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How Hosting Locally Reduces the Impact of Foreign Exchange Fluctuation

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When organizations want to host their content, they look for a hosting platform that gives them efficient, high speed, and cost-effective service, so their content can be accessed quickly.

But while businesses and agencies in Nigeria have this same expectation, many unwittingly opt for service providers that cost them this speed and cost-effectiveness they crave. They host their data with foreign data centers.

Several consequences follow from hosting with foreign service providers. Upload and download times could be slower because the data centers are far away from the business that stores and accesses the data. There are data sovereignty issues as well; it’s not always clear whether it’s the business’s home country or the data center’s host country that has administrative rights over the data.

There’s another problem that businesses get exposed to when they use foreign hosting platforms. It’s a problem with unstable currency exchange rates.

The Exchange Rate Problem   

Organizations also have to pay for the hosting services provided from beyond their borders in foreign currency. If a company in Nigeria hosts its content with a cloud firm in the United States, it will pay that firm for its services in dollars.

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. As of 2016, less than 2% of domain names were registered in Nigeria.

There’s a problem with this. If most establishments with a web presence in Nigeria rely on foreign hosting, they will be exposed to fluctuations in foreign exchange. If the dollar becomes more expensive relative to the naira, they will have to spend more to pay hosting fees.

Let’s explain this with a simple example.

Suppose Company A in Nigeria hosts its website with a hosting firm B in the United States. The Nigerian company A pays the hosting firm B $700 annually for its hosting services.

If the current dollar-naira exchange rate is ₦360 to $1, the Nigerian company will be spending an equivalent of ₦252,000 on hosting in one year.

But if the naira slumps and the exchange rate becomes ₦400 to $1, the Nigerian firm will have to pay ₦280,000 in hosting fees in a year.

That’s a difference of ₦28,000.

How a Fluctuating Exchange Rate Affects Business Hosting Budgets

One thing becomes immediately apparent: companies can’t be sure how much they will have to pay for hosting when they are drawing up their budgets. Even if the cost remains constant in dollar terms, the unstable exchange rate ensures that you can’t be certain about how much naira you will be set aside for it. This uncertainty makes planning difficult and may frustrate the efforts of businesses and agencies to streamline their expenses.

Higher costs also eat into budgets and reduce net business incomes. For organizations that consider their expenditure on this front as significant, a local currency that continually depreciates against the dollar could be eroding their efforts to turn out significant profits.

The Impact of Forex Payments for Hosting on Nigeria’s Economy

The exchange rate problem exerts significant pressure on the wider economic scale. Taken together, local companies are paying millions of dollars in scarce foreign exchange to foreign hosting firms. When these payments are made, Nigeria is left with fewer dollars. And when there are fewer dollars, the demand for them will push their naira-price higher.

Local companies suffer as a result. They may be paying the same rates in dollar terms, but they are spending more naira to make the payment.

In a nutshell, companies that use foreign hosting firms are contributing to a problem that they are already suffering from.

The Remedy: Local Hosting

There’s a solution to the uncertainty, rising costs, and economic problems that foreign hosting brings. It’s called local hosting. Instead of spending dollars on this service, companies in Nigeria can switch to local hosting firms.

Here are some advantages that businesses can gain from local hosting, in terms of exchange rate issues and costs.

  • They won’t have to contend with fluctuating rates and the confusion that comes with it. They can simply pay for hosting in naira.
  • Rates don’t ‘change’ abruptly. Customers will usually be notified when fees have been reviewed upwards or downwards.
  • There’s greater certainty around the costs that the company is incurring.
  • The fees are fixed and denominated in naira, so it’s easier to plan and budget.
  • The country saves scarce foreign exchange.

There are also other benefits besides the gains from denominating fees in local currency. When you host your data locally, you have more access to it. It’s easier to keep in touch with the hosting platform. Security concerns are diminished. And there’s no concern about data sovereignty.

