The Central Bank of Nigeria’s (CBN) latest directive requiring all payment-related data to be stored and processed within the country has triggered a fresh wave of concern across Nigeria’s fintech ecosystem, raising questions around infrastructure readiness, disaster recovery resilience, migration risk, and the long-term cost of compliance.
In a circular released on Monday, June 15, 2026, the apex bank directed that all institutions facilitating payments in Nigeria must ensure that data generated within the financial system is hosted and managed domestically. The policy is expected to take effect from January 2027, giving banks, payment companies, and fintech operators roughly six months to comply.
While the CBN says the move is aimed at strengthening the integrity, sovereignty, and resilience of Nigeria’s payments infrastructure, fintech executives argue that the directive could introduce operational strain if the country’s local data ecosystem is not yet equipped to absorb the scale of migration required.
Local data centres have not been tested at scale
Most fintechs currently rely on global cloud infrastructure providers such as Amazon Web Services (AWS) and Microsoft Azure for transaction processing, fraud detection, and customer data storage.
Under the new directive, companies will still be able to work with cloud infrastructure providers, but those providers must ensure data residency within Nigeria’s borders. That effectively pushes workloads away from foreign regions and into domestic data centres operated by firms such as Equinix’s MDXi, Rack Centre, Open Access Data Centres, and Kasi Cloud, as well as telco-backed facilities from MTN Nigeria and Airtel Africa.
However, for many operators, the concern is not the availability of local infrastructure but whether existing infrastructure can reliably meet the scale, complexity, and uptime requirements of Nigeria’s fast-growing payments sector.
Adedapo Sobayo, co-founder and CTO of Rank, says the challenge lies in capacity, reliability, and the risk of systemic disruption if migration is rushed.
“Of course, there are data centres in Nigeria, but the problem I have is the processing capacity of these data centres. The biggest companies in Nigeria are financial institutions, so what’s the quality of service that these data centres can offer?” he opines.
Sobayo notes that while Nigeria has seen an expansion in data centre investments in recent years, including new builds and capacity upgrades from Equinix’s MDXi, Rack Centre, OADC, Kasi Cloud, MTN Nigeria, and Airtel Africa, many fintechs have not yet stress-tested these facilities at production scale.
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This means that while capacity exists on paper, real-world performance has not been tested. This is critical in a market like Nigeria, where the payments ecosystem processes over 14 billion transactions annually across cards, transfers, USSD, and mobile wallets. Even minor disruptions in latency or uptime can quickly cascade into widespread service degradation.
Sobayo warns that a large-scale migration from existing storage options to domestic infrastructure without rigorous testing could risk destabilising services relied on by millions of users.
Beyond capacity, reliability and resilience remain major concerns. Global cloud providers have spent decades building redundancy systems, multi-region failovers, and automated recovery mechanisms. Local infrastructure, on the other hand, is still maturing.
This concern is echoed by Musa Ganiyu, CEO of Payvessel, who highlights that the policy appears narrowly focused on payment transaction data rather than the broader infrastructure layer that supports financial systems, which could make the transition smoother. According to him, one of the most critical gaps is disaster recovery.
“The main problem is going to be disaster recovery. If a major incident happens on a local data centre where you host your data, and there’s no backup on a foreign server, that’s going to be a big problem,” he explains.
Ganiyu adds that Nigeria’s data centre geography presents another structural limitation. Most facilities are concentrated in Lagos, which reduces the availability of geographically distributed availability zones that companies typically rely on to hedge against outages.
Availability zones are physically separate data centre clusters designed to ensure that if one location fails, services can automatically failover to another. The concentration of data centres in Lagos limits the use of availability zones as a failsafe option.
Sobayo also emphasises that infrastructure design matters as much as capacity. Data centres, he notes, are often built with a specific purpose in mind. Some may be optimised for hyperscale cloud workloads, others for colocation or enterprise hosting, and these differences directly affect performance under financial workloads.
He added that even globally, infrastructure design remains highly specialised, with compute, networking, and inference layers tightly aligned to workload demands.
One of the most immediate operational challenges highlighted by fintech operators is data migration. Moving large-scale financial systems from foreign cloud environments into domestic infrastructure involves far more than transferring files. It requires re-architecting systems, replicating databases, validating integrity across environments, and ensuring uninterrupted transaction processing.
Sobayo cautions that poorly executed migrations could result in downtime ranging from hours to weeks, particularly if fallback systems are not properly structured.
Cost remains a key concern
Global cloud providers have, over time, reduced entry barriers for startups through cloud credits and infrastructure support. These incentives have helped fintechs, in particular, to scale without heavy upfront infrastructure investment.
Similar support from local operators has been more limited. MTN offered infrastructure credits through its startup accelerator programme in 2025, but access was restricted to a handful of startups, leaving most early-stage companies reliant on commercial pricing from day one.
Sobayo notes that while large enterprises may be able to negotiate predictable pricing structures with local providers, smaller startups could face higher marginal costs.
Support infrastructure is another frequently cited gap. Global cloud providers offer reliable 24/7 technical support, automated incident response, and extensive developer tooling. Local providers are improving, but still building comparable layers of operational maturity.
For fintechs, where downtime can translate directly into financial loss and customer dissatisfaction, responsiveness and reliability of support can be as important as compute capacity.
Despite these concerns, Sobayo believes the six-month transition window outlined by the CBN is achievable if institutions adopt a structured migration approach and find the right infrastructure partners early.
