E-Business
Nigeria Loses N60Bn Annually to Foreign Data Hosting Firms
In spite of the huge economic benefits of organisations in the country hosting their data with cloud operators, greater number of them is yet to adopt their services rather preferred to patronise foreign providers.
According to the Nigeria Internet Registration Association (NiRA), the country loses up to ₦60 billion worth of foreign exchange to other countries every year as payments for web hosting services.
For Remi Adejumo, chief executive officer, Cloud Flex: “there is more than a 70 per cent rate of cloud adoption worldwide, however out of the 70 per cent Nigeria can barely boast of 20 per cent. I have always felt that shared services, which is the bedrock of a public cloud, is an essential component in the economic growth of Nigeria.
“Unfortunately, we are lagging seriously behind the rest of the world in adopting this strategy. The adoption and migration to the cloud, results in a great reduction of costs, up to 70 per cent of the IT infrastructure TCO as well as providing agility and speed to market for enterprises”.
According to a recent report Cloud Banking in Africa titled: ‘The Regulatory Opportunity’ put together by Genesis Analytics and Orange Business Services.” African financial service providers (FSPs) stand to benefit hugely from cloud banking but are limited by regulations.
Richard Ketley, director, Financial Services Strategy at Genesis Analytics, said: “Cloud banking can unlock value for the providers and users of financial services by reducing costs and improving efficiency such as through the integration of data across business units and geographies, and with external third-party providers to deliver more innovative products to customers”.
Adejumo noted that: “the under-investment and support of public cloud platforms in Nigeria has led to a large exodus of revenue to the hyperscalers outside the country and contributed to capital flight. Billions of dollars are spent outside of Nigeria to host applications used within these shores.
“There is a lot of talk and publishing of guidelines of protecting the Nigerian market but no legal backing to enforce them. More than 90% of our regulated businesses are hosted outside of our shores. It means in the event of a dispute, the home country has the jurisdiction of resolution.
“We have seen the warning signs and yet ignored them – PI&D scandal, the dispute between the US and China and the marginalisation of a large Chinese conglomerate overnight. In any dispute about the data respository, Nigeria will be the loser as I cannot imagine any country legislating against its own interest.
Adejumo added that, the Nigerian government policy has been to increasingly tax the same companies year in year out rather than create opportunities for enterprises to grow or new private initiatives to flourish. “China‘s growth in artificial intelligence, for example, was largely a result of favourable laws, grants and a government focus on providing an enabling environment.
“The Nigerian Government needs to focus on the infrastructure, power infrastructure and transport network. Experts have shown that a 25 per cent improvement in these two areas will provide a huge increase in GDP. Subsequently, the government will also see quick returns on their investment.
“The government needs to promote the local growth of technology with favourable legislation and specific funding.
“Businesses need to understand and embrace the advantages of cloud computing with an emphasis on not diminishing the power of local businesses. The relevant authorities that have provided the guidelines and policies need to ensure that there are the laws and statutes to support and enforce them,” he stated.
South Korean authorities have temporarily blocked new downloads of the DeepSeek artificial intelligence (AI) app, citing concerns over the company’s handling of user data.
The country’s Personal Information Protection Commission (PIPC) announced the decision on Monday, saying that the Chinese AI startup had failed to fully comply with South Korea’s data protection laws.
According to PIPC, DeepSeek recently appointed legal representatives in South Korea and admitted to partially neglecting regulatory considerations regarding user privacy.
“The Chinese startup appointed legal representatives last week in South Korea and had acknowledged partially neglecting considerations of the country’s data protection law,” the PIPC said.
The commission added that the app’s service would resume once the company implements improvements in accordance with national privacy laws.
According to Reuters, when asked about South Korea’s move, a spokesperson for China’s foreign ministry said the Chinese government prioritises data privacy and security, ensuring compliance with legal standards.
The spokesperson also said China does not require companies or individuals to collect or store data in violation of laws.
The ban follows similar actions by other governments.
On February 4, Australia prohibited the use of DeepSeek on government devices due to security concerns.
Italy’s privacy regulator recently blocked the AI service, citing the company’s failure to address data policy issues.
