Nigeria Targets $1bn Annual Public IT Spending to Build Domestic Cloud Ecosystem

Nigeria is leveraging its vast public sector technology spending to attract global technology companies and local infrastructure investors as it seeks to become West Africa’s leading cloud computing hub.

The Federal Government’s strategy is aimed at reducing Nigeria’s dependence on offshore digital infrastructure, strengthening data sovereignty and building a domestic cloud ecosystem capable of serving the country’s more than 230 million people and neighbouring African markets.

Kashifu Inuwa Abdullahi, Director-General of the National Information Technology Development Agency (NITDA), disclosed the government’s plans during a presentation at a workshop on “Nigeria’s Digital Infrastructure Opportunity” at the ITW Data Cloud Africa 2026.

Abdullahi said the initiative would provide regulatory certainty, aggregate government demand and create an enabling environment for private investment in cloud and digital infrastructure.

According to him, Nigeria currently faces a significant infrastructure gap as much of its computing and digital services demand is still served through foreign servers.

He said local data capacity is operating at nearly 90 per cent utilisation, forcing businesses and government institutions to depend heavily on offshore computing resources.

To address the challenge, the Federal Government has introduced a Cloud-First Policy designed to consolidate technology spending across ministries, departments and agencies into a coordinated demand structure.

Abdullahi said the government intends to use its purchasing power as an anchor customer to encourage private sector investment in cloud infrastructure instead of allowing individual agencies to build isolated data centres.

Between 2023 and mid-2026, he said, 326 federal ministries, departments and agencies spent N3.89 trillion, equivalent to approximately $2.9 billion, on technology investments.

Government technology demand alone, he added, generates nearly $1 billion annually.

The NITDA Director-General said the government plans to channel a significant portion of this spending towards cloud computing and shared digital infrastructure.

“We are creating structured demand that will give investors confidence to build infrastructure in Nigeria,” Abdullahi said.

He explained that the government was also addressing regulatory uncertainty, which has remained a major concern for international technology and infrastructure investors.

According to him, NITDA is developing a unified regulatory framework and a single-interface portal that will simplify compliance requirements across multiple government agencies.

The proposed system will enable sector regulators, including the Central Bank of Nigeria, to adopt common baseline standards, reducing duplication and regulatory bottlenecks.

Abdullahi said the framework would make it easier for financial institutions and other highly regulated organisations to migrate data and workloads to local cloud infrastructure.

He stressed that the government’s objective was market development rather than revenue generation through excessive regulation.

The policy framework, he said, would promote competition, international interoperability and investment while avoiding overly restrictive data localisation requirements.

Nigeria’s growing digital population is also expected to drive demand for cloud infrastructure.

Broadband penetration recently increased by nearly 10 percentage points to exceed 56 per cent, while the country currently has about 192 million mobile subscribers and 157 million internet users.

Abdullahi said investments in digital infrastructure could deliver significant economic benefits.

Existing research estimates that every dollar invested in Nigeria’s digital infrastructure could generate up to eight dollars in broader economic value.

The domestic cloud computing market is projected to grow from $376 million in 2026 to more than $783 million by 2031.

However, government officials believe that targeted policies and increased private sector investment could accelerate the sector’s growth.

Beyond Nigeria, the government is positioning the country as a regional digital infrastructure hub for Central and West Africa.

Nigeria’s location and connectivity potential could enable it to serve landlocked neighbouring countries seeking reliable access to cloud services and data infrastructure.

Under the proposed National Digital Cloud Policy, the government is targeting $750 million in digital infrastructure investments within two years.

The plan includes attracting at least $250 million in private sector investment within the first year.

By harmonising digital standards with other African countries, Nigeria also hopes to facilitate cross-border data transfers and strengthen Africa’s digital sovereignty.

The government believes the initiative will allow African countries to exercise greater control over how their data is stored, secured and processed while reducing dependence on infrastructure located outside the continent.