Technology experts have endorsed the Central Bank of Nigeria’s directive requiring financial institutions to store and manage locally generated data within the country, while cautioning that high costs and inadequate infrastructure could undermine its success.
In a circular dated June 15, the CBN mandated that payment service providers keep and process Nigerian-generated data onshore, in compliance with existing data protection laws. The rule takes effect on January 1, 2027.
Olajuwon Abayomi, general manager of Termii Nigeria, said data localisation has grown more urgent as artificial intelligence advances and data emerges as a strategic economic asset. “As a sovereign nation, Nigeria should exercise greater control over data generated within its borders rather than relying heavily on infrastructure located abroad,” he said.
Alabi Zubair, vice president of product and business development at Scandium, similarly supported the policy, arguing that heavy dependence on foreign infrastructure leaves Nigerian businesses exposed to external control and potential disruptions. He noted that while Nigerian firms have built many digital products, the underlying infrastructure often remains offshore. Success, he stressed, hinges on developing enough local capacity to support the migration of systems.
Abayomi Adewuyi, a software engineer at E-Doc Online, warned that companies currently hosting systems abroad will face higher operational costs. Relocating databases and applications, he said, will require careful assessment of technical and financial impacts, including possible changes in latency, network egress charges and overall cloud expenses.
Zubair acknowledged that data hosting in Africa is presently more expensive than in many other regions, but said expanded investment in Nigerian data centres could eventually bring costs down. He called for greater funding of local facilities and supporting infrastructure so that businesses can comply without excessive financial strain.
Rodney Jackson-Cole, co-founder and chief executive of Bani, said his company currently spends about $2,000 a month on infrastructure, much of it dollar-denominated and therefore exposed to foreign-exchange volatility. He welcomed the prospect of paying for services in naira, provided local providers can match the reliability, efficiency and automation offered by international cloud platforms. Businesses, he argued, should not be forced to choose between regulatory compliance and service quality for their customers.
Abayomi also raised concerns about the reliability of existing Nigerian data centres. He urged regulators to set clear performance standards and warned that inadequate infrastructure could disrupt operations, deter investors and limit funding for the technology sector. The government, he said, must ensure sufficient capacity is in place before fully enforcing the policy.
According to Data Centre Map, Africa has more than 260 data centres across 43 countries, of which 35 are located in Nigeria.
Experts agreed that the CBN measure could strengthen Nigeria’s digital sovereignty and reduce reliance on foreign infrastructure. They emphasised, however, that its ultimate success will rest on the availability, affordability and reliability of local services.
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