Taiwan has also warned about potential risks related to cross-border data transmission and information leaks.
Also, regulators in Ireland and France have launched investigations into DeepSeek’s data-handling practices.
DeepSeek gained global adoption for its advanced human-like reasoning capabilities and open-source model.
In January, it surpassed OpenAI’s Chatgpt as the most downloaded free app on the Apple store.
The African Union (AU) has officially designated Nigeria as the Digital Trade Champion under the African Continental Free Trade Area (AfCFTA) Digital Trade Protocol, citing the country’s leadership in digital enterprise and innovation.
The endorsement came at the 38th Ordinary Session of the Assembly of Heads of State and Government, which concluded on Sunday in Addis Ababa.
Nigeria’s proactive role in advancing the digital trade protocol, adopted in February 2024, was a key factor in the decision.
The AfCFTA Digital Trade Protocol encompasses eight annexes covering crucial areas such as rules of origin, digital identities, cross-border data transfers, online safety, and financial technology. The protocol is expected to provide a robust framework for Africa’s digital economy.
According to a statement issued on Monday by Special Adviser to the President on Information and Strategy, Bayo Onanuga, former President of Niger Republic and AU AfCFTA Champion, Mahamadou Issoufou, praised Nigeria’s leadership, particularly for convening the Digital Economy Roundtable in January.
“No organization, region, or continent has negotiated or adopted such a comprehensive legal instrument on digital trade, positioning the African continent to benefit from the digital economy for innovation and job creation,” Issoufou said in his progress report to the AU Assembly.
He also highlighted Africa’s growing influence in digital innovation, particularly in mobile banking and financial technology, and noted that the protocol would create an enabling environment for young African entrepreneurs.
“The AfCFTA Protocol on Digital Trade will establish a conducive environment for these young people to fully participate in Africa’s digital economy,” Issoufou added.
Reflecting on the roundtable in Abuja, he commended President Bola Tinubu and his administration for facilitating discussions with key stakeholders.
“The Roundtable was attended by young pioneers in Fintech, mobile banking and other areas of the digital economy. It was evident from the discussions that young people are eager to take advantage of Africa’s digital economy through the AfCFTA Protocol on Digital Trade”, he said.
Speaking at the AU summit, Nigeria’s Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, described the AU’s endorsement as a milestone in Africa’s economic development.
“Africa has demonstrated global leadership by pioneering the first-of-its-kind AfCFTA Protocol on Digital Trade—establishing a comprehensive regulatory framework,” Dr. Oduwole stated.
She emphasized that the protocol is a “game changer” for the continent, predicting that it would generate millions of jobs, contribute billions to Africa’s GDP, and attract significant investments in digital infrastructure.
Eric Schmidt, former Google CEO has expressed concerns about the extreme risks posed by artificial intelligence (AI) falling into the hands of terrorists or rogue states.
Eric Schmidt, former Google CEO
He warned that nations such as North Korea, Iran, and Russia could adopt AI technologies to develop weapons capable of causing significant harm, including biological weapons.
Schmidt urged governments to oversee private tech companies, emphasising, “The real fears I have are not the ones most people discuss about AI, I talk about extreme risk.”
“I’m always worried about an ‘Osama Bin Laden’ scenario, where truly evil individuals take control of some aspect of modern life to harm innocent people,” he added.
With private companies driving AI advancements, he stressed the need for careful government monitoring and regulation. “It’s really important that governments understand what we’re doing and keep their eye on us,” he said.
His remarks followed a two-day AI summit in Paris, where the UK and the U.S. declined to sign a communiqué outlining the future direction of AI. The declaration on “inclusive and sustainable artificial intelligence for people and the planet” was endorsed by 57 countries, including India, China, the Vatican, the EU, and the African Union Commission.
The UK justified its decision, stating that the agreement lacked “practical clarity” on global AI governance and national security concerns.
Schmidt supports U.S. export controls restricting the sale of advanced AI microchips to certain countries, aiming to slow adversaries’ progress in AI research.
He also highlights the importance of international collaboration on AI safety, suggesting that cooperation with nations like China is essential to addressing global AI challenges.
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