Local Hosting: What Options Do You Have?

As Nigeria has grown more reliant on data and digital technology, cloud service providers and managed IT service companies have sprung up within its borders to fill the storage and computing needs of its many businesses. Many of these have been around for just a few years. A few have been in operation for much longer.

The quality of service you get from local hosting firms will vary as well. Some can leverage their extensive experience in the Nigerian environment, and provide high-level skill and support to their clients. But this isn’t the case for every player in this space.

Layer3 is one of the long-lived data hosting institutions in Nigeria. For over 14 years, it has helped organizations in the private and public sectors with the data storage and network solutions they need to thrive. And it continues to improve its offerings, as technology evolves and the demands of the IT market change.

Its virtual data centers and servers, backup and disaster recovery services are available to emerging businesses, large corporations, and public sector agencies, and are tailored to suit organizations from a wide range of sectors.

If you would like to find out more about Layer3 and local hosting, you can contact our team here.


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E-Business

OADC Lagos Reinforces Commitment to Local Data Hosting and Digital Transformation @ NDPC’s National Privacy Week Summit

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Open Access Data Centres (OADC) Lagos has reaffirmed its commitment to Nigeria’s data protection and digital transformation agenda through its sponsorship and active participation in the Nigeria Data Protection Commission’s (NDPC) National Privacy Week Summit.

The National Privacy Week Summit, organised by the NDPC, convened policymakers, regulators, technology providers, and industry stakeholders to promote data privacy awareness, strengthen compliance with the Nigeria Data Protection Act (NDPA), and advance conversations around data security, sovereignty, and responsible data governance.

As a sponsor of the event, OADC Lagos demonstrated its continued support for the Federal Government’s drive toward local data hosting and data domiciliation, which are increasingly critical to safeguarding sensitive information, enhancing regulatory compliance, and building trust in Nigeria’s digital economy.

Through its carrier-neutral, Tier III Design certified data centre in Lekki, Lagos, OADC provides secure, resilient, and compliant infrastructure that enables government institutions and private sector organisations to host and manage data locally while meeting international best practices.

Commenting on the engagement, Adesola Adesugba, Country Marketing Manager, Open Access Data Centres Nigeria, said: “We are proud to have supported the Nigeria Data Protection Commission through the National Privacy Week Summit and to stand alongside the government in advancing Nigeria’s digital transformation objectives.

“Strengthening local data hosting and domiciliation is fundamental to national data sovereignty, improved security, and sustainable digital growth, and OADC Lagos remains committed to enabling this future.”

OADC’s participation at National Privacy Week Summit underscores its role as a trusted digital infrastructure partner to government and enterprise, supporting secure cloud connectivity, regulatory compliance, and the long-term development of Nigeria’s digital ecosystem.

Open Access Data Centres is part of the WIOCC Group and operates open-access, world-class data centres across Africa, serving cloud providers, network operators, enterprises, and public sector institutions.


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E-Business

Kaspersky Launches OT Calculator to Align Cybersecurity Investments with Business Goals

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Kaspersky’s new online tool has been specially developed for industrial organisations to assess the potential costs associated with insufficient operational technology (OT) security.

By offering detailed financial forecasts, the calculator empowers senior management to make well-informed decisions regarding security investments.

Industrial organisations increasingly depend on interconnected systems, elevating cybersecurity to a critical factor in business resilience and profitability.

According to VDC Research, over 60% of industrial companies last year reported that cybersecurity breaches had led to significant costs. Despite this, a persistent disconnect remains between security teams and executive leadership as security professionals focus on minimising risk, while executives must balance cybersecurity concerns with broader business objectives. This misalignment often results in competing priorities and underfunded security initiatives.

To bridge this gap, Kaspersky has launched the OT Cybersecurity Savings Calculator, an innovative online tool designed specifically for industrial organisations to assess the potential costs of inadequate operational technology (OT) security¹.

