The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has thrown its weight behind the Central Bank of Nigeria’s (CBN) directive mandating banks, fintech firms and other payment service providers to host payment transaction data within Nigeria, describing the policy as a major step towards reducing foreign exchange exposure and strengthening the country’s digital economy.
The CBN had directed all financial institutions and payment service operators to ensure that payment transaction data generated within Nigeria are stored and managed locally, with full compliance expected by January 1, 2027.
The apex bank said the measure is aimed at enhancing regulatory oversight, promoting data sovereignty and safeguarding the integrity of the nation’s payment ecosystem.
Reacting to the development, ALTON chairman, Gbenga Adebayo, said the directive would significantly reduce the dependence of banks and fintech companies on foreign-hosted infrastructure, thereby cutting their exposure to exchange rate volatility and reducing capital flight.
Adebayo noted that many operators currently pay for cloud services, data storage and hosting infrastructure in foreign currencies, a situation that places pressure on their operational costs whenever the naira weakens against major international currencies.
According to him, “When data is hosted locally, operators are no longer compelled to make huge foreign currency payments for offshore hosting services. This will substantially reduce forex exposure for banks and fintechs while strengthening local capacity.”
He added that the policy would encourage greater investment in Nigeria’s data centre ecosystem and telecommunications infrastructure.
“Beyond the forex savings, the directive will drive investments in local data centres, create jobs, deepen digital infrastructure and improve the overall resilience of the financial services sector,” Adebayo stated.
The ALTON chairman also described the move as a strategic step towards achieving data sovereignty, stressing that sensitive financial information generated within the country should remain under Nigerian jurisdiction.
“Critical payment data generated in Nigeria should reside in Nigeria. This improves regulatory visibility, strengthens security oversight and ensures that local laws govern the management of such information,” he said.
While stakeholders have argued that the directive aligns with global trends where regulators are increasingly insisting on local storage of critical financial data to improve consumer protection, operational resilience and national security.
The CBN, in the circular signed by the Director of the Payments System Supervision Department, Rakiya Yusuf, stated that, “All Financial Institutions and participants facilitating payments within Nigeria shall ensure that payment transaction data generated within Nigeria are stored and managed in Nigeria in accordance with data protection laws and regulations applicable in Nigeria.”
The apex bank explained that the directive became necessary following rapid growth in electronic payments, increasing adoption of digital financial services and the emergence of operators with substantial market presence across key payment activities.
Analysts believe the policy could accelerate investments in local cloud infrastructure, data centres and connectivity services while reducing annual foreign exchange outflows associated with offshore data hosting.
Meanwhile, they also noted that the measure complements the CBN’s broader efforts to strengthen oversight of Nigeria’s fast-growing digital payments ecosystem and build a more resilient financial services sector capable of supporting long-term digital economic growth.
SOURCE: Leadership
