Nigeria’s banks and fintech companies are raising concerns over the Central Bank of Nigeria’s six-month deadline for moving payment transaction data onto local infrastructure, warning that a rushed transition could create operational risks for the country’s digital payments system.
The CBN’s directive requires financial institutions and payment service providers to ensure that payment transaction data generated in Nigeria is stored and managed within the country from January 1, 2027.
The policy is aimed at strengthening regulatory oversight, data sovereignty and the resilience of Nigeria’s financial system. However, industry operators say the short implementation period could make it difficult to complete complex migrations without affecting critical services.
Banks and fintechs face migration pressure
The directive affects banks, fintech companies, digital banks, mobile money operators and other institutions involved in facilitating payments in Nigeria.
While many major banks have already localised their payment data, fintechs and newer financial institutions that still rely heavily on international cloud providers face a more complicated transition.
Krishnan Ranganath, chief executive officer of UniCloud Africa, said most Tier-1 and Tier-2 banks had already moved their data locally, leaving fintechs and new-generation banks as some of the institutions facing greater migration pressure.
“As I understand it, the majority of Tier-1 and Tier-2 banks have already localized their data. The area to watch is fintechs and new generation banks who are still hosting data abroad,” he said.
Six months seen as a tight timeline
Industry players say the challenge is not simply transferring databases from foreign servers to Nigerian facilities.
Financial institutions have to consider existing contracts with global cloud providers, cybersecurity, disaster recovery, connectivity, encryption and the ability of local infrastructure to maintain uninterrupted services.
“There are existing contracts, so moving comes with real financial implications,” Ranganath said.
He also highlighted concerns over confidence in local infrastructure.
“There is also a major trust factor. Institutions want assurance around infrastructure resilience and cybersecurity,” he said.
Ranganath said many industry participants privately consider the six-month window highly ambitious.
“The directive raises important questions around infrastructure readiness, disaster recovery capabilities, migration complexity and long-term financial implications,” he said.
Local infrastructure has available capacity
Despite the concerns over implementation, industry operators say Nigeria has data-centre capacity that could support the migration.
Estimates indicate that complying with the CBN requirement could create additional demand of between 14 megawatts and 30 megawatts of IT capacity, depending on the growth and migration scenario.
Ranganath said existing commercial data centres have about 20MW of available IT capacity, with another 15MW to 20MW potentially available through additional fit-outs.
“Existing data centres can handle these capacities,” he said.
Other industry experts have similarly argued that Nigeria’s data-centre infrastructure has enough capacity, although specialised technical talent and fibre-security challenges could complicate the migration.
Payment reliability remains the biggest concern
The volume of digital transactions in Nigeria means even a temporary disruption could have consequences for consumers and businesses.
Nigeria recorded N284.99 trillion in electronic payment transactions in the first quarter of 2025, highlighting the scale of financial activity that depends on reliable digital infrastructure.
Ayobami Olajide, head of research at Kickoff Africa, stressed the importance of reliability during the transition.
“One percent failure rate is not acceptable,” he said.
Banks therefore have to plan migrations carefully so that moving workloads to local infrastructure does not affect payment processing, transfers, card transactions or other digital financial services.
Global cloud providers remain important
Many Nigerian financial institutions currently depend on international cloud platforms such as Amazon Web Services and Microsoft Azure.
Moving workloads locally could therefore involve renegotiating contracts, changing infrastructure arrangements and redesigning systems that were originally built around international cloud environments.
For smaller fintechs, the financial impact could be particularly significant because they may not have the same bargaining power or technical resources as large banks.
Fibre infrastructure is another risk
Industry stakeholders have also identified Nigeria’s fibre infrastructure as an area that requires attention.
Localising payment systems means that more critical financial operations will depend on domestic connectivity. Any major disruption caused by fibre cuts, vandalism or other infrastructure failures could affect financial services.
Daniel Babatunde, chief technology officer of Patrick Gold Microfinance Bank, has called for stronger protection of fibre and data-centre infrastructure to reduce the risk of service interruptions.
Data localisation could boost Nigeria’s data-centre industry
Despite the concerns, the policy could create opportunities for Nigeria’s data-centre and cloud-computing sector.
Local providers such as Equinix’s MDXi, Rack Centre, Open Access Data Centres and other domestic infrastructure operators are positioned to benefit as banks and fintechs move more workloads into the country.
Open Access Data Centres chief executive Ayotunde Coker said the policy was already generating greater interest in local colocation and cloud services and could encourage additional investment in data-centre capacity and supporting infrastructure.
What happens next
The CBN requirement takes effect on January 1, 2027, leaving affected institutions with a limited window to complete their preparations.
The central challenge for the industry is now balancing regulatory compliance with the need to keep Nigeria’s rapidly expanding digital payments system stable.
While available data-centre capacity suggests the migration is technically possible, financial institutions still have to address contracts, cybersecurity, disaster recovery, connectivity and the complexity of moving critical workloads.
The outcome will determine whether Nigeria’s data-localisation push strengthens the country’s financial infrastructure without creating new risks for the payments system.
