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Nigeria is losing an estimated $3.5 billion annually to foreign cloud service providers, with more than 80 per cent of the country’s sovereign data currently hosted outside its borders, the Chief Executive Officer of Digital Realty Nigeria and Co-chair of the National Cloud Initiative Technical Working Group, Ike Nnamani, has disclosed.
Nnamani made the disclosure at the 7th Telecom Sector Sustainability Forum (TSSF 7.0), organised recently by Business Remarks in Lagos, where industry stakeholders called for a rethink of Nigeria’s digital infrastructure strategy to attract investment and accelerate innovation.
He said only about 30 per cent of Nigeria’s approximately 1,000 government agencies currently use cloud services, with annual spending estimated at about $1 billion.
According to him, if the remaining 70 per cent migrate to cloud services within five years, annual government spending could rise to about $3.5 billion.
Nnamani said Nigeria could retain much of the economic value by developing local cloud infrastructure and capacity.
He described the country’s dependence on foreign data infrastructure as a national security risk, warning that a foreign government could potentially restrict access to Nigerian data hosted within its jurisdiction.
“This is the reality of the world we live in,” he said, stressing that digital infrastructure had become a strategic asset and potential target during conflicts.
Nnamani said no major hyperscaler, including Amazon, Oracle, Meta and Microsoft, currently operates a data region in Nigeria, forcing some data processing to take place outside the country.
He noted that despite having Africa’s largest population and significant digital market potential, Nigeria was yet to translate its size into a commensurate digital economy.
“We are the biggest in Africa from a telephonic standpoint, but when you check internet traffic flow, we are behind South Africa and even Kenya,” he said.
He said the National Cloud Initiative was designed to ensure that critical data, particularly financial and national security information, was hosted locally.
The initiative, he explained, has four key pillars covering regulation, implementation guidelines, governance and monitoring, and an investment guarantee framework.
Nnamani said government procurement would prioritise certified local cloud providers, while the government itself would provide the policy and regulatory framework rather than operate the infrastructure.
“The government is not going to run this, but it’s going to create all the enabling policies and guidelines to make it happen while the private sector takes the initiative to implement it,” he said.
He urged Nigerian entrepreneurs to take advantage of emerging opportunities in cloud services, data migration and systems integration.
Nnamani also assured that local providers would be required to meet international standards for security and service quality.
The Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, said the telecom industry had performed significantly in its more than 25 years of existence.
He urged stakeholders to highlight the sector’s contributions to education, society and national development, while calling for continued collaboration as the industry responds to changing global realities.
ALTON’s Executive Secretary and Chief Operating Officer, Ajibola Olude, called for increased investment in infrastructure, rural connectivity and digital skills.
Olude said Nigeria needed a stronger pipeline of industry-ready digital professionals, while safety concerns continued to restrict network deployment in some rural communities.
He also raised concerns over the high cost of capital, with interest rates exceeding 30 per cent, and urged banks to treat telecommunications as critical infrastructure.
The Chief Operating Officer of WTES Group, Chidi Ajuzie, said broadband penetration remained around 57 per cent despite mobile penetration of about 90 per cent.
He identified inadequate capital, high right-of-way charges and regulatory fragmentation as major obstacles to fibre deployment.
Ajuzie said some states still charge as much as N10,000 per metre for right-of-way against the agreed N145 benchmark, describing the charges as a major disincentive to investment.
He called for a shift towards policies that recognise the long-term economic benefits of broadband infrastructure and cited India’s BharatNet programme as an example Nigeria could learn from.
Industry experts at the forum said Nigeria could require approximately $100 billion over the next 30 years to close its digital infrastructure deficit.
They estimated that the country could take another 10 to 15 years to achieve greater digital infrastructure parity with developed markets without accelerated investment.
The panel identified upfront taxation, spectrum fees, licensing charges and right-of-way costs as major barriers, noting that such costs could consume as much as 50 per cent of capital expenditure in some cases.
They called for a clearer framework for infrastructure sharing, better data on existing infrastructure and increased investment in digital literacy, artificial intelligence, machine learning and cloud computing.
The experts also urged the government to create policies that support local technology companies and smaller operators, while calling for stronger cybersecurity and business continuity measures.
The convener and Managing Editor of Business Remarks, Bukola Olanrewaju, said the forum was aimed at moving beyond rhetoric to develop practical solutions to Nigeria’s digital infrastructure deficit.
The forum, held in Lagos with the theme, “Rethinking Nigeria’s Digital Infrastructure Strategy to Attract Investment and Drive Innovation,” concluded with stakeholders calling for coordinated action by government, regulators, operators and investors to expand connectivity and unlock the economic opportunities in Nigeria’s digital sector.
