CBN Says Over 50% of Financial Institutions Ready for Data Localisation Policy

The Central Bank of Nigeria (CBN) has disclosed that more than 50 per cent of financial institutions in the country are prepared to comply with data localisation requirements, as the regulator targets full industry compliance by January 2027.

The apex bank said the policy is designed to strengthen Nigeria’s digital sovereignty, improve control over financial transaction data and protect the stability of the financial system without restricting innovation or access to global technology.

The Director of the CBN’s Payment System Supervision Department, Dr Rakyat Yusuf, disclosed this at the CBN-National Information Technology Development Agency (NITDA) Executive Regulatory Dialogue on the National Sovereign Cloud Initiative (NSCI) and data localisation in Lagos.

Yusuf said a survey conducted by the central bank showed that more than half of the financial industry was ready to meet the requirements. She expressed optimism that institutions yet to achieve compliance would make progress following clarifications provided during the regulatory dialogue.

“A survey we conducted to generate data on the level of preparedness has shown that more than 50 per cent of the industry is ready to comply,” she said.

She added that the CBN expected all relevant institutions to meet the requirements by January 2027, ensuring that payment data was appropriately localised.

According to Yusuf, the policy is intended to strengthen Nigeria’s control over its transaction data while providing greater clarity and visibility over financial activities. She said the regulator’s immediate priority was to help institutions understand and meet their obligations rather than resorting straight away to punitive measures.

However, she warned that institutions found deliberately avoiding compliance would face sanctions.

“However, where we identify a deliberate attempt to avoid compliance, sanctions will come into play. There will be sanctions for non-compliance,” she said.

CBN Emphasises Digital Sovereignty Without Restricting Innovation

Also speaking at the event, CBN Deputy Governor for Financial System Stability, Lamido Yuguda, said Nigeria needed stronger control over its critical digital infrastructure while remaining open to international technological developments.

Yuguda said the National Sovereign Cloud Initiative should provide the security, resilience and regulatory certainty needed to encourage investment and support sustainable growth, rather than isolate the country from global technology.

“The objective of the National Sovereign Cloud Initiative should not be to constrain innovation or isolate Nigeria from global technological developments. Rather, it should provide the security, resilience, and regulatory certainty necessary to support investment, innovation, and sustainable growth,” he said.

He added that the stability of Nigeria’s financial system increasingly depended on the reliability and security of the digital infrastructure supporting banking, payments and other financial services.

Yuguda said the country must strike a balance between strengthening digital sovereignty, improving security, encouraging local data management and maintaining access to efficient technology solutions.

NITDA Assures Industry of Local Technology Capacity

Meanwhile, NITDA Director-General Kashifu Abdullahi assured financial institutions that Nigeria’s technology ecosystem had the capacity to support the implementation of the sovereign cloud initiative.

Abdullahi said the regulatory dialogue was intended to demonstrate that local technology providers and infrastructure could help institutions comply with the requirements.

“Today’s workshop is to give you the assurance that the technology exists, the Nigerian tech ecosystem is capable, and it can support you in complying with your regulator’s mandate or directive,” he said.

He explained that digital sovereignty did not mean isolating Nigeria from the global technology industry or insisting that every digital product be developed locally. Rather, he said, it involved building the country’s capacity to compete internationally while maintaining control over critical infrastructure.

Abdullahi also warned that disruptions outside Nigeria, including submarine cable outages and geopolitical crises, should not automatically threaten the country’s payment systems.

He said the initiative could give financial institutions more options when choosing technology providers and reduce the risks associated with depending on a single vendor, country or technology platform.

With the January 2027 compliance target approaching, the CBN’s priority is to support the financial industry in meeting the requirements while ensuring that stronger data control does not come at the expense of technological progress, financial stability or global competitiveness.