Five Nigerian cloud companies are actively lobbying the government to position themselves as the preferred choice for hosting sensitive government data. This development aligns with the 2019 National Cloud Computing Policy, which advocates for prioritizing local cloud service providers.
Government Engagement and Cost Considerations The ongoing discussions, revealed by sources close to TechCabal, signify a concerted effort to address rising cloud service costs exacerbated by the devaluation of the naira. Some government agencies reportedly spend up to $500,000 monthly on cloud services. By shifting to local providers, the government could potentially mitigate these escalating expenses while supporting domestic tech enterprises.
Potential Consortium and Industry Collaboration In an intriguing twist, a few local cloud companies are contemplating the formation of a consortium to strengthen their position and negotiate better terms. Talks for this consortium began in April 2024, and while the names of the companies involved remain undisclosed, the move reflects a strategic approach to unify resources and expertise.
Expanding the Local Data Hosting Agenda Beyond government data, another group of local cloud providers is targeting Mobile Virtual Network Operators (MVNOs) and pension fund administrators (PFAs) to encourage the hosting of data within Nigeria. This initiative, disclosed by two individuals familiar with the matter, aims to ensure that critical and sensitive information is stored locally, enhancing data security and compliance with national regulations.
Implications for the Nigerian Tech Ecosystem If successful, these efforts could mark a pivotal shift in Nigeria’s cloud services landscape. The increased adoption of local cloud options not only promises cost savings but also supports the growth of indigenous tech companies. Additionally, local data storage can enhance data sovereignty, ensuring that sensitive information remains within the country’s borders and is governed by Nigerian laws.
Challenges and Future Prospects Despite the potential benefits, local cloud providers face challenges such as building robust infrastructure, gaining the trust of large organizations, and competing with established international players. However, the collaborative efforts and government backing could provide the necessary impetus to overcome these hurdles.
