NIGERIA LOSES $3.5BN TO FOREIGN CLOUD SERVICES AS EXPERTS PUSH LOCAL INFRASTRUCTURE

Nigeria is losing an estimated $3.5 billion annually to foreign cloud service providers, with more than 80 per cent of the country’s sovereign data currently hosted outside its borders, the Chief Executive Officer of Digital Realty Nigeria and Co-Chair of the National Cloud Initiative Technical Working Group, Ike Nnamani, has said. Nnamani made the disclosure at the seventh Telecom Sector Sustainability Forum in Lagos, where industry stakeholders called for greater investment in digital infrastructure and a stronger strategy for developing Nigeria’s local cloud and data-centre capacity.

Nnamani said only about 30 per cent of Nigeria’s roughly 1,000 government agencies currently use cloud services, with government spending on such services estimated at about $1 billion annually. He explained that if the remaining 70 per cent of agencies moved their operations to cloud services within five years, government spending could rise to approximately $3.5 billion each year. He argued that keeping a larger share of that spending within Nigeria through local infrastructure could support investment, create jobs and reduce pressure on the country’s foreign exchange market.

The Digital Realty executive also warned that Nigeria’s heavy dependence on foreign digital infrastructure could create national security risks, particularly when sensitive government, financial and other critical information is stored outside the country. He noted that no major hyperscaler, including Amazon, Oracle, Meta and Microsoft, currently operates a data region in Nigeria, meaning some Nigerian data processing takes place abroad. He said the National Cloud Initiative was designed to encourage local hosting of critical information and reduce the risks associated with relying heavily on infrastructure located in other jurisdictions.

According to Nnamani, the initiative is built around four major areas covering regulation, implementation guidelines, governance and monitoring, and an investment guarantee framework. He said government would not directly operate the infrastructure but would establish policies and guidelines that encourage private-sector investment. Government procurement would also prioritise certified local cloud providers where they meet required security and service standards, while opportunities would emerge for Nigerian companies involved in cloud services, data migration and systems integration.

Other industry stakeholders at the forum called for increased investment in broadband infrastructure, rural connectivity and digital skills. The Executive Secretary and Chief Operating Officer of the Association of Licensed Telecommunications Operators of Nigeria, Ajibola Olude, identified infrastructure funding and the shortage of industry-ready digital professionals as key concerns. WTES Group Chief Operating Officer Chidi Ajuzie also said broadband penetration remained around 57 per cent despite mobile penetration of about 90 per cent, while high right-of-way charges, taxation, licensing costs and expensive capital continue to affect digital infrastructure development. Participants estimated that Nigeria could require about $100 billion over the next 30 years to close its digital infrastructure gap and urged coordinated action to strengthen cloud computing, broadband, artificial intelligence, cybersecurity and other areas of the digital economy.