- Nigerian businesses turn to local cloud providers.
- Homegrown providers like Nebula, Nobus, and Layer3 offer alternatives.
In 2020, Nigerian entrepreneur Fara Ashiru launched her fintech platform, Okra, on AWS. Despite earning in naira, she had to pay for cloud services in US dollars because American cloud providers did not her accept local currency. Given that the naira lost about 70% of its value between 2020 and 2024, Okra’s cloud expenses surged. “The bills were staggering,” Ashiru told Rest of World.
“Combine that with Nigeria’s economic challenges – rising inflation and forex volatility – and it became clear that this model was unsustainable.” To reduce costs, Okra shifted its cloud infrastructure to local data centres in Nigeria and South Africa in 2024. Later that year, these operations were spun off into a separate company called Nebula, allowing Nigerian businesses to host their websites, apps, and workflows and pay in naira.
Nebula is part of a growing shift toward homegrown cloud providers in Nigeria. Companies like Nobus, Galaxy, Suburban, and Layer3 offer local alternatives to AWS, Microsoft Azure, and Google Cloud.
Rest of World spoke with five startups that have moved to local providers in the past two years. Beyond currency considerations, local cloud services allow Nigerian businesses to store data in the country, reducing latency and addressing concerns over data sovereignty. As data control becomes a pressing issue worldwide, keeping sensitive information in national borders is becoming a priority for many businesses.
Global cloud providers appear to be responding to these shifts. In January, AWS began accepting payments in naira. “Local currencies are important in localising the payment experience for customers,” AWS stated at the time.
Industry observers see moves by international cloud providers as a necessary response to market demand. “I think AWS has realised that they must accept naira because if you don’t accept naira you are wasting your time,” said Iyinoluwa Aboyeji, managing partner at venture-building firm Accelerate Africa.
“We regularly advise our portfolio companies to look out for local solutions where possible and manage major costs like [cloud] in naira,” they said.
Nigeria has a thriving tech ecosystem with more than 19,000 startups, including 1,400 venture-funded firms that have raised nearly $28 billion collectively. The country is home to several unicorns, like fintech companies Flutterwave, OPay, and Interswitch.
AWS, Azure, and Google Cloud have primarily concentrated their African infrastructure in South Africa. Microsoft established a data centre in Johannesburg in 2019, with plans for additional centres there. AWS followed with its first African data centre in Jo’burg in 2020, and Google Cloud recently chose the city to set up its operations.
AWS opened a small local zone in Lagos, Nigeria in 2023, but none of the big providers have full-scale data centres in Nigeria. The shift toward data localisation is gaining momentum and many governments are pushing for data to be stored inside national borders to enhance security and control.
Nigerian startups moving to local cloud vendors see the localisation of resources as an advantage, according to Bruce Ayonote, CEO of Abuja-based cloud provider Suburban Cloud. “How does it sound for Nigerian voters’ data to be stored in Europe?” Ayonote asked. “As long as we continue to ask this question, we will always arrive at the point where we build our own cloud infrastructure.”
The focus on data sovereignty could help Nigerian cloud providers establish themselves in the local market, even as companies like AWS adapt their business models.
“We are keying into [the] data sovereignty narrative,” said Chidi Okpala, head of media and corporate communications at Galaxy Backbone. Galaxy Backbone has expanded to provide cloud services to both public and private sector clients, having been established by the Nigerian government to facilitate interoperability among ministries. It operates data centres in Abuja and Kano.
Beyond data security, local providers also highlight performance advantages. Suburban Cloud’s Abuja data centre offer clients like Netflix and Google reduced latency in reaching Nigerian users. “Latency is a big issue when it comes to cloud business and these global companies know that they have to build some forms of proximity to their users,” Ayonote said.
Setting up data centres is costly, often requiring millions of dollars. To mitigate this, some Nigerian startups are using colocation – renting space in existing data centres owned by telecoms firms, banks, and IT companies.
“We run our cloud services out of third-party data centres in Nigeria,” said Oyaje Idoko, founder of Layer3. “We currently have three availability zones operating out of two data centres in Lagos and one in Abuja.”
The demand for colocation services is increasing. “We’ve seen rising interest for colocation and other services by local cloud providers, driven by the growing digital technology landscape, increasing demand and most importantly, the need for payment in local currency,” said Obinna Adumike, head of converged digital infrastructure at Open Access, a data centre company operating in Africa.
While local cloud services offer benefits, they still face challenges. Infrastructure gaps and limited automation compared with that of global providers are hurdles, said Ugochukwu Okoro, CEO of Lagos-based property technology firm Muster. Muster switched from AWS to local cloud provider GigaLayer last August. While Okoro values the transition, he said that GigaLayer lacks the automation AWS provides. “Their services are great, but I understand a lot of users might not want to use them because of skill issues. […] I have to manually integrate our system gradually, something most of my engineers can’t do because they are used to the plug-and-play offered by AWS.”
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