Technology experts have backed the Central Bank of Nigeria’s (CBN) push for local data storage by financial institutions, but warned that rising costs and infrastructure challenges could threaten its successful rollout.
The CBN, in a directive issued on June 15, required financial institutions involved in payment services in Nigeria to store and manage locally generated data within the country, in line with applicable data protection laws.
The directive is set to take effect on January 1, 2027.
Olajuwon Abayomi, General Manager of Termii Nigeria, said data localisation had become increasingly important as artificial intelligence expands and data becomes a critical economic resource.
According to him, Nigeria, as a sovereign nation, should have greater control over data generated within its borders rather than relying heavily on infrastructure located abroad.
Alabi Zubair, Vice President of Product and Business Development at Scandium, also backed the policy, saying dependence on foreign infrastructure could expose Nigerian businesses to external control and potential disruptions.
Zubair stressed that the success of data localisation would depend on Nigeria’s ability to develop sufficient infrastructure to support businesses migrating their systems locally.
He stated that although Nigerian companies have developed numerous digital products and services, much of the infrastructure powering those solutions remains outside the country.
Abayomi Adewuyi, a software engineer at E-Doc Online, warned that companies could face higher operational costs as they move their systems and databases to local infrastructure.
He said businesses currently hosting their systems in other regions would have to consider the technical and financial implications of relocating their data to Nigeria, including possible changes in service latency, network egress and cloud-related costs.
Zubair acknowledged that data hosting in Africa can currently be more expensive, but said increased investment in Nigerian data centres could help reduce costs.
He called for greater investment in local data centres and supporting infrastructure to enable businesses to comply with the policy without facing excessive financial pressure.
Rodney Jackson-Cole, Co-founder and Chief Executive Officer of Bani, said his company spends about $2,000 monthly on infrastructure, exposing it to foreign exchange risks because much of the cost is dollar-denominated.
He welcomed the prospect of paying for infrastructure services locally, saying it could reduce the pressure created by exchange-rate fluctuations.
Jackson-Cole stressed that local providers must offer services comparable to those provided by international cloud companies.
He said businesses would be more willing to migrate to local infrastructure if providers could deliver reliable, efficient and largely automated services at competitive prices.
Abayomi also raised concerns over the reliability of Nigerian data centres, calling for clear regulatory standards to ensure cloud service providers maintain acceptable levels of reliability and performance.
He warned that inadequate infrastructure and unreliable services could disrupt businesses, discourage investors and affect funding for Nigeria’s technology sector.
According to him, the government must ensure that adequate resources and infrastructure are available before fully enforcing the policy.
Jackson-Cole similarly said the success of the initiative would depend on whether local providers can match the quality, efficiency and scalability of international alternatives.
He said businesses should not be forced to choose between complying with the localisation policy and maintaining the quality of services they provide to customers.
According to Data Centre Map, there are more than 260 data centres across 43 African countries, with Nigeria accounting for 35.
The experts said the policy could strengthen Nigeria’s digital sovereignty and reduce reliance on foreign infrastructure, but stressed that its success will depend on the availability, affordability and reliability of local services.
Ojo Triumph
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