Nigeria is preparing to extend its data localisation drive beyond the financial sector after 326 ministries, departments and agencies (MDAs) spent more than N3.8 trillion on technology between June 2023 and October 2026, raising the prospect of greater government spending on local cloud infrastructure and digital services.
Kashifu Inuwa Abdullahi, director-general of the National Information Technology Development Agency (NITDA), disclosed this at the Executive Regulatory Dialogue on Data Localisation, organised jointly by NITDA and the Central Bank of Nigeria (CBN) in Lagos on Wednesday.
He said the agency was working with the Budget Office to improve compliance across government institutions, adding that the government could use its purchasing power to accelerate the adoption of local cloud infrastructure.
The initiative forms part of Nigeria’s broader effort to strengthen control over its digital infrastructure, reduce dependence on external technology services and retain more value from the country’s growing digital economy.
“We are starting with the financial sector, which has a compliance deadline of January 1, 2027. We will establish a deadline for ministries, departments and agencies as well,” Abdullahi told BusinessDay.
The financial sector is being prioritised because it is Nigeria’s most digitised sector, according to the NITDA chief executive. The agency intends to use the experience gained from implementing the financial sector requirements to support the wider adoption of sovereign cloud infrastructure.
Abdullahi said NITDA’s analysis showed that 326 MDAs had spent more than N3.8 trillion on technology since June 2023. He argued that a significant proportion of this expenditure could be centralised through cloud services, potentially improving the speed and efficiency of government digital service delivery.
However, the agency did not disclose how much of the N3.8 trillion was spent specifically on cloud services, foreign technology providers or data storage.
The proposed shift could create opportunities for domestic data centre operators, cloud service providers and technology companies if government procurement increasingly favours locally available infrastructure that meets security, reliability and performance requirements.
It could also change how public institutions procure and manage technology by encouraging more coordinated spending instead of separate agencies developing or purchasing overlapping digital systems.
Nigeria’s data localisation policy is anchored in the National Sovereign Cloud Initiative, a framework developed by NITDA to strengthen the country’s capacity to control and sustain critical digital infrastructure. The initiative extends beyond financial services, although implementation in the financial sector is being driven by the CBN’s January 1, 2027 deadline for localising payment data.
Abdullahi said Nigeria’s growing dependence on digital technology made control over the infrastructure supporting its economy a national security concern.
Nigerian businesses spend more than $850 million annually on cloud services, according to the NITDA director-general, who argued that some of the infrastructure and services purchased externally could be developed locally.
He said building domestic capacity could create jobs, strengthen the technology industry and allow Nigeria to retain more economic value from digital services consumed by businesses and public institutions.
The agency also linked the initiative to President Bola Tinubu’s executive order designating digital infrastructure as Critical National Information Infrastructure and the federal government’s Nigeria First policy.
Abdullahi said the policy was not intended to isolate Nigeria from global technology markets but to build local capacity and ensure that Nigerian businesses participate more meaningfully in value creation.
He cited submarine cable disruptions in 2024 as an example of the risks associated with dependence on infrastructure beyond Nigeria’s control, arguing that the country needed stronger capacity to sustain essential digital services during external disruptions.
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CBN still working to localise secondary data
The Central Bank of Nigeria has also disclosed that some of its secondary data remains outside the country, even as it pushes regulated financial institutions to comply with the payment data localisation requirements.
Rakiya Opemi Yusuf, director of the CBN’s payments system supervision department, said a significant amount of the apex bank’s data was already located in Nigeria, while efforts were continuing to bring the remaining secondary data into the country.
Her disclosure provides an indication of the implementation work still required as Nigeria seeks to expand local control over data generated and processed across its financial system.
The CBN issued a circular requiring payment data to be localised in Nigeria by January 1, 2027, citing the need to strengthen national sovereignty, improve visibility over transactions and safeguard financial system stability.
Yusuf said the regulator was prioritising engagement and guidance rather than immediate punishment, with sanctions reserved for cases where institutions deliberately undermine the compliance process.
“Sanctions are not our first consideration when it comes to enforcement,” she said, adding that institutions would be supported in understanding the requirements and addressing implementation gaps.
She, however, warned that deliberate non-compliance would attract sanctions.
The CBN’s survey indicated that more than half of the financial institutions surveyed were ready to comply with the deadline. Abdullahi put the readiness rate at 59 percent, while the accompanying survey findings identified 22 institutions among 44 surveyed that had yet to begin implementation.
The figures suggest that a significant portion of the institutions surveyed still needs to make progress before the deadline, although the survey’s readiness categories and the distinction between institutions that have not started and those that are not yet fully ready require clarification.
Yusuf said the CBN was analysing feedback from the industry and would consider adjustments where justified. She did not announce an extension to the January deadline.
The regulator also said its supervisory arrangements had been strengthened through the establishment of the Payments System Supervision Department in 2025 and the training of examiners responsible for oversight of the payment ecosystem.
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Localisation raises questions over cost and capacity
The expansion of data localisation to government institutions would increase the importance of domestic cloud capacity, cybersecurity, reliable electricity, data centre resilience and the availability of skilled technology professionals.
For local providers, the opportunity could extend beyond hosting government data to supplying cloud infrastructure, cybersecurity, disaster recovery and related digital services. However, the scale of that opportunity will depend on the procurement rules, technical requirements and implementation timetable adopted by the government.
Local storage alone would not eliminate all risks associated with digital infrastructure. Government institutions would still need adequate safeguards against cyberattacks, data loss, service outages and unauthorised access, alongside arrangements for backup, recovery and continuity of essential services.
The transition could also entail costs for institutions that currently rely on overseas cloud contracts or infrastructure, including migration expenses, system upgrades and the management of data across different platforms.
Neither NITDA nor the CBN disclosed a comprehensive estimate of the cost of implementing the wider localisation drive or the additional domestic infrastructure capacity required to support it.
The government’s own technology spending could help stimulate local supply if procurement is coordinated and domestic providers can meet the required standards. But the N3.8 trillion expenditure figure alone does not establish how much could be redirected to local cloud services or how quickly such a shift could occur.
For now, the financial sector remains the first test of Nigeria’s approach, with the January 1, 2027 deadline approaching. The subsequent extension of the framework to MDAs would mark a broader phase of the policy, bringing government technology procurement and public-sector data management into the country’s push for greater digital sovereignty.
Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.
