The Central Bank of Nigeria expects all financial institutions to comply with payment data localisation requirements by January 2027, warning that deliberate violations could attract sanctions.
The Central Bank of Nigeria (CBN) has disclosed that more than 50 per cent of the country’s financial industry is prepared to comply with data localisation requirements as the government moves to strengthen digital sovereignty and protect critical financial infrastructure.
The disclosure was made by Dr. Rakyat Yusuf, Director of the CBN’s Payment System Supervision Department, during 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 apex bank indicated that more than half of financial institutions were ready to meet the requirements. She expressed optimism that the remaining institutions 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 expects the entire industry to meet the requirements by January 2027, ensuring that payment data is appropriately stored and managed within Nigeria.
“Ultimately, we expect everyone to be on board by January 2027 to ensure that payment data is properly localised,” Yusuf stated.
According to her, the policy is intended to strengthen Nigeria’s control over transaction data, improve regulatory visibility and support the stability of the financial system.
CBN Prioritises Compliance Before Sanctions
Yusuf explained that the central bank’s immediate priority was to help financial institutions understand and meet the data localisation requirements rather than impose penalties at the earliest opportunity.
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.
The CBN’s position underscores the regulator’s intention to encourage cooperation while maintaining enforcement measures against institutions that intentionally disregard the requirements.
CBN Deputy Governor Calls for Digital Sovereignty Without Restricting Innovation
Also speaking at the event, Lamido Yuguda, Deputy Governor for Financial System Stability at the CBN, said Nigeria must strengthen its control over critical digital infrastructure without cutting itself off from global technological developments.
He stressed that the National Sovereign Cloud Initiative should support security, resilience and regulatory certainty rather than restrict innovation or discourage international technology integration.
“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,” Yuguda said.
He noted that the stability of Nigeria’s financial system increasingly depended on the reliability and resilience of the digital infrastructure supporting financial transactions.
According to him, the country must balance data protection and localisation with the need to remain competitive in the global financial and technology landscape.
Yuguda said Nigeria should strengthen digital sovereignty, improve security and encourage localisation while ensuring that financial institutions continue to benefit from efficient and reliable technology.
NITDA Assures Banks of Local Technology Capacity
Meanwhile, Kashifu Abdullahi, Director-General of the National Information Technology Development Agency, 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 the necessary technology and local expertise were available to help institutions meet their regulatory obligations.
“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 clarified that digital sovereignty did not mean isolating Nigeria from international technology markets or requiring every technology solution to be developed locally. Instead, he said, the objective was to build the country’s digital capacity and strengthen its ability to compete globally while maintaining control over critical infrastructure.
“It is about building our digital capacity to compete in the world we are in today,” Abdullahi added.
Sovereign Cloud Initiative Targets Technology Dependence
Abdullahi also warned that disruptions originating outside Nigeria, including submarine cable outages and geopolitical crises, should not automatically affect the country’s payment systems.
He said the sovereign cloud initiative could give financial institutions more options when selecting technology providers and reduce excessive dependence on a single vendor, country or technology platform.
The initiative is therefore intended to strengthen the resilience of Nigeria’s financial infrastructure while giving institutions greater flexibility in adopting technology solutions.
With the CBN targeting full compliance by January 2027, financial institutions are expected to continue preparing for the requirements as regulators work to improve data protection, operational resilience and the country’s control over critical financial information.
