Nigeria is accelerating efforts to bring more of its cloud infrastructure onshore, aiming to reduce dependence on overseas systems and retain a greater share of its digital economy's value domestically.

More than 85% of Nigerian workloads currently run on public clouds, according to Kashifu Inuwa, director-general of the National Information Technology Development Agency (NITDA). Nigeria also hosts only 22% of its 1,000 most-accessed websites locally, falling below the Sub-Saharan Africa average of 34%.

The government's strategy centres on localising the systems that power its digital economy — reducing exposure to foreign infrastructure, keeping technology spending within the country, and making critical services more resilient.

National Sovereign Cloud Initiative

The push is being formalised through the National Sovereign Cloud Initiative, whose regulatory instruments were signed with Galaxy Backbone Limited — a government-owned ICT infrastructure and shared services provider — on August 5, 2026. The framework establishes policy, technical, and quality requirements for hosting more digital services within Nigeria.

Inuwa said the initiative builds on Nigeria's 2019 Cloud First Policy, which sought to shift government institutions away from standalone server rooms and data centres with high operating costs toward cloud-based services.

"The idea then was, how can we encourage government agencies to stop spending money on building technology and let them patronise data centre providers, both local and international providers," Inuwa told TechCabal in an interview in Abuja on Wednesday, on the sidelines of the two-day summit where the National Sovereign Cloud Initiative was signed.

However, the policy produced an unintended consequence: government agencies and businesses migrated rapidly to public clouds without a corresponding expansion of domestic cloud infrastructure.

"People just started going to public cloud," Inuwa said. "Yes, it's easier to move to public cloud, but also we need to encourage building the local ecosystem."

This shift has raised concerns about how much of the economic value generated by Nigeria's digital economy is being captured outside the country.

"Imagine localising and keeping all that content locally," he said. "The kind of innovation and economic activities you can create."

Economic Rationale

The government's argument is partly economic. Over 90% of Nigeria's digital data and enterprise workloads are currently hosted on offshore servers, resulting in an estimated $850 million in annual capital flight as local banks, fintechs, and enterprises pay foreign cloud providers in US dollars.

This foreign-currency exposure leaves domestic businesses vulnerable to severe foreign exchange volatility and geopolitical risks. Expanding Nigeria's domestic cloud and data-centre market — projected to reach $782 million by 2031 — would allow companies to pay in local currency (Naira), retaining hundreds of millions of dollars locally while creating high-value jobs in network engineering, software, cybersecurity, and content delivery.

"Imagine if you are paying in naira, jobs will be created in Nigeria," Inuwa said. "Nigerians will be building content locally," while investment in large data centres would create additional employment and business opportunities.

Resilience and Infrastructure Risks

Inuwa said the push to localise cloud infrastructure is also about making Nigeria's digital services more resilient. As more critical services move online, heavy reliance on infrastructure and connectivity outside the country can leave businesses and essential services exposed when international links are disrupted.

In March 2024, four major undersea cables serving West Africa — MainOne, WACS, SAT-3, and ACE — were damaged simultaneously in waters off Côte d'Ivoire. The outages disrupted internet connectivity across the region, exposing the risks of Nigeria's reliance on international infrastructure and triggering widespread disruptions for businesses and essential services.

"For us, sovereignty is not about protectionism," Inuwa said. "It's not about closing our doors against the big cloud service providers, but it's about asking them to come and build with us in Nigeria."

The objective is to create a more resilient domestic infrastructure network capable of maintaining services even when individual locations or connections fail.

"The big picture is how can we build like a digital triangle in Nigeria, where we create resilience and service assurance," Inuwa said. "Even if there is an earthquake in one location, everything can seamlessly fall over to another location."

Nigeria could also strengthen its position as a regional cloud hub for West and Central Africa, leveraging its large internet market and growing subsea cable capacity to attract hyperscale cloud facilities and carrier-neutral data centres.

Engaging Hyperscalers

NITDA said the policy is not intended to displace public cloud services or exclude global providers from the Nigerian market. Instead, the agency wants major cloud providers — or hyperscalers — to deploy and operate more infrastructure locally.

Inuwa said the government had previously granted waivers allowing institutions to use public cloud services but eventually began pressing providers for clearer localisation plans.

"We can't continue giving you waivers," he said. "We need to have a roadmap on when you are going to localise some of this infrastructure in Nigeria."

One obstacle was the argument from some hyperscalers that Nigerian data centres did not meet the technical requirements needed to support their infrastructure. To address these concerns, NITDA brought hyperscalers and local data-centre operators together at the summit to discuss the technical and regulatory barriers to local deployment.

The discussions led to a technical working group comprising local providers and global cloud companies, which developed the framework for the sovereign cloud initiative. The framework includes guidelines covering data classification, technical requirements for cloud service providers, and digital quality assurance. Providers will need to meet defined standards and certifications to host certain categories of services.

Addressing Cost Barriers

The initiative also seeks to address cost — a major barrier to local adoption — as cloud infrastructure in Nigeria has historically been more expensive than hosting workloads abroad, making overseas public cloud providers more attractive to startups and other businesses.

NITDA and Galaxy Backbone are working on a plan to offer startups cloud services at lower costs and allow them to pay in naira, according to Inuwa. He expects greater local capacity to increase competition and put downward pressure on prices.

"Today, because of lack of competition, that's why the hyperscalers choose their own price," Inuwa said. "But if there is competition in terms of capacity and availability locally, people will go and buy where they can get cheaper."

The government is considering incentives to attract investment in local cloud infrastructure, although Inuwa did not specify what those incentives would be. He said the sovereign cloud governance committee will determine where government support is needed as implementation begins, with its strategy focused on policy and regulation, funding and investment, skills, innovation and local content, cybersecurity, and digital trust.

Funding will be critical to expanding domestic capacity. Inuwa pointed to Ministry of Finance Incorporated (MoFi) investment in Galaxy Backbone Limited and its seat on the board of the public company as an example of how public capital can support infrastructure development.

Regional Hub Ambitions

Ibrahim Adeyanju, managing director and chief executive of Galaxy Backbone, said the initiative could help attract more investment into Nigeria's digital infrastructure and strengthen its position in the regional data-centre market.

"More importantly, the initiative has the potential to catalyse increased investment in data centre infrastructure across the country," he said, "positioning Nigeria as the leading regional hub for data centres serving West and Central Africa."

For Nigerian startups, the immediate test will be whether local providers can offer the price, capacity, and performance needed to compete with established global cloud platforms. For government agencies and larger businesses, the bigger question is whether domestic infrastructure can support increasingly demanding workloads, including AI, while maintaining the reliability, security, and resilience required for critical services.

"Our goal is not to take the public cloud away, but to get the hyperscalers localised," Adeyanju said.