The apex bank of Nigeria, in a circular issued on June 15, directed banks, payment service providers and fintech companies to host all payment-related data domestically by January 2027, as part of efforts to strengthen the security, sovereignty and resilience of Nigeria’s financial system.
The CBN says the data localisation policy is designed to strengthen Nigeria’s payment infrastructure by ensuring critical financial data remains within the jurisdiction of the country in order to improve digital resilience and data sovereignty.
While the directive allows firms to continue using cloud providers, their data must reside within Nigeria through local infrastructure, shifting workloads from foreign cloud regions to domestic data centres.
Meanwhile, the fintech industry has raised concerns over the Central Bank of Nigeria’s (CBN) directive requiring payment-related data to be stored and processed within the country, warning that the success of the policy will depend on the capacity and resilience of local data infrastructure. Concerns were raised over whether existing data centres can handle the scale and complexity of Nigeria’s rapidly growing digital payments ecosystem.
Adedapo Sobayo, Co-founder and Chief Technology Officer of Rank, said the issue is not the availability of local data centres but their ability to deliver the processing capacity, reliability and uptime required by financial institutions;
“There are data centres in Nigeria, but the real question is whether they have the processing capacity and service quality needed by the country’s largest financial institutions” – Sobayo
Despite the concerns, Sobayo believes the six-month implementation window is achievable if companies adopt a structured migration strategy and begin working with local infrastructure providers early.
Key stakeholders in the industry warn that migrating large-scale financial systems from global cloud providers to local infrastructure without adequate testing could expose payment platforms to downtime and service disruptions.
Amongst the stakeholders, Musa Ganiyu, Chief Executive Officer of Payvessel, identified disaster recovery as a major concern, stressing that most of Nigeria’s data centres are concentrated in Lagos, limiting geographical redundancy in the event of outages;
“If a major incident occurs at a local data centre and there is no backup on another server, that could become a significant challenge” – Ganiyu, CEO Payvessel
Many in the field also expressed concerns over the complexity of migrating financial systems, emphasizing that moving payment infrastructure involves database replication, system reconfiguration and continuous validation to avoid disrupting transactions.
They added that compliance could increase operating costs, particularly for startups that currently benefit from infrastructure credits and affordable services offered by global cloud providers such as Amazon Web Services (AWS) and Microsoft Azure.
