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Technology experts have welcomed the Central Bank of Nigeria’s (CBN) decision to require local storage and management of payment data generated in Nigeria, but warned that inadequate infrastructure, reliability concerns and potentially higher costs could complicate implementation.
The CBN issued the directive on June 15, 2026, requiring financial institutions and other payment-sector participants operating in Nigeria to ensure that locally generated payment data is stored and managed within the country in accordance with applicable data-protection regulations.
The new requirement is scheduled to take effect from January 1, 2027, giving banks, fintechs and other payment companies time to review their existing infrastructure and make the necessary adjustments.
Data Sovereignty Drives Support
Industry stakeholders broadly agree with the principle behind the policy, particularly as artificial intelligence increases the economic and strategic value of data.
Olajuwon Abayomi, General Manager of Termii Nigeria, said localisation has become increasingly difficult to avoid as AI makes data more important to national economies.
He argued that Nigeria should have greater control over data generated within its borders, particularly as the country seeks to strengthen its digital sovereignty.
Similarly, Alabi Zubair, Vice President of Product and Business Development at Scandium, said continued dependence on foreign infrastructure creates a strategic vulnerability because businesses remain dependent on overseas providers for critical digital infrastructure.
Zubair noted that Nigeria has developed numerous digital products and services, but much of the infrastructure supporting them is still controlled outside the country.
He therefore called for greater investment in domestic infrastructure alongside the localisation policy.
Cost Could Become a Major Challenge
While stakeholders support the policy’s direction, concerns remain over the financial implications for businesses that currently rely on foreign cloud infrastructure.
Abayomi Adewuyi, a software engineer at E-Doc Online, said moving databases and other workloads to Nigeria could affect both latency and network-related costs.
Businesses migrating infrastructure may incur additional expenses associated with bandwidth and network egress, while changes in the physical location of servers could also influence the speed at which some digital services operate.
For companies already paying for infrastructure in foreign currency, localisation could nevertheless provide another advantage if suitable local alternatives allow them to pay in naira.
Rodney Jackson-Cole, Co-founder and Chief Executive Officer of Bani, said his company spends about $2,000 monthly on infrastructure, exposing the business to foreign-exchange fluctuations.
He said the ability to pay for comparable infrastructure locally would reduce some of the pressure associated with sourcing dollars and managing exchange-rate movements.
Local Data Centres Need to Scale
Experts said the success of the CBN’s directive will depend heavily on the capacity of Nigeria’s data-centre industry.
Zubair acknowledged that local infrastructure can currently be more expensive in some cases but argued that increasing the number of data centres in Nigeria could eventually reduce costs through greater competition and investment.
According to data cited by TheCable from Data Centre Map, Africa has more than 260 data centres across 43 countries, with Nigeria accounting for 35.
The figures point to a growing domestic infrastructure base, although experts believe additional investment will be required to support the country’s expanding digital economy.
Reliability Is as Important as Localisation
For technology companies, however, simply having data centres within Nigeria will not be enough.
Abayomi of Termii said businesses need assurances that local cloud providers can deliver the reliability and performance they currently obtain from international providers.
He called for regulations that establish clear reliability standards for cloud infrastructure, arguing that poor service quality could hurt businesses and make Nigeria less attractive to technology investors.
If companies are compelled to move workloads locally without sufficient infrastructure to support them, the resulting disruptions could create additional risks for businesses and potentially affect funding for Nigerian technology companies.
Local Services Must Match Global Standards
Jackson-Cole also stressed that Nigerian cloud providers must compete on more than local pricing.
He said domestic services need to offer a comparable experience to international platforms in terms of reliability, automation, efficiency and scalability.
For businesses, the attraction of local infrastructure would be considerably stronger if companies could access high-quality services, pay locally and avoid the foreign-exchange exposure associated with overseas providers.
This means infrastructure development and policy implementation will need to progress together.
AI Raises the Stakes
The debate over data localisation is becoming more significant as Nigeria expands its artificial intelligence ambitions.
AI systems depend heavily on data and computing infrastructure, making control over data storage increasingly important for governments and businesses seeking to develop domestic AI capabilities.
Localising critical financial data could strengthen Nigeria’s control over sensitive information while creating additional demand for domestic data centres, cloud services and related infrastructure.
However, experts believe the policy must be implemented carefully to avoid imposing disproportionate costs on businesses.
Balancing Sovereignty With Business Reality
The CBN’s localisation policy represents a significant shift in Nigeria’s approach to financial data infrastructure.
Its core objective of keeping critical payment data within Nigeria has received broad support from technology stakeholders, particularly amid growing concerns about digital sovereignty and dependence on foreign infrastructure.
The bigger challenge will be ensuring that local alternatives can deliver the cost, reliability, security and performance businesses require.
For Nigeria, the policy could become a catalyst for investment in data centres and cloud infrastructure, but only if government, investors and technology companies work together to expand capacity before the January 2027 deadline.
The direction of policy may be clear, but its success will ultimately depend on whether Nigeria can build enough reliable infrastructure to make data localisation commercially viable for the businesses expected to comply.
