Nigeria's data centre infrastructure has sufficient capacity to support the Central Bank of Nigeria's (CBN) new payment data localisation requirement, according to industry executives and government officials. However, they warned that shortages of specialised talent, pricing pressures, and the security of fibre infrastructure could complicate the transition. The assessment was made at a recent roundtable discussion in Lagos, where senior representatives of MTN Nigeria Communications, Patrick Gold Microfinance Bank, and the National Identity Management Commission discussed the practical implications of the CBN's data localisation rule.
The CBN's data localisation rule, which comes into effect on January 1, 2027, requires financial institutions and payment operators to store and manage payment transaction data generated within Nigeria in the country. The rule is significant, given the scale of Nigeria's payments market, which saw electronic payment transactions reach N284.99 trillion in the first quarter of 2025, up 17.7% from N234.49 trillion a year earlier. Point-of-sale transaction value also rose sharply during the period, reaching N10.45 trillion.
Industry experts emphasised that the localisation requirement is not a blanket order to move every banking or fintech workload from international cloud platforms to Nigerian infrastructure. Technical Adviser to the CEO at NIMC, Fola Olatunji-David, rejected the view that the mandate had outpaced the market, citing NIMC's own localised national identity database, which holds over 140 million records, about 100 million of them biometric. He urged the CBN to require certified migration personnel to ensure a smooth transition.
Cloud providers are positioning themselves to support organisations through the transition, with local providers already operating to PCI DSS, ISO, and SOC 2 standards. MTN Nigeria's Head of Cloud Solutions, Ifeanyi Otudor, said the company gives some migrating clients three months of service at no charge to refactor applications, with commercial terms beginning only after the migration succeeds. MTN is also expanding its cloud marketplace through partner-built services aimed at startups.
Financial institutions face challenges beyond the availability of local servers, as applications may have been designed around services offered by international hyperscalers. Chief Technology Officer of Patrick Gold Microfinance Bank, Daniel Babatunde, provided an example of a financial institution that had already moved away from a foreign cloud platform, citing exposure to foreign-currency costs and lower latency through leased-line connections to NIBSS, Interswitch, and Unified Payments.
Beyond technical demands, Babatunde raised concerns over the protection of fibre networks and data centre infrastructure from vandalism, highlighting the importance of domestic connectivity. Olatunji-David noted that the government has designated telecommunications infrastructure as critical national infrastructure and criminalised its vandalisation, citing measures to strengthen network resilience, including coordination on right-of-way and satellite connectivity.
The CBN's data localisation rule is expected to have a significant impact on Nigeria's digital payments ecosystem, with industry experts emphasising the need for careful planning and execution to ensure a smooth transition. As the deadline approaches, financial institutions and payment operators must examine their infrastructure and migration strategies to ensure compliance with the new rule.
Key points
- The CBN's data localisation rule requires financial institutions and payment operators to store and manage payment transaction data generated within Nigeria in the country.
- Industry experts warn that shortages of specialised talent, pricing pressures, and fibre infrastructure security may complicate the transition to local data centres.
- Cloud providers are positioning themselves to support organisations through the transition, with local providers already operating to international standards.
