Forex Scarcity Forces Firms to Host Servers Locally

The high exchange rate of the naira to dollar and other foreign currencies is positively impacting on desire of organizations in the country to host their internet information in foreign countries.

Nigeria CommunicationsWeek investigations revealed that relocation of website servers by private organizations to Nigeria data centres has recorded some three percent over the past one year citing high exchange rate which made payment for such service difficult for them.

Reacting to the development, Muhammed Rudman, managing director, Internet Exchange Point of Nigeria, said the movement is small compared to 100 percent of such server that were hosted abroad as at last year.

He cited some foreign information hosting companies that have started operation in the country in order to make it easier for organizations hosting with them to make use of their service in Nigeria.

He decried lack of patronage by big government agencies with huge information needed to drive data centre business in the country who are still hosting abroad.

“Even with efforts of office of local content under National Information Technology Development Agency (NITDA), aimed at encouraging local content in information technology such as local hosting of service, almost all government agencies internet information is hosted abroad.

“There are a lot of standard data centres in the country. We should position ourselves to become a regional IT hub in West Africa by empowering our data centres, if you have more data centres as Nigeria has huge number of internet users, it will attract other of her neighbours to host their contents in the country. There is no reason for us to host our information outside of this country,” he said.

He added that government can drive this vision through policies and implementation of such policies that will ensure that government agencies relocate their servers as well as some incentives for private sector businesses.

He added hosting servers abroad encourage capital flight as cost of such service will be paid in foreign currency; as well as create employment for foreigners at the expense of Nigerians.

“More so, if by any means there is cut or tsunami that damages undersea cable that provides connectivity between the host network and the ministry or agency, staff cannot communicate through the email,” he said

Engr. Sam Adeleke, chief executive officer of Steineng Nigeria Ltd and immediate past president, Internet Service Providers Association of Nigeria (ISPAN), identified some reasons why federal MDAs and others preferred hosting their servers abroad which include cost, according to him, it is cheaper to host abroad because power, security and bandwidth contribute to high cost in Nigeria.

Another factor he said is multiplicity of location of server, where most of the hosting companies abroad provider multiple location in case there is disaster in one location they will move to another location without their customers suffering downtime.

He added that continuity of business in Nigeria is not certain because of harsh business environment.

” Suggesting Galaxy backbone as alternative is risky because in as much as it is owned by government there is no guarantee that it will not collapse one day, as government is not good business man,” he said.

Among the MDAs whose website servers are hosted abroad to include, cbn.gov.ng which is hosted in USA, Ferma.gov.ng hosted in UK; National Health Insurance Scheme nhis.gov.ng hosted in USA;  efcc.gov.ng hosted in USA;  nuc.ed.ng hosted in UK;  pfp.gov.ng hosted in USA;  federal ministry of finance fmf.gov.ng hosted in USA; and  ncc.gov.ng hosted in USA, among others.