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Nigeria loses N60bn annually to foreign data hosting firms

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According to NiRA, the country loses up to ₦60 billion worth of foreign exchange to other countries every year. Photo: PIXABAY

In spite of the huge economic benefits of organisations in the country hosting their data with cloud operators, a greater number of them is yet to adopt their services rather preferred to patronise foreign providers.

According to the Nigeria Internet Registration Association (NiRA), the country loses up to ₦60 billion worth of foreign exchange to other countries every year as payments for web hosting services.

For RemiA dejumo, chief executive officer, Cloud Flex: “there is more than a 70 per cent rate of cloud adoption worldwide, however out of the 70 per cent Nigeria can barely boast of 20 per cent. I have always felt that shared services, which is the bedrock of a public cloud, is an essential component in the economic growth of Nigeria.

“Unfortunately, we are lagging seriously behind the rest of the world in adopting this strategy. The adoption and migration to the cloud, results in a great reduction of costs, up to 70 per cent of the IT infrastructure TCO as well as providing agility and speed to market for enterprises”.

According to a recent report Cloud Banking in Africa titled: ‘The Regulatory Opportunity’ put together by Genesis Analytics and Orange Business Services.” African financial service providers (FSPs) stand to benefit hugely from cloud banking but are limited by regulations.

Richard Ketley, the director, Financial Services Strategy at Genesis Analytics, said: “Cloud banking can unlock value for the providers and users of financial services by reducing costs and improving efficiencies such as through the integration of data across business units and geographies, and with external third-party providers to deliver more innovative products to customers”.

Adejumo noted that:“the under-investment and support of public cloud platforms in Nigeria has led to a large exodus of revenue to the hyperscalers outside the country and contributed to capital flight. Billions of dollars are spent outside of Nigeria to host applications used within these shores.

“There is a lot of talk and publishing of guidelines of protecting the Nigerian market but no legal backing to enforce them.

More than 90% of our regulated businesses are hosted outside of our shores. It means in the event of a dispute, the home country has the jurisdiction of resolution.

“We have seen the warning signs and yet ignored them – PI&D scandal, the dispute between the US and China and the marginalisation of a large Chinese conglomerate overnight. In any dispute about the data repository, Nigeria will be the loser as I cannot imagine any country legislating against its own interest.

Adejumo added that,the Nigerian government policy has been to increase tax the same companies year in year out rather than create opportunities for enterprises to grow or new private initiatives to flourish. “China‘s growth in artificial intelligence, for example, was largely a result of favourable laws, grants and a government focus on providing an enabling environment.

“The Nigerian Government needs to focus on the infrastructure, power infrastructure and transport network. Experts have shown that a 25 per cent improvement in these two areas will provide a huge increase in GDP. Subsequently, the government will also see quick returns on their investment.

“The government needs to promote the local growth of technology with favourable legislation and specific funding.

“Businesses need to understand and embrace the advantages of cloud computing with an emphasis on not diminishing the power of local businesses. The relevant authorities that have provided the guidelines and policies need to ensure that there are the laws and statutes to support and enforce them,” he stated.


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