The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has said that the latest Central Bank of Nigeria’s directive on local hosting of payment transaction data would help Nigerian banks and fintechs cut their exposure to foreign exchange volatility.
ALTON Chairman, Gbenga Adebayo, made the case in an interview with the News Agency of Nigeria in Lagos on Saturday, while expressing support for the directive.
The CBN directive requires banks, fintechs and other payment service providers to store payment transaction data generated in Nigeria on local servers from January 1, 2027, as part of broader efforts to strengthen regulatory oversight of the country’s fast-growing digital payments ecosystem.
What Adebayo is saying
Adebayo said the currency benefit of local hosting extends beyond simple cost savings into reduced long-term operating risk for financial institutions.
He argued that organisations hosting data locally would pay in naira rather than foreign exchange, helping reduce exposure to exchange rate pressures.
- “Organisations hosting data locally would pay in local currency rather than foreign exchange,” he said
- “This would help reduce exposure to exchange rate pressures and lower long-term operating costs,” he added.
Beyond the financial argument, Adebayo framed local hosting as a matter of national data sovereignty, which he said requires countries to take full responsibility for their data value chain, covering collection, management, storage and integrity assurance.
- “We cannot continue to outsource that to other jurisdictions. The more we host our data locally, the better for us,” he said.
He also pointed to performance costs tied to hosting data abroad, noting that every transaction routed to a foreign server adds communication overhead.
- “For every transaction involving data hosted outside our shores, communication has to take place from your location to the host and back. It increases latency and also increases the cost of data retrieval,” he said.
On security, Adebayo argued that local control offers stronger protection than relying on foreign providers.
- “No one can protect your house better than yourself. You have more at stake in terms of security and safety than somebody else hosting your data,” he said.
More insights
Adebayo dismissed concerns about Nigeria’s infrastructure readiness for the directive, pointing to existing data centre capacity already serving international clients as evidence the market can absorb the shift.
- “I’m happy to say that we have a lot of data centres owned and managed by Nigerians that are hosting data from other jurisdictions. If people overseas can host their data here, why can’t we host our own data here?” he asked.
He explained that Nigeria currently has about six Tier III data centres, with additional facilities under development, but stressed that hosting capacity matters more than the raw number of facilities.
- “It’s not just about the numbers; it’s about the capacity of what they are able to host. So far, we are able to,” he said.
What you should know
Nairametrics earlier reported that the Central Bank of Nigeria (CBN) has ordered banks, fintech companies, mobile money operators, and other payment service providers to keep all payment transaction data generated in Nigeria within the country.
- The directive was issued in a circular released on June 15 and signed by Rakiya O. Yusuf, Director of the CBN’s Payments System Supervision Department.
- The apex bank said all affected institutions are expected to achieve full compliance with the directive by January 1, 2027.
