CBN directive drives investment in data centres

CBN directive drives investment in data centres

The Central Bank of Nigeria’s directive requiring payment transaction data generated within the country to be stored locally is expected to create new opportunities for domestic technology firms and accelerate investment in digital infrastructure, according to the co-founder of GFA Technologies Group, Adebola Omololu.

The CBN recently directed banks, fintech companies, mobile money operators and other payment service providers to ensure that payment transaction data generated within Nigeria is stored and managed locally in line with applicable data protection regulations, with full compliance expected by January 1, 2027.

Omololu said in a statement on Monday that the policy could create long-term demand for local data centres, cloud services and other digital infrastructure.

“The CBN Data Localisation Directive should therefore be viewed not simply as a compliance requirement, but as a catalyst for Nigeria’s next phase of digital infrastructure development,” Omololu said.

According to him, the directive has the potential to create measurable demand for domestic digital infrastructure by requiring sensitive financial data to remain within Nigeria.

He noted that the implications of the policy extend beyond financial institutions to investors, development finance institutions, telecommunications companies, cloud providers and data centre operators.

“The answer matters, not only to banks and fintechs, but also to policymakers, investors, development finance institutions, telecommunications companies, cloud providers, and data centre operators,” he said.

Omololu said the policy could support the growth of sovereign digital infrastructure by encouraging investments in local data centres and cloud services.

“To us, the verdict is clear: mandating onshore storage for critical financial data creates a sustained, measurable growth trajectory for local tech capacity—marking a pivotal shift toward true digital sovereignty in Nigeria,” he stated.

He added that GFA Technologies’ plans include the development of the 200MW Abeokuta

Technology Zone Data Centre and Digital Infrastructure Campus.

“Our analysis reinforces a conviction that has shaped GFA Data Centers from its inception: digital infrastructure should be built where long-term demand can be demonstrated, not merely where land is available or where capacity already exists.

“This philosophy underpins our plans for the 200MW Abeokuta Technology Zone Data Centre & Digital Infrastructure Campus, a nine-year, phased, carrier-neutral digital infrastructure campus being developed to  support  ours and  other data centre providers, sovereign  cloud  services, managed infrastructure, disaster recovery, AI workloads, enterprise colocation and future hyperscale expansion,” Omololu said.

He noted that the company’s strategy includes managed infrastructure services, sovereign cloud enablement, disaster recovery and compliance hosting targeted at regulated institutions.

“For the expected demand from regulated financial institutions and payment service providers, our commercial strategy is deliberately focused on managed infrastructure services, sovereign cloud enablement, disaster recovery and compliance hosting, enabling us to create and aggregate long- term infrastructure demand while supporting organisations on their digital transformation journey.

“We believe that combining demand generation with infrastructure development represents a more sustainable model for accelerating Africa’s digital transformation,” he said.

Citing CBN data, Omololu said Nigeria’s electronic payment transactions rose from 16.3 billion in 2021 to 38.7 billion in 2023 and could reach more than 60 billion by 2026.

He noted that increasing transaction volumes would require greater investments in payment switches, databases, cybersecurity platforms, backup systems, disaster recovery facilities and analytics platforms.

“Behind every one of these transactions sits an increasingly complex digital infrastructure comprising payment switches, databases, cybersecurity platforms, backup systems, disaster recovery environments and analytics platforms.

“As transaction volumes continue to grow, so too does the strategic importance of resilient domestic infrastructure. The CBN directive therefore represents far more than a compliance requirement; it represents an infrastructure milestone,” Omololu said.

He added that future investment in digital infrastructure would also support artificial intelligence, digital healthcare, e-government services, education technology and enterprise cloud adoption.

“By the end of 2026, we expect Nigeria will have processed more than 60 billion electronic payment transactions for the year. Supporting an ecosystem of that scale will require more than software innovation.

“It will require sustained investment in sovereign digital infrastructure, including carrier-neutral data centres, resilient power systems, fibre connectivity, disaster recovery facilities, cybersecurity platforms and highly skilled digital infrastructure professionals.

“The infrastructure deployed to support today’s payment systems will also provide the foundation for tomorrow’s AI workloads, digital healthcare, e-government services, education technology and enterprise cloud adoption,” he added.

Source: https://punchng.com/cbn-directive-drives-investment-in-data-centres/