CBN data rules to drive digital infrastructure expansion

Nigeria's financial sector is poised for a significant shift as the Central Bank of Nigeria (CBN) mandates that all payment transaction data generated within the country must be stored on local servers from January 1, 2027. This directive applies to banks, fintechs, payment service providers, and other licensed entities in the payments ecosystem.

Ayotunde Coker, the Chief Executive Officer of Open Access Data Centres, anticipates that this policy will accelerate investment in Nigeria's digital infrastructure. He expects a surge in demand for data centers, cloud services, and interconnection platforms as companies work to comply with the new local storage requirements. Coker noted that while regulatory timelines can be demanding, companies typically adapt by upgrading infrastructure or investing in new systems to ensure seamless compliance.

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If your regulator tells you to do something by 1 January in six months, you get your head down and work out what you need to do.

Coker also addressed concerns about data security, asserting that modern data centers adhere to strict physical and operational security standards that align with global benchmarks. He clarified that while cybersecurity remains the responsibility of service providers, the physical and environmental security of data centers is robust. "There is a work standard to how data centers are. Physical security protocols are very high and meet global standards," he stated.

The policy is seen as a move to strengthen Nigeria's digital economy and enhance data governance. Coker rejected the notion that local data hosting compromises privacy or increases the risk of data misuse, arguing that effective governance and enforcement, rather than data location, are the primary determinants of data security outcomes. Nigeria currently has 17 operational data centers, with nine more under development, reflecting the sector's rapid growth driven by increased digital payment activities and demand for cloud services.

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There is a work standard to how data centers are. Physical security protocols are very high and meet global standards.