Technology industry leaders have thrown their weight behind the Central Bank of Nigeria’s (CBN) directive requiring financial institutions to store locally generated data within the country, describing it as a bold step toward strengthening Nigeria’s digital sovereignty. However, they caution that inadequate infrastructure and higher operating costs could undermine the policy’s implementation if critical challenges are not addressed.

The directive, issued by the apex bank on June 15, mandates all financial institutions involved in payment services to store and manage Nigerian-generated data within the country in compliance with data protection regulations. The policy is scheduled to take effect from January 1, 2027.

For many stakeholders in the technology ecosystem, the move reflects a growing global shift toward data sovereignty as nations seek greater control over valuable digital assets in an era increasingly driven by artificial intelligence and data-powered innovation.

General Manager of Termii Nigeria, Olajuwon Abayomi, said the directive aligns with international trends that view data as a strategic national resource.

According to him, as artificial intelligence reshapes economies and industries worldwide, countries are becoming more conscious of where their data resides and who controls it. He argued that Nigeria should not continue to depend heavily on foreign infrastructure for the storage and management of information generated within its borders.

Echoing similar sentiments, Vice President of Product and Business Development at Scandium, Alabi Zubair, said excessive dependence on overseas infrastructure exposes Nigerian businesses to risks beyond their control, including foreign regulations, geopolitical uncertainties and service disruptions.

He noted that while Nigerian technology firms have built innovative products and services, much of the infrastructure powering those solutions remains located outside the country.

Despite supporting the policy, Zubair stressed that its success would largely depend on Nigeria’s ability to rapidly expand local infrastructure and provide businesses with reliable alternatives to international cloud providers.

Industry experts also warned that the transition may come at a significant financial cost for businesses.

Software engineer at E-Doc Online, Abayomi Adewuyi, said organisations currently hosting their systems abroad would face both technical and financial hurdles when relocating their operations to local facilities.

He explained that businesses would need to assess migration expenses, possible changes in service performance, network egress costs and broader cloud infrastructure implications before making the switch.

While acknowledging that data hosting services in Africa remain relatively expensive compared to some international markets, Zubair expressed optimism that increased investment in Nigerian data centres could gradually drive down costs and improve service quality.

He called for coordinated efforts between government and private investors to strengthen the country’s digital infrastructure and make compliance less burdensome for businesses.

For startups and technology-driven companies, the financial implications are particularly significant.

Advertisement

Co-founder and Chief Executive Officer of Bani, Rodney Jackson-Cole, revealed that his company currently spends about $2,000 monthly on infrastructure services, leaving it vulnerable to fluctuations in foreign exchange rates because most payments are denominated in dollars.

He said the availability of competitive local alternatives could help businesses reduce their exposure to currency volatility and improve operational stability.

However, Jackson-Cole maintained that local service providers must be able to compete with international cloud companies in terms of performance, reliability and automation.

According to him, businesses are more likely to embrace local infrastructure if it offers the same level of efficiency and seamless service currently provided by global technology giants.

Questions surrounding reliability also featured prominently in the discussions.

Abayomi warned that without strong regulatory oversight and clearly defined performance standards, businesses could face operational disruptions resulting from poor service delivery by local providers.

He argued that unreliable infrastructure could discourage investment, affect business continuity and weaken confidence in Nigeria’s growing technology ecosystem.

The technology executive urged government agencies and regulators to ensure that sufficient infrastructure and resources are in place before the policy is fully enforced.

Jackson-Cole shared similar concerns, insisting that businesses should not be placed in a position where they must choose between complying with regulatory requirements and maintaining the quality of services expected by customers.

Industry data highlights both the opportunities and challenges ahead. According to Data Centre Map, Africa currently hosts more than 260 data centres spread across 43 countries, with Nigeria accounting for 35 of them.

While experts agree that the CBN’s data localisation policy could strengthen national control over digital assets, enhance cybersecurity and reduce dependence on foreign infrastructure, they insist that long-term success will depend on one crucial factor: the availability of affordable, reliable and world-class local data services.

As the January 2027 implementation deadline approaches, attention is now turning to whether Nigeria’s digital infrastructure can evolve quickly enough to support one of the country’s most ambitious technology and financial sector reforms in recent years.