Telcos Support CBN’s Data Localization Directive for Banks and Fintechs, Claim Nigeria Has Capacity

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has expressed support for the Central Bank of Nigeria’s (CBN) directive that requires banks and fintechs to store payment transaction data locally.

ALTON Chairman, Mr. Gbenga Adebayo, made the statement in an interview with the News Agency of Nigeria (NAN) in Lagos yesterday.

The directive, issued by the CBN, mandates that banks, fintechs, and other payment service providers keep payment transaction data generated in Nigeria on local servers starting January 1, 2027.

It is part of a broader effort to strengthen oversight of the country’s rapidly expanding digital payments ecosystem.

Adebayo said that data sovereignty means a country must manage the entire data value chain, including collection, management, storage, and integrity assurance.

“We cannot continue to outsource that to other jurisdictions,” he said. “The more we host our data locally, the better for us,” he added.

He argued that local hosting would allow Nigeria to manage data end‑to‑end and ensure the integrity of critical information. He noted that hosting payment data abroad increases communication requirements, latency, and retrieval costs.

“For every transaction involving data hosted outside our shores, communication has to take place from your location to the host and back,” he said. “It increases latency and also increases the cost of data retrieval,” he added.

The ALTON chairman described the directive as an important first step toward achieving national data sovereignty.

He dismissed concerns about infrastructure readiness, pointing out that Nigeria already has significant data centre capacity. Several Nigerian‑owned facilities currently host data for organisations operating from other jurisdictions.

“I’m happy to say that we have a lot of data centres owned and managed by Nigerians that are hosting data from other jurisdictions,” he said. “If people overseas can host their data here, why can’t we host our own data here?” he queried.

Adebayo argued that local hosting would reduce dependence on foreign infrastructure while improving national control over data security. He said that concerns about security and reliability should not justify continued reliance on foreign hosting providers.

“No one can protect your house better than yourself,” he said. “You have more at stake in terms of security and safety than somebody else hosting your data,” he added.

The telecom industry leader also highlighted the cost implications of local hosting. He said organisations that host data locally would pay in local currency rather than foreign currency, which would help reduce exposure to exchange‑rate pressures and lower long‑term operating costs.

Adebayo said Nigeria currently has about six Tier III data centres, with additional facilities under development. He stressed that capacity is more important than the number of facilities.

“It’s not just about the numbers; it’s about the capacity of what they can host. So far, we can,” he said.

He urged stakeholders to accelerate efforts toward domestic data hosting and management. “The earlier we begin to domesticate our data hosting and data management, the better for us,” Adebayo added.