Nigeria Pushes for Data Sovereignty with New Financial Regulations

In a move to strengthen data security and boost the domestic tech ecosystem, Nigeria’s central bank has issued a directive requiring all payment transaction data generated within the country to be stored locally from January 1, 2027.

The mandate applies to deposit money banks, microfinance institutions, mobile money operators, switching companies, and payment service providers. This follows similar directives aimed at digital asset management and fintech operations.

The Economic Context

Currently, Nigerian enterprises spend an estimated $850 million annually on foreign cloud infrastructure—funds that leave the country’s economy while also placing sensitive data under international legal jurisdiction. Industry sources indicate that over 90% of regulated businesses still rely on overseas cloud platforms.

Regulatory Framework and Timeline

The National Information Technology Development Agency (NITDA) has been tasked with implementing this policy, establishing a National Sovereign Cloud Initiative including:

  • National Cloud Computing Guideline
  • National Cloud Technical Guideline
  • National Digital Infrastructure Assurance Framework
  • A digital regulatory platform for onboarding and certification

From October 2026, all cloud providers serving the Nigerian financial sector will need to register and demonstrate compliance through this new portal.

Industry Response

While Tier-1 banks have largely localized their data storage, fintech companies face a tighter deadline given existing international contracts. The migration requires significant investment in local infrastructure and cybersecurity measures.

“This is one of the strongest demand signals yet for local data centers, cloud platforms, and interconnection services,” noted Temitope Osunrinde of Africa Hyperscalers.

Nigeria currently has about 26 operational data center facilities with a combined capacity estimated between 65-86 megawatts, which industry experts project could exceed 400 megawatts within the next five years as new facilities come online.