CBN’s mandatory local hosting will cut Nigerian banks, fintechs’ forex exposure – ALTON
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has said that the latest Central Bank of Nigeria’s directive on local hosting of payment transaction data would help Nigerian banks and fintechs cut their exposure to foreign exchange volatility.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has said that the latest Central Bank of Nigeria’s directive on local hosting of payment transaction data would help Nigerian banks and fintechs cut their exposure to foreign exchange volatility.
ALTON Chairman, Gbenga Adebayo, stated this in an interview with the News Agency of Nigeria in Lagos on Saturday, while expressing support for the directive.
The CBN directive requires banks, fintechs and other payment service providers to store payment transaction data generated in Nigeria on local servers from January 1, 2027, as part of broader efforts to strengthen regulatory oversight of the country’s fast-growing digital payments ecosystem.
Adebayo said the currency benefit of local hosting extends beyond simple cost savings into reduced long-term operating risk for financial institutions.
He argued that organisations hosting data locally would pay in naira rather than foreign exchange, helping reduce exposure to exchange rate pressures.
Beyond the financial argument, Adebayo framed local hosting as a matter of national data sovereignty, which he said requires countries to take full responsibility for their data value chain, covering collection, management, storage and integrity assurance.
He also pointed to performance costs tied to hosting data abroad, noting that every transaction routed to a foreign server adds communication overhead.
On security, Adebayo argued that local control offers stronger protection than relying on foreign providers.
Adebayo dismissed concerns about Nigeria’s infrastructure readiness for the directive, pointing to existing data centre capacity already serving international clients as evidence the market can absorb the shift.
He explained that Nigeria currently has about six Tier III data centres, with additional facilities under development, but stressed that hosting capacity matters more than the raw number of facilities.
Nairametrics earlier reported that the Central Bank of Nigeria (CBN) has ordered banks, fintech companies, mobile money operators, and other payment service providers to keep all payment transaction data generated in Nigeria within the country.
