The Chief Executive Officer of Open Access Data Centres, Ayotunde Coker, has expressed optimism that the Central Bank of Nigeria's directive on data localisation will attract foreign direct investments to Nigeria. The directive, which takes effect from January 1, 2027, mandates all financial institutions to host their data locally in Nigeria. Coker believes that this move will send a strong signal to foreign cloud providers that host Nigerian data abroad, encouraging them to invest in Nigeria or partner with local cloud providers.
Coker made these remarks in Lagos while reacting to concerns that financial institutions may only partially comply with the directive. He noted that some institutions may decide to return a fraction of their data to Nigeria in the name of compliance but still host the bulk of their data outside Nigeria. Coker advised banks and other institutions to begin working out the processes and risks associated with the directive and seek clarification from experts where necessary to ensure a seamless compliance process.
According to Coker, many banks and financial institutions currently host their core banking applications and sensitive data on clouds outside Nigeria. Some local cloud providers also host Nigerian data on foreign cloud platforms such as AWS Cloud, Microsoft Cloud, Google Cloud, or Oracle Cloud, which are domiciled in countries like the United States, United Kingdom, and others. This practice, Coker argued, negates Nigeria's sovereignty and poses grave security implications.
The Nigerian Data Protection Act is against such foreign hosting of sensitive data, Coker noted. The Act aims to protect the rights of individuals and ensure that their data is handled in a secure and responsible manner. By hosting data locally, financial institutions can ensure that their data is stored and processed in accordance with Nigerian laws and regulations.
Coker's comments come as financial institutions and experts begin to react to the CBN's directive. The directive is expected to have a significant impact on the way financial institutions handle data and may lead to increased investments in local data centres and cloud infrastructure. Open Access Data Centres is one of the local data centre providers that stands to benefit from the directive.
The CBN's directive is part of a broader effort to promote data localisation and protection in Nigeria. The move is expected to boost the country's digital economy and create new opportunities for local businesses and investors. As the deadline for compliance approaches, financial institutions will need to work closely with local data centre providers and experts to ensure that they meet the requirements of the directive.
Overall, the directive is expected to have a positive impact on Nigeria's economy and digital landscape. By hosting data locally, financial institutions can ensure that their data is secure, and that they are contributing to the growth of the country's digital economy. The move is also expected to attract foreign investments and create new opportunities for local businesses and investors.
Key points
- The CBN's directive on data localisation is expected to attract foreign direct investments to Nigeria.
- The directive mandates all financial institutions to host their data locally in Nigeria by January 1, 2027.
- The move is part of a broader effort to promote data localisation and protection in Nigeria.
