The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has commended the Central Bank of Nigeria (CBN) for its latest directive on the local hosting of payment transaction data.
Noting that the new policy when ahered to will significantly help Nigerian banks and fintechs reduce their exposure to foreign exchange volatility, the Chairman of ALTON, Engr. Gbenga Adebayo, declared full support for the regulatory policy.
The directive issued by the apex bank mandates that all banks, fintech firms, and other payment service providers must store payment transaction data generated within Nigeria on local servers starting January 1, 2027.
This policy forms part of broader efforts by the CBN to strengthen regulatory oversight and enhance security within the country’s fast-growing digital payments ecosystem.
Adebayo explained that the currency benefits of local hosting extend far beyond simple cost savings, offering a substantial reduction in long-term operating risks for financial institutions.
He argued that organizations hosting their data locally will pay service providers in Naira rather than in foreign currencies, which will effectively shield them from persistent exchange rate pressures and lower their overall overhead.
Beyond the financial advantages, the ALTON Chairman framed local hosting as a vital step toward national data sovereignty.
He emphasized that Nigeria must take full responsibility for its data value chain, which encompasses data collection, management, storage, and integrity assurance, rather than continuously outsourcing these critical functions to foreign jurisdictions.
Adebayo also pointed to the hidden performance costs tied to offshore data storage, noting that routing local transactions to foreign servers adds significant communication overhead.
This process increases transaction latency and elevates the financial cost of data retrieval for domestic institutions. On the security front, he argued that domestic control offers stronger protection than relying on foreign providers, stating that a nation always has more at stake in securing its own data than an external host.
Dismissing concerns regarding Nigeria’s infrastructural readiness for the impending transition, Adebayo pointed to the robust capacity of existing local data centers that already serve international clients as evidence that the domestic market can seamlessly absorb the shift.
He revealed that Nigeria currently boasts about six functional Tier III data centers, alongside several other facilities under development.
He stressed that the ultimate success of the policy depends on the overall storage capacity of these facilities rather than the raw number of structures available, expressing absolute confidence that current local capacity is fully capable of handling the demands of the financial sector.