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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

NITDA Invites Public Input on Guidelines for IT Projects and Regulatory Instruments

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The National Information Technology Development Agency (NITDA) is seeking public feedback on several draft documents related to Information Technology (IT) projects and regulations. This aligns with NITDA’s commitment to an open and collaborative rulemaking.

The legal Documents Open for Public Review are:

  1. Guidelines for Licensing IT Projects Clearance Compliance Assurance Firms 2024;
  2. Regulatory Guidelines for Electronic Invoicing in Nigeria;
  3. Guidelines for Software Development; and
  4. Guidelines for Software Testing.

NITDA is also proposing the amendment of the Guidelines for Clearance of IT Projects for Federal Public Institutions (FPIs). guidelines, initially issued in 2018.

The Guidelines for Licensing IT Projects Clearance Compliance Assurance Firms 2024 aims to ensure that IT projects within Federal Public Institutions (FPIs) are managed and implemented according to approved and established standards, regulations, and best practices.

The instrument will regulate and professionalise the clearance of IT projects, ensuring that FPIs IT projects and initiatives are effectively conceptualised, designed, evaluated, and compliant with relevant Federal Government extant rules and standards in line with the Federal Government’s digital infrastructure goals and the Renewed Hope Agenda.

The Regulatory Guidelines for Electronic Invoicing is designed to promote transparency and deepen the use of technology for e-government automation as well as support the fiscal development of Nigeria through prudent administration of government revenue.

The guidelines will improve tax compliance, enhance efficiency and enhance standardisation and interoperability, thