Telcos Throw Weight Behind CBN’s Local Data Hosting Directive for Financial Institutions

Industry Supports Push for Data Sovereignty

THE Association of Licensed Telecommunications Operators of Nigeria (ALTON) has endorsed the Central Bank of Nigeria’s directive requiring banks, fintech firms and other payment service providers to host payment transaction data generated within the country on local servers from January 1, 2027.

The directive forms part of the apex bank’s broader efforts to strengthen regulatory oversight, improve data governance and enhance the resilience of Nigeria’s rapidly expanding digital payments ecosystem.

Speaking in Lagos, ALTON Chairman, Gbenga Adebayo, described the policy as a significant step towards strengthening Nigeria’s control over critical digital infrastructure and protecting sensitive financial information.

He said countries seeking to build sustainable digital economies must take responsibility for every stage of the data value chain, including collection, storage, management and integrity assurance.

Local Hosting to Improve Efficiency

Adebayo argued that retaining payment transaction data within Nigeria would reduce dependence on foreign infrastructure while improving operational efficiency.

According to him, hosting data outside the country requires information to travel across international networks whenever transactions are processed or records retrieved, resulting in higher communication costs and increased latency.

He explained that keeping payment data on domestic servers would shorten response times, lower data retrieval expenses and improve the overall performance of financial technology platforms.

The ALTON chairman stressed that local data hosting would also enable regulators and service providers to exercise greater oversight over critical national financial infrastructure.

Nigeria Has Capacity to Host Its Own Data

Addressing concerns about whether Nigeria possesses sufficient infrastructure to implement the directive, Adebayo maintained that the country already has robust data centre capacity capable of supporting the policy.

He noted that several Nigerian-owned Tier III data centres currently provide hosting services for organisations operating outside the country, demonstrating their ability to meet international standards.

According to him, if foreign organisations can entrust their data to Nigerian facilities, there is little justification for domestic financial institutions continuing to rely on overseas hosting providers.

He added that additional data centres are currently under development, further expanding the country’s hosting capacity ahead of the implementation deadline.

Economic and Security Benefits

Beyond technical considerations, Adebayo highlighted the financial advantages of local hosting.

He said organisations storing data domestically would pay for hosting services in naira rather than foreign currencies, reducing exposure to exchange rate volatility and lowering long-term operational costs.

He also argued that local hosting strengthens national data security by allowing critical financial information to remain under Nigerian jurisdiction.

According to him, safeguarding sensitive payment data is ultimately best achieved when the infrastructure supporting it is located within the country and subject to domestic regulatory oversight.

With the implementation date set for January 2027, the telecom industry believes the directive will strengthen Nigeria’s digital economy while encouraging greater investment in local data infrastructure and supporting the country’s ambition to become a regional technology hub.