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By Chinenye Anuforo
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Nigeria’s digital economy is expanding rapidly, driven by fintech innovation, rising data consumption and increased broadband penetration. Yet, industry stakeholders warned that a foundational weakness could undermine long-term growth as too much of the country’s data is still hosted outside the country.
At a recent industry forum, Adebola Adefarati, Marketing Executive at Rack Centre and Rudman Mohammed of the Internet Exchange Point of Nigeria, argued that localising data infrastructure is critical to strengthening the nation’s competitiveness, reducing costs and improving service quality.
Nigeria has made notable progress in domestic internet traffic exchange. Internet traffic routed locally has grown significantly over the past decade, rising from just a few gigabits per second in the mid-2010s to multiple terabits per second in recent years. Between 60 and 70 per cent of internet traffic accessed in Nigeria is now exchanged locally through IXPN infrastructure.
However, Mohammed explained that most of this domesticated traffic comes from global technology companies that have established local interconnections. Major platforms such as Google, Meta, Microsoft and others deliver content through local nodes, contributing significantly to the rise in domestic traffic exchange.
The deeper concern lies with Nigerian-owned digital platforms. An analysis of some of the country’s highest-traffic websites showed that a large percentage of locally generated content is still hosted overseas. That includes betting platforms, media organisations and other high-demand digital services whose primary audience is within Nigeria.
The result is that a user in Lagos accessing a Nigerian platform may unknowingly have their request routed through servers in Europe or North America before returning to Nigeria. This round-trip routing increases latency, raises operational costs and exposes services to international transit vulnerabilities.
“When data is hosted locally, transactions are faster. Innovation becomes easier. Financial transfers, streaming, enterprise services everything improves,” Adefarati said.
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For Nigeria’s fintech-driven economy, milliseconds matter. Digital payments, trading platforms, streaming services and enterprise applications rely on speed and reliability. Hosting content and applications within Nigeria reduces delays and improves overall performance.
Beyond performance, local hosting strengthens digital sovereignty. Keeping data within national borders enhances regulatory oversight, reduces dependence on foreign infrastructure and improves resilience during global cable disruptions.
Mohammed also highlighted a broader structural issue: limited network diversity. Every network connected to the global internet operates under a unique Autonomous System Number (ASN), which allows it to independently manage routing policies. The number of ASNs in a country is widely regarded as a measure of internet ecosystem maturity.
Nigeria’s ASN density remains low relative to its population size. In several states, there are no locally based network operators with autonomous routing capability, leaving residents heavily dependent on mobile network operators for connectivity.
While mobile operators account for the overwhelming majority of internet access in Nigeria and have invested significantly in infrastructure, limited diversity in network operators reduces competition and can keep broadband costs elevated.
There are also economic barriers to expanding network diversity. The cost of acquiring transmission capacity within Nigeria can be high, with some industry estimates suggesting that data transport between Lagos and certain Nigerian cities may cost more than international routes. In addition, the cost of obtaining ASN and IP resources through AFRINIC can discourage smaller service providers.
Stakeholders are now calling for coordinated action involving regulators, service providers, data centres and content platforms. Greater collaboration with the Nigerian Communications Commission, incentives for local hosting, reduced licensing bottlenecks and expanded technical capacity building are among the measures proposed to deepen Nigeria’s digital infrastructure.
With increasing subsea cable capacity and expanding data centre investments, Nigeria has the foundation for a more resilient internet ecosystem. Industry leaders argued that the next step is ensuring that more Nigerian platforms host locally, more networks operate autonomously and more value is retained within the country’s digital borders.
As Nigeria positions itself as a leading technology hub on the continent, the message from stakeholders is clear: sustainable digital growth will depend not just on access to the global internet, but on building and keeping critical digital infrastructure at home.
