hundreds of miles away at a control room beneath Table Mountain in Cape Town. Here, staff sit at computer screens looking at what appear to be red and yellow blobs but actually represent 10 hours' observation of galaxies such as PKS 1610-60, some 240m light years away.

Dr Deborah Shepherd, project scientist and commissioning manager, has moved from her native America to join the team. "You have a fresh outlook on things in South Africa," she said. "The innovation that's coming out is incredible. They're not limited by the way things have been done in the past."

"During apartheid, South Africans have to pitch in and get on with things themselves. They are willing to change if they get it wrong. When they make mistakes, they figure out how to solve them."

The project says it has created jobs for about a hundred young scientists and engineers with skills in "next generation" technologies. It has funded nearly 300 bursaries for astronomy, engineering and physics students and says astronomy is now being taught in Botswana, Ghana, Kenya, Mozambique, Madagascar, Mauritius and Zambia.

But in South Africa, where economic and educational disparaties persist between the white minority and black majority, diversity is a hypersensitive issue. Dr Bernie Fanaroff, the country's SKA project director, said: "If you look at astronomy around the world, it's heavily dominated by middle aged white men. We've tried very hard to get women and black astronomers and engineers into the programme.

"If you go to a number of European countries, you'll see that the proportion of women in our programme is much higher, so we're doing quite well. It's been quite difficult to get black astronomers and engineers. Some of the technologies that we're dealing with are technologies that black students haven't gone into — things like digital signal processing."

Fanaroff added: "We've been finding young people and bringing them into our training programmes as far as we can. We haven't gone nearly far enough, but if you look at our bursary programme for instance, more than half the bursaries and grants have gone to black students, and I think it's about 40% have gone to women." Next, KAT-7 will grow into MeerKAT, a £130m radio telescope with 64 dishes that will rival the current world leader, the Very Large Array in New Mexico. But even MeerKAT, due to be completed by 2016-17, is a mere "baby step" towards the SKA.

This will cost £1.3bn to build and about £130m a year to operate. Construction will start in 2016 and take eight years, funded by a UK-based consortium likely to be made up of 16 countries. They will choose next year between Africa and Australia.

If Africa wins, around 3,000 dishes will be spread across more than 3,000km in South Africa and its partners. Fanaroff said: "It's changing the way South Africa is seen, not just as yet another African country which is a basket case but actually as a science and technology leader.

"A lot of African countries are now recognising the importance of science and technology in development. Africa has not been perceived up to now as a place where you do science and technology, but that doesn't mean it shouldn't be in the future.

"People are talking about Africa as the next great business destination. You've probably seen the McKinsey report about the African lions, which makes the point that it's not only in resource extraction, it's also in manufacturing and so on. We want to take that further into hi-tech now.

"I would like South Africa in particular, but Africa in general, to be seen as a place where you can do world class science and technology."

At a presentation in London earlier this year, Fanaroff floated an inevitable question: "We have immediate priorities like housing, poverty, education, transport, so why would we spend money on astronomy?"

MeerKAT project manager Willem Esterhuyse has at least one answer.

"You can say we're going to cater to basic needs and be a third world country, or you can push technology and be there with the best," he said.

"The World Cup showed we're a country on the way up, a country that can do things. You need to inspire innovators and teach people hard skills so they can develop things that sell and create jobs. There are a lot of potential spin-offs from what we do."

Size matters

"To observe the most distant and ancient objects in the cosmos, scientists turn to telescopes of staggering proportions. The reason is simple: in astronomy, size matters.

Larger telescopes can collect more light (and other forms of electromagnetic radiation) than smaller ones. In doing so, they can see fainter objects that are farther away, such as stars that formed earlier in the life of the universe.

The Square Kilometer Array (SKA) will gather radiowaves instead of visible light, giving it advantages over traditional optical telescopes. Radiotelescopes can see through inclement weather, operate in daylight hours and are less troubled by cosmic dust. They can pick up radiowaves from cold hydrogen atoms that are ubiquitous in space, allowing astronomers to map the heavens in a radically different way.

These advantages come at a price. Just as optical telescopes can be blinded by the sun and artificial lighting, radiotelescopes are best built in remote locations, far from sources of radiowaves, such as mobile phone base stations.

The largest radiotelescope in operation, near Arecibo in Puerto Rico, collects radiowaves over an area of 73,000 square metres, and has a long list of discoveries to its name. Using the telescope, astronomers spotted the first planets outside our solar system, confirmed Einstein's theory of general relativity and measured the rotation of Mercury.

The SKA will have a collecting area of one million square metres, making it 50 times more sensitive than any other telescope. With it, astronomers hope to see as far back as the cosmic "dark ages", the period before the first stars blinked into being. Others will study how the first black holes formed, look for signs of alien life, and possibly unravel the mystery of the dark energy that drives the expansion of the universe.

Instead of one giant telescope dish, the SKA will use 3,000 smaller dishes, each around 15m-wide, spread out over thousands of kilometres. These will collect high frequency radiowaves, while two other kinds of receptors, will pick up medium and low frequency waves. The signals from all of the receivers are combined and sent along a fibre optic cable to a high performance computer for processing.