Nigeria is spending close to $1 billion annually to host government data and cloud services outside the country, with the figure projected to rise to almost $4 billion in the coming years, according to the National Sovereign Cloud Initiative.
Speaking during an interview with ARISE News on Tuesday, Chairman of the Technical Working Group of the National Sovereign Cloud Initiative, Ike Nnamani, said the initiative is seeking to reverse the outflow by encouraging cloud services to be hosted within Nigeria.
“If today, Nigeria, at least from the government aspect of cloud hosting, is spending close to a billion dollars annually, and this is projected to go to close to 4 billion in the next few years as more agencies move to cloud, you know, naturally, that’s a lot of money that is spent outside the country.”
Nnamani said the initiative is designed to address both national security concerns and the financial implications of storing sovereign data outside Nigeria.
He said billions of dollars currently spent on overseas hosting could instead be retained within the Nigerian economy through local cloud infrastructure and services.
“This is being addressed also, trying to repatriate that money and making sure that these services are now hosted locally. So you are not only addressing the issue of national security, you are also addressing the issue of capital flight and pressure on the local currency.”
Nnamani said the initiative could also attract foreign direct investment as global cloud providers and other technology companies establish infrastructure within Nigeria.
“By also this initiative, we intend to also have a situation where foreign direct investment comes back into the country as new infrastructure in the area of data centers are to be built, as well as localized cloud hosting platforms are also to be built.”
He said the localisation of cloud services could also create employment opportunities as more Nigerians are recruited to provide and support the services locally.
Nnamani, clarified that the initiative would not require every category of data to be stored within Nigeria.
He said data has been classified into four categories, with the most critical categories required by law to be hosted locally.
“We’ve classified all the data into four categories: Category 3 and 4 being the most critical ones that must, by law, be stored within Nigeria.”
He said the classifications cover sensitive areas including sovereign, security, financial and healthcare data, particularly information capable of identifying Nigerian citizens and data with implications for national wellbeing and the digital economy.
Nnamani said less sensitive public data would not necessarily be required to remain within Nigeria.
“So, just to answer you, yes, it does not require every single data to be stored locally.”
He said a multi-sector committee known as SovGov, chaired by the National Information Technology Development Agency and the Ministry of Communications and Digital Economy, would oversee the classification and compliance process.
“A committee has been set up for this, which is chaired by the NITDA, as well as the Ministry of Communications and Digital Economy.”
Nnamani acknowledged that the initiative has faced some resistance from existing cloud service providers, particularly because of the scale of funds involved in overseas hosting.
“So we’ve been getting some pushback on this. But at the end of the day, this is here to stay, and what we sought is collaboration.”
He said international cloud providers currently serving Nigerian clients would be encouraged to establish local infrastructure rather than being excluded from the Nigerian market.
“Even the foreign-based cloud hosting platforms that are today hosting this infrastructure, all we are encouraging them to do is: come to Nigeria, set up a zone in-country, and offer the service right here in Nigeria.”
Nnamani said local technology companies could also benefit from the increased demand for cloud infrastructure and hosting services created by the initiative.
“The biggest beneficiaries of this are the local entities and companies.”
He said the initiative would create opportunities for existing local cloud and web-hosting companies to scale their operations while encouraging new entrants into the sector.
“What this policy is doing is pretty much creating local demand that would encourage more localized entities to go into cloud-based services.”
Nnamani emphasized, that localisation would not mean lowering the quality or security standards expected of cloud service providers.
“The same service level you will get if you host outside in any of the big global hosting platforms, it has to be the same quality of service you will offer even if it’s within Nigeria.”
He said the government’s aggregation of cloud demand across ministries, departments and agencies would also help reduce the cost of cloud services through bulk purchasing.
Nnamani explained that aggregating demand would allow the government to negotiate based on higher volumes, thereby reducing the unit cost of the services.
“So by the time they aggregate the demand and producers see it, the price they will offer it is at the higher capacity, not at the lower one, because the price points are different.”
He said the resulting savings would ultimately translate into reduced government expenditure on cloud services.
“That’s where that savings will come from, and which is one of the things the government is looking at, because they feel that once it’s aggregated and then you can buy in bulk, so to say, if I may use that phrase, then the unit price traditionally goes down at the end of the day, and that savings will now be translated to government savings.”
Ojo Triumph
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