Telcos Champion CBN’s Data Localisation Mandate, Asserting Nigeria’s Robust Infrastructure Capacity
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has publicly endorsed the Central Bank of Nigeria’s (CBN) directive mandating banks and fintech companies to host payment transaction data within the country. This strong backing signals confidence in Nigeria’s existing infrastructure and its capacity to manage critical financial data domestically.
ALTON Chairman, Mr. Gbenga Adebayo, articulated this position in a recent interview, following the CBN’s issuance of a directive requiring all banks, fintechs, and other payment service providers to store payment transaction data generated in Nigeria on local servers, effective January 1, 2027. This regulatory move is a significant component of the CBN’s strategy to enhance oversight of Nigeria’s rapidly expanding digital payments ecosystem.
Mr. Adebayo emphasised that data sovereignty necessitates nations taking full responsibility for their entire data value chain, encompassing collection, management, storage, and integrity assurance. He stated, “We cannot continue to outsource that to other jurisdictions. The more we host our data locally, the better for us.” This local hosting approach, he explained, will empower Nigeria to manage data end-to-end, thereby guaranteeing the integrity of vital information.
The ALTON chairman further highlighted the operational inefficiencies and increased costs associated with hosting payment data outside Nigeria. He noted that such arrangements necessitate extended communication pathways between the user’s location and the offshore data host, leading to increased latency and higher data retrieval expenses for every transaction.
Describing the CBN’s directive as a crucial initial stride towards achieving national data sovereignty, Mr. Adebayo confidently dismissed concerns regarding infrastructure readiness. He asserted that Nigeria possesses substantial data centre capacity, with several Nigerian-owned facilities already hosting data for international organisations. “I’m happy to say that we have a lot of data centres owned and managed by Nigerians that are hosting data from other jurisdictions. If people overseas can host their data here, why can’t we host our own data here?” he queried.
This shift towards local hosting, according to Adebayo, will not only reduce reliance on foreign infrastructure but also bolster national control over data security. He argued that concerns about security and reliability should not be a justification for continued dependence on foreign hosting providers, stating, “No one can protect your house better than yourself. You have more at stake in terms of security and safety than somebody else hosting your data.”
Beyond security and control, the directive presents significant financial advantages. Organisations that transition to local data hosting will be able to conduct transactions in local currency, mitigating exposure to exchange rate volatility and potentially lowering long-term operating costs.
Mr. Adebayo confirmed that Nigeria currently operates approximately six Tier III data centres, with additional facilities under development. He stressed that the critical factor is not merely the number of data centres but their hosting capacity, which he affirmed is sufficient. He urged all stakeholders to expedite efforts towards domesticating data hosting and management practices, concluding, “The earlier we begin to domesticate our data hosting and data management, the better for us.”
