Nigerian entrepreneur Fara Ashiru built her fintech platform, Okra, on Amazon Web Services in 2020. She would pay AWS in dollars even as Okra earned in naira because American cloud providers did not accept payments in local currency at the time.
The bills were staggering. … This model was unsustainable.
The payments to AWS gradually skyrocketed as the naira depreciated around 70% against the dollar between 2020 and 2024. “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.”
Ashiru took things into her own hands, and Okra set up cloud infrastructure with servers in data centers in Nigeria and South Africa in 2024. Later that year, the cloud operations were spun off into a new company called Nebula, which allows anyone in Nigeria to run their website, app, or workflow on its cloud and pay in naira.
Nebula is the latest entrant in the Nigerian cloud services market, where several homegrown companies — such as Nobus, Galaxy, Suburban, and Layer3 — are positioning themselves as an affordable and localized alternative to AWS, Microsoft Azure, and Google Cloud. Rest of World spoke to five startups who have migrated to local cloud providers in the last two years.
Besides the option to pay in naira, these companies allow Nigerians to store their data within the country — an advantage most of their Western rivals lack. Local servers give businesses the benefits of low latency and data localization at a time when the debate about who has access to a country’s data is heating up.
Global leaders appear to have noticed the threat. In January, AWS started accepting payments in naira. “Local currencies are important in localizing the payment experience for customers,” AWS said at the time.
“I think AWS has realized that they must accept naira because if you don’t accept naira you are wasting your time,” Iyinoluwa Aboyeji, managing partner at pan-African venture building firm Accelerate Africa, told Rest of World. “We regularly advise our portfolio companies to look out for local solutions where possible and manage major costs like [cloud] in naira.”
AWS, Microsoft, and Google did not respond to requests for comment for this story.
Nigeria is home to over 19,000 tech startups, including 1,400 venture-funded ones that have collectively raised nearly $28 billion. The country has at least three internet unicorns: e-commerce major Flutterwave and fintech firms OPay and Interswitch.
AWS, Azure, and Google Cloud account for nearly 65% of the world’s cloud services market. They have also been the leaders in the African cloud market — their data centers, however, have so far been concentrated in South Africa.
Microsoft set up a data center in Johannesburg in 2019 and plans to build another one in South Africa and one in Kenya. AWS opened its first African data center in South Africa in 2020, while Google Cloud recently joined its peers by setting up a facility in Johannesburg. None of these companies have a data center in Nigeria, except the small local zone center AWS opened in Lagos in 2023.
In the wake of the U.S.-China tech decoupling, there has been a growing concern about how and where data is stored. Each country is finding ways to store the data of its citizens and businesses locally. Moving to a local cloud vendor allows Nigerian startups data sovereignty, Bruce Ayonote, founder and CEO of Abuja-based cloud service provider Suburban Cloud, told Rest of World.
“We are keying into our data sovereignty narrative.”
“How does it sound for Nigerian voters’ data to be stored in Europe?” Ayonote said. “As long as we continue to ask this question, we will always arrive at the point where we build our own cloud infrastructure.”
Digital sovereignty could be the differentiator that helps smaller cloud Nigerian startups thrive even as AWS starts accepting payments in naira. “We are keying into our data sovereignty narrative,” Chidi Okpala, head of media and corporate communications at Galaxy Backbone, told Rest of World. Galaxy Backbone is a privately held company established by the Nigerian government to build interoperability among its ministries. It has now grown into providing core cloud services to both government agencies and private companies. The company runs two data centers, one each in Abuja and Kano.
Ayonote said that storing data on local servers also helps mitigate latency — the delay that happens when a user takes an action and when they get a response. Suburban Cloud’s Abuja data center helps its customers like Netflix and Google reduce latency in Nigeria, he added.
“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.
While setting up a data center can cost millions of dollars, small Nigerian teams have found a workaround to this with “colocation” or placing their servers in data centers that allow multiple firms to share one facility, Olumide Soyombo, co-founder of Nigerian IT services and consulting firm Bluechip Technologies, told Rest of World. Several of the new cloud services startups have rented spaces in large data centers built by telcos, banks, and legacy IT firms.
“We run our cloud services out of third-party data centers in Nigeria,” Oyaje Idoko, founder of Layer3, told Rest of World. “We currently have three availability zones operating out of two data centers in Lagos and one in Abuja.”
Open Access, a leading data center company in Africa, has seen an uptick in demand 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,” Obinna Adumike, the company’s head of converged digital infrastructure for Africa, told Rest of World.
Nigerian cloud providers, however, need to improve their infrastructure and build better interfaces to compete with global giants in the long run, Ugochukwu Okoro, founder and CEO of Lagos-based property technology company Muster, told Rest of World.
Muster migrated from AWS to a small, local cloud provider called GigaLayer last August. While he has been enjoying working with GigaLayer, Okoro said, the company doesn’t offer the kind of automation that AWS does.“Their services are great, but I understand a lot of users might not want to use them because of skill issues,” he said. “I have to manually integrate our system gradually, something most of my engineers can’t do because they are used to the seamless plug-and-play offered by AWS.”