Nigeria seeks local cloud capacity to cut data costs

Nigeria is actively working to expand its domestic cloud infrastructure, a strategic move aimed at significantly reducing the cost of digital services, curbing capital flight, and generating local employment opportunities. This initiative is a key component of the government's broader push to strengthen the nation's digital economy.

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Our goal is not to take away the public cloud. It’s to get hyperscalers to localise.

The National Information Technology Development Agency (NITDA) is spearheading this effort, engaging in partnerships with both local data center operators and international cloud providers. The objective is to increase Nigeria's in-country cloud capacity under a new National Sovereign Cloud initiative, according to NITDA Director-General Kashifu Inuwa. Currently, over 85 percent of Nigeria's digital workloads are processed on public cloud platforms, with the majority of the underlying infrastructure located outside the country.

Inuwa emphasized that the government's aim is not to eliminate public cloud services but to incentivize global cloud providers to establish a physical presence and invest in local infrastructure. "Our goal is not to take away the public cloud. It’s to get hyperscalers to localise," he stated. This localization is crucial for building domestic capacity, ensuring digital self-determination, and maintaining the operation of critical data and services even during international connectivity disruptions.

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Our goal is not to take away the public cloud. It’s to get hyperscalers to localise.

The reliance on foreign cloud infrastructure also exposes Nigerian businesses and consumers to fluctuating foreign-currency costs. NITDA is collaborating with Galaxy Backbone on a memorandum of understanding to make cloud services more affordable for startups, allowing them to pay in local currency. Inuwa believes increased local competition will naturally drive down prices, as the current lack of competition allows hyperscalers to dictate terms. This initiative builds upon Nigeria's 2019 "Cloud First" policy, which encouraged government agencies to use cloud services but inadvertently led to a greater reliance on international platforms rather than local infrastructure development.

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Right now, lack of competition means hyperscalers set their own price. With local competition and capacity, prices will naturally drop.