Nigeria Pushes Microsoft, Google And Amazon To Build More Cloud Infrastructure Locally

• More than 85% of Nigerian workloads now run on public cloud platforms, according to NITDA.

• Only 22% of Nigeria’s 1,000 most-accessed websites are hosted locally.

• Government wants global cloud providers to put more infrastructure inside Nigeria.

• Local capacity could affect how Nigerian businesses manage data, AI, and foreign exchange costs.

August 11, () — Nigeria is asking some of the biggest names in cloud computing to put more of their infrastructure inside the country.

Microsoft, Google and Amazon are among the global providers the government wants to see invest more deeply in Nigeria as demand for cloud services continues to grow.

NITDA Director-General Kashifu Inuwa said more than 85% of Nigerian workloads now run on public clouds. Yet only 22% of the country’s 1,000 most-accessed websites are hosted locally, compared with 34% across sub-Saharan Africa.

That difference matters because cloud computing has become part of the infrastructure behind everyday digital business in Nigeria. Banks, fintechs, online retailers, startups and government agencies increasingly depend on remote servers to store information and run applications.

Nigeria signed regulatory instruments for its National Sovereign Cloud Initiative with Galaxy Backbone on August 5. The framework is intended to establish standards for hosting more government and private-sector workloads within the country.

Foreign providers remain welcome under the plan. NITDA says it wants companies such as Microsoft, Google and Amazon to deploy infrastructure locally and work with Nigerian data-centre operators.

Nigeria’s approach has been shaped by how quickly its cloud dependence has grown.

The government’s 2019 Cloud First Policy encouraged public institutions to move away from maintaining separate server rooms and adopt cloud services.

For businesses, cloud computing offered an easier way to access computing capacity without buying and maintaining expensive infrastructure themselves.

That model helped digital companies grow quickly. It also created a market in which much of the computing infrastructure serving Nigerian users sits outside Nigeria.

Local hosting could change some of the costs involved.

A Nigerian company paying for cloud services from infrastructure abroad can face additional exposure to foreign exchange movements. More services hosted locally could create opportunities for naira-based pricing and reduce some of that pressure.

Domestic infrastructure would also create a larger market for companies providing data-centre services, networking, cybersecurity, cooling, power and other technical infrastructure. Also, AI is adding to the demand.

Nigerian companies are moving beyond simply experimenting with AI and beginning to build products around it. Those products need computing power to operate, particularly as businesses process larger amounts of data and use more sophisticated AI models.

Talent alone cannot support that expansion. Developers need access to the infrastructure on which their products can run.

Still, building more data centres in Nigeria comes with a familiar Nigerian problem. Power.

Data centres cannot operate on an electricity supply that disappears for hours at a time. Operators need stable power, backup systems, cooling and reliable connectivity.

Those costs can make local infrastructure considerably more expensive to build and operate.

Connectivity is another reason Nigeria wants greater control over its digital infrastructure.

In March 2024, damage to several undersea cables disrupted internet services across West Africa. Banks, telecom operators and digital businesses were among those affected.

Local hosting cannot prevent an undersea cable failure. It can, however, reduce dependence on infrastructure and services sitting entirely outside the country.

Data rules are also moving in the same direction.

Nigeria plans to require banks and fintechs to keep payment data within the country from 2027. That policy will increase demand for secure local infrastructure capable of handling sensitive financial information.

For Microsoft, Google and Amazon, Nigeria’s push comes at a time when cloud computing is becoming increasingly important to the country’s economy. Local infrastructure would put these companies closer to a large and growing customer base while giving them a stronger position as demand for cloud and AI computing expands.

Nigeria has to make the investment worthwhile, though.

Businesses will still compare local cloud services with international alternatives on price, reliability, security and performance. A server being located in Lagos or Abuja will not, by itself, persuade a fintech or bank to move its operations.

Success will depend on whether Nigeria can create an environment where building locally makes commercial sense for global providers and where local businesses actually benefit from having that infrastructure closer to home.

For a country whose digital economy is expanding faster than its physical technology infrastructure, the cloud is becoming too important to remain an almost entirely offshore story.