Nigeria’s New Directive to Keep Financial Data Local

In a move that reshapes the IT landscape for financial institutions, Nigeria’s Central Bank has issued a directive requiring all payment transaction data generated in the country to be stored locally from January 1, 2027.

The mandate affects deposit money banks, microfinance institutions, mobile money operators, and payment service providers. Currently, estimates suggest over 90% of regulated businesses rely on foreign cloud platforms like AWS, Azure, and Google Cloud for data storage.

The Economic Context

Nigeria’s financial sector currently spends around $850 million annually on foreign cloud infrastructure—capital that leaves the economy while placing sensitive national data under foreign legal jurisdiction. Technology spending by Nigeria’s ten largest banks alone reached NGN 177.91 billion (approximately $130 million) in Q1 2026, a 31% increase from the previous year.

Regulatory Framework Takes Shape

To facilitate compliance, the National Information Technology Development Agency (NITDA) has introduced several regulatory instruments as part of the National Sovereign Cloud Initiative:

• National Cloud Computing Guideline
• National Cloud Technical Guideline
• National Digital Infrastructure Assurance Framework
• National Cloud Investment Strategy

From October 2026, a national digital regulatory platform will serve as the central portal for onboarding and certification of cloud providers.

Challenges and Opportunities

While Tier 1 and Tier 2 banks have largely localized their transaction data, fintech companies face a tighter timeline to migrate existing applications and infrastructure. The transition requires substantial investment and technical redesign—estimated at over $850 million across the sector.

This directive creates significant opportunities for local providers like Galaxy Backbone and Open Access Data Centres, which are expanding capacity to meet anticipated demand. Nigeria’s data centre market currently boasts around 26 facilities with a combined capacity of 65-86 megawatts—projected to exceed 400 megawatts within the next five years.

As Temitope Osunrinde of Africa Hyperscalers noted, this policy represents “one of the strongest demand signals yet” for local cloud infrastructure and services.