The primary aim of this tool is to translate cyber risks into tangible financial metrics and support strategic discussions around priorities and budget allocation. By entering details such as their sector, sub-sector, region, company size, breach history, and existing cybersecurity measures, organisations can estimate their potential cost savings and receive customised, actionable recommendations.

The calculator benchmarks performance against industry peers and highlights the company’s position within the current threat landscape.

“We believe this calculator is a powerful resource for transforming complex cyber risk data into straightforward financial insights. It enables OT leaders, security professionals, and executive teams to develop clear, data-driven business cases and recognise the value of cybersecurity investments. With actionable guidance, it promotes a comprehensive approach to resource management and strengthens overall organisational resilience,” comments Andrey Strelkov, Head of Industrial Cybersecurity Product line at Kaspersky.


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E-Business

Local App Developers Rake $1m in Sales in 2025- NOTAP

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National Office for Technology Acquisition and Promotion (NOTAP) has said Nigerian software developers have reached significant milestones with locally made applications generating over one million Dollar in sales across domestic and regional markets.

Local App Developers Rake $1m in Sales in 2025- NOTAP

Dr Obiageli Amadiobi, director-general of NOTAP, said this in an interview with the News Agency of Nigeria (NAN), on Thursday in Abuja.

Amadiobi said the development signified the growing strength of Nigeria’s digital innovation ecosystem and how local innovation powers digital growth.

She said it was also a direct outcome of targeted support initiatives led by NOTAP.

She added that the initiative helped to build capacity, protect intellectual property, and connect developers to market opportunities.

According to the NOTAP boss, the journey from concept to impact started with understanding and securing intellectual property (IP) rights, a step many local innovators missed.

“Whether it’s a literary work, a laboratory invention, or a creative digital product, the process of bringing an idea to life demands immense time, skill, and dedication.

“An innovator might wake up with a solution to a pressing problem; spend months testing and refining it and achieve remarkable results; so it is their fundamental right to patent that creation and claim ownership.

“Without this protection, someone else could easily replicate their work; patent it in their name; and legally control what was built with Nigerian brainpower,” she said.

Amadiobi said that the challenge was compounded by widespread digital piracy and counterfeiting, which hit the ICT sector hardest.

“From copied software applications to replicated content on social platforms like TikTok, unauthorised duplication has become a major barrier to growth.

“We see talented young creators develop unique digital content or tools, only to watch others rebrand and profit from their work within weeks,” she said.

The DG noted that most popular online personalities with distinctive styles often don’t realise they could protect their original contributions through IP registration.

She said that to address these gaps and unlock the value of Nigerian innovation, NOTAP implemented a multi-pronged strategy,- a cornerstone initiative – which is the Local Vendor Policy.

“The Local Vendor Policy mandates that foreign technology firms entering Nigeria partner with domestic counterparts,’’ she said.

Amadiobi said that among the performing apps are solutions addressing critical local challenges such as a mobile health platform that now serves 750,000 users across six states.

“There is also the agricultural marketplace connecting smallholder farmers to buyers; and an educational tool that has been adopted by 200 schools to improve learning outcomes,” she said.

She added that the apps were developed by teams that gained skills and resources through NOTAP’s Local Vendor Policy.

According to her, the policy requires foreign technology firms operating in Nigeria to allocate a portion of their technical service fees to local partners.

“Three years ago, many of these developers were only providing support services to foreign companies.

“But today, they are building their own products that compete globally. 60 per cent of last year’s sales came from other African countries, showing our developers can lead on the continent,” she said.

The D-G explained that the one million dollar figure represented sales from over 50 locally developed apps, with individual developers earning between 5,000 dollars and 80,000 dollars from their products.

“Looking ahead, NOTAP aims to double these sales figures by 2027, with plans to expand support to developers focusing on fintech, renewable energy management, and climate adaptation tools.

“These are the sectors identified as high-growth opportunities for Nigerian innovation,’’ Amadiobi said


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