Nigeria's CBN: Payment Firms Must Host Data Locally to Boost Investment

• Nigeria's Central Bank has issued a directive requiring payment firms to host transaction data locally.
• The move is expected to create demand for world-class data centres, cloud infrastructure, and cybersecurity services.
• Galaxy Backbone is well-positioned to support banks and fintechs in meeting the new data-localisation requirements.

This directive reinforces that vision and our strong convictions around digital sovereignty. It encourages us to build locally, innovate locally and create more value within Nigeria, while giving citizens and businesses greater confidence that their data is protected within our legal and regulatory environment.

Nigeria's Central Bank (CBN) has issued a directive requiring payment firms to host transaction data locally, sparking a wave of investment opportunities in the country's digital infrastructure. The move is seen as a strategic statement on Nigeria's position in the digital economy, with far-reaching implications for the nation's sovereignty and economic growth. According to Professor Ibrahim Adeyanju, Managing Director of Galaxy Backbone, this directive will create demand for world-class data centres, cloud infrastructure, cybersecurity services, fibre connectivity, and digital skills, leading to increased investment, innovation, and job creation. This development may require Nigerian banks and fintechs to review their data hosting arrangements and consider partnering with local providers like Galaxy Backbone to ensure compliance with the new regulations.

The CBN's directive is not just a regulatory requirement, but a catalyst for growth in Nigeria's digital infrastructure sector. By keeping financial transaction data within the country, Nigeria strengthens its digital sovereignty, improves regulatory oversight, and gains greater control over critical infrastructure. This, in turn, can lead to increased investment in data centres, cloud services, cybersecurity, fibre connectivity, and digital skills, creating a virtuous cycle of growth and development. As Professor Adeyanju notes, 'digital infrastructure is the foundation of national development,' and this directive reinforces that vision, encouraging innovation and value creation within Nigeria.

The CBN's directive is part of a broader effort to promote digital sovereignty in Nigeria. The country has made significant progress in building its data centre and cloud capacity over the years, with investments from both public and private sectors. However, demand for digital infrastructure is evolving rapidly, driven by fintech innovation, artificial intelligence, cloud adoption, and the digitisation of government services. To meet tomorrow's needs, Nigeria must continue to expand and modernise its infrastructure, including the acquisition of new data centres like the one Galaxy Backbone is currently completing in Lagos.

This development may require Nigerian banks and fintechs to review their data hosting arrangements and consider partnering with local providers like Galaxy Backbone to ensure compliance with the new regulations.

Source: Original reporting via Galaxy Backbone CEO