Dr Ranganath Backs CBN Data Localisation Policy

By  Olumide Johnson

Chief Executive Officer of UniCloud Africa Limited, Dr Krishnan Ranganath, has endorsed the Central Bank of Nigeria (CBN)’s directive requiring banks, fintechs and payment service providers to localise transaction data and disclose ultimate beneficial ownership, describing the policy as a strategic step towards securing Nigeria’s digital sovereignty. Speaking recently on Nigeria’s evolving digital economy, Ranganath argued that data has become a strategic national asset whose ownership, storage and governance directly influence economic competitiveness, national security and regulatory oversight. With organisations expected to relocate payment data to Nigeria by January 2027, he maintained that the country possesses sufficient world-class data centre capacity and that the principal challenge is confidence in domestic infrastructure rather than technology.

DECISION HIGHLIGHT

The CBN’s data localisation policy is repositioning digital infrastructure from an operational requirement to a strategic national asset, linking financial regulation with economic resilience, data sovereignty and domestic value creation.

DECISION MEMO

Ranganath’s assessment frames data localisation as an economic strategy rather than a compliance exercise. His argument is that countries increasingly derive competitive advantage not only from generating data but from controlling the infrastructure through which it is stored, governed and monetised.

According to him, Nigeria’s long-standing dependence on foreign cloud infrastructure exposes businesses and regulators to external legal jurisdictions, limits oversight of critical financial information and increases vulnerability during geopolitical or technological disruptions. Consequently, the localisation directive represents a transfer of strategic control rather than merely a migration of digital assets.

He argues that the transition is commercially justified. Nigerian businesses collectively spend hundreds of millions of dollars annually on foreign cloud services. Redirecting a portion of that expenditure to domestic providers could retain capital within the economy, strengthen indigenous technology companies, generate skilled employment and reduce exposure to foreign exchange volatility through naira-denominated transactions.

Ranganath further contends that Nigeria’s digital infrastructure has matured sufficiently to support the policy. In his assessment, world-class data centres already exist, while additional investments continue to expand national capacity. He therefore identifies confidence, rather than infrastructure availability, as the principal barrier to implementation.

He also rejects the view that localisation discourages foreign investment, arguing instead that stronger domestic infrastructure, improved regulatory certainty and enhanced digital resilience ultimately benefit both international and local businesses. As he concluded: “A nation cannot build its digital future on infrastructure it does not control.”

DATA BOX

• Policy driver: CBN data localisation directive
• Compliance deadline: January 2027
• Affected institutions: Banks, fintech companies, digital banks, mobile money operators and payment service providers
• Regulatory requirements:
  • Localise payment transaction data
  • Disclose ultimate beneficial ownership
• Existing infrastructure: Nigeria possesses internationally compliant data centres, with additional capacity under development
• Economic implication: Hundreds of millions of dollars spent annually on foreign cloud services could increasingly be retained within Nigeria
• Strategic objectives: Digital sovereignty, stronger regulatory oversight, improved cybersecurity resilience, local investment and employment generation

WHO WINS / WHO LOSES

Winners: Nigerian data centre operators, indigenous cloud service providers, domestic technology firms, regulators, cybersecurity service providers and businesses seeking lower foreign exchange exposure.

Losers: Foreign-hosted infrastructure providers dependent on Nigerian workloads, organisations slow to adapt to localisation requirements and businesses exposed to external jurisdictional and geopolitical risks.

POLICY SIGNALS

The directive signals a shift towards digital industrial policy in which data governance becomes part of national economic strategy. It aligns Nigeria with international trends that increasingly prioritise sovereign control over critical digital infrastructure while strengthening regulatory visibility and financial system resilience.

INVESTOR SIGNAL

The policy creates long-term opportunities across Nigeria’s digital infrastructure ecosystem, particularly data centres, cloud computing, cybersecurity and enterprise technology services. Investors may also view stronger data governance as improving regulatory certainty and supporting broader digital economy growth.

RISK RADAR

Implementation risks include migration costs, operational readiness among regulated institutions, infrastructure scaling requirements and industry compliance within the January 2027 deadline. Sustained policy consistency and continued investment in domestic digital infrastructure will determine whether localisation delivers the anticipated economic and strategic benefits.