Nigeria’s cloud infrastructure has enough capacity to support banks’ migration of payment data under the Central Bank of Nigeria’s (CBN) localisation deadline, but shortages of specialised talent and weaknesses in fibre security could complicate the transition.
The development puts about N200 billion that Nigeria’s 10 largest banks reportedly spend quarterly on cloud and information technology services under fresh scrutiny, as financial institutions assess the cost and reliability of moving more workloads to local infrastructure.
Industry leaders made the assessment at a three-hour roundtable themed “Making Data Localization Work: Infrastructure, Cost, Compliance & the Future of Nigeria’s Digital Payments Ecosystem,” hosted by SPARK, organisers of the African Technology Expo, in partnership with B4B Partners in Lagos.
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Nigeria’s electronic payment transactions reached N284.99tn in the first quarter of 2025, representing a 17.7 percent increase from a year earlier, highlighting the growing volume of financial data that local infrastructure must support.
Ayobami Olajide, head of research at Kickoff Africa and moderator of the session, said the scale of digital transactions means reliability will be critical as banks migrate workloads. “One percent failure rate is not acceptable,” he added.
Fola Olatunji-David, technical adviser to the chief executive officer at the National Identity Management Commission (NIMC), said the localisation policy had not outpaced Nigeria’s infrastructure development.
“It is not a policy that has come from nowhere,” he posited.
Olatunji-David said he did not believe any cloud provider in Nigeria was operating at 100 percent capacity, suggesting that existing providers could accommodate additional workloads from banks and other financial institutions.
He pointed to NIMC’s national identity database, which he said contains more than 140 million records, including about 100 million biometric records, as an example of large-scale data being managed locally.
According to him, service quality improved as more services connecting to the database were localised.
However, he identified specialised migration expertise as a major requirement, urging the CBN to ensure that professionals handling migration projects are certified.
“That is one area that we don’t want to skimp on,” he said.
Ifeanyi Otudor, head of cloud solutions at MTN Nigeria, said local providers already operate under international standards including PCI DSS, ISO and SOC 2.
“We are localising. That doesn’t mean that we are local champions. We are local but global players,” he said.
Otudor said MTN has offered some migrating customers about three months of free service to refactor applications, with commercial charges beginning after successful migration.
The company is also expanding its cloud marketplace with services developed by partners and startups.
For banks, however, the economics of localisation could determine how quickly workloads move.
Daniel Babatunde, chief technology officer of Patrick Gold Microfinance Bank, said the bank moved away from Microsoft Azure around 2019 or 2020 partly because of foreign exchange exposure.
Hosting locally in naira reduced the need to price infrastructure against the dollar, while leased-line connections to NIBSS, Interswitch and Unified Payments improved connectivity compared with IPsec tunnels over the public internet.
The trade-off was greater engineering effort, he said, with local infrastructure not necessarily providing all the one-click installation options available on major global cloud platforms.
Babatunde said banks should examine encryption at rest and in transit, firewall provisioning, VPN and leased-line connections to payment processors, IP re-addressing and security-by-design architecture before migration.
Fibre security also emerged as a key risk to Nigeria’s localisation ambitions.
Babatunde called for stronger protection of fibre and data-centre infrastructure against vandalism, warning that disruption to connectivity could affect the reliability of financial services hosted locally.
“Data now is the new oil. We must protect it the way we protect our pipeline,” he said.
Olatunji-David said telecom infrastructure had been designated as critical national infrastructure under a presidential directive and that its vandalisation had been criminalised.
She also cited right-of-way coordination through Lagos State’s infrastructure agency, the Federal Government’s Project BRIDGE fibre rollout and satellite connectivity from NigComSat and Starlink as measures that could improve infrastructure resilience.
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The discussions suggest that Nigeria’s localisation challenge is shifting from whether local cloud capacity exists to whether banks can migrate and operate workloads reliably and competitively.
Olajide said panellists agreed that migration within the remaining compliance window was feasible, but developing the talent required to sustain the infrastructure would take longer.
For local cloud providers, the coming migration could therefore bring more financial-sector workloads while placing greater pressure on pricing, engineering capacity and infrastructure resilience.
