The National Information Technology Development Agency (NITDA) has finalised a data classification framework that encourages cloud service providers to establish local operations in Nigeria.
NITDA’s framework mandates sensitive data—especially in the finance, healthcare, and government sectors—to be stored within Nigeria's borders.
This initiative aligns with global data localisation trends and supports the nation's digital economy objectives.
Under the new framework, international cloud service providers will be required to host certain categories of data within Nigeria. This regulation aims to reduce Nigeria's reliance on foreign cloud storage, improve national security, and regulatory oversight.
Countries like India and Algeriahave adopted similar measures to protect sensitive data and promote local digital infrastructure.
According to NITDA’s Director-General, Kashifu Inuwa, this policy is part of Nigeria’s broader strategy to position itself as a key player in Africa’s digital economy. By enforcing local data hosting, the government seeks to create a thriving cloud ecosystem that benefits local businesses and consumers.
A key goal of the data classification framework is to attract cloud service providers to establish operations in Nigeria.
By creating a localised approach and creating a supportive regulatory environment for cloud infrastructure investments, this initiative is expected to boost economic growth, generate jobs, and strengthen Nigeria's status as a regional technology hub.
For international cloud companies like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure, this policy presents both challenges and opportunities. To continue operating in Nigeria, these firms must either build local data centres or form partnerships with Nigerian cloud providers. While this could increase operational costs, it also opens doors for joint ventures and collaborations with local businesses.
Foreign cloud providers must also navigate Nigeria’s regulatory landscape, ensuring compliance with the Nigeria Data Protection Act (NDPA) 2023. The act outlines strict data handling and security requirements, making adherence to local laws crucial for continued business operations.
The data classification framework complements existing regulations, ensuring businesses adhere to national data protection standards. By aligning with the NDPA 2023, the framework mitigates risks related to data breaches and unauthorised cross-border data transfers.
NITDA’s initiative also seeks to boost public trust in Nigeria’s digital economy. With clear regulations on data localisation, consumers and businesses can be assured of enhanced data security and privacy protection.
Beyond data sovereignty, the policy aims to accelerate Nigeria’s AI and digital transformation efforts. Local cloud hosting is expected to improve access to AI-driven solutions in sectors like healthcare, agriculture, and finance.
Unlike global AI players focusing on large-scale language models, Nigeria’s AI strategy is geared towards immediate, practical applications that address local challenges.
The new framework also presents significant opportunities for Nigerian cloud providers, including companies like Rack Centre, MainOney), CloudFlex, Okra, and Galaxy Backbone.
With foreign firms required to localise their infrastructure, local cloud companies are well-positioned to attract new clients, secure investment, and expand their service offerings.
However, this also presents challenges, such as scaling operations to meet growing demand and maintaining compliance with evolving regulatory requirements. Local providers will need to enhance their infrastructure capabilities and cybersecurity measures to remain competitive in the changing market landscape.
As Nigeria takes bold steps toward digital sovereignty and technological advancement, the framework marks a significant milestone in positioning the country as a leader in Africa’s digital economy.
Source: https://techpoint.africa/2025/02/17/nitda-cloud-providers-host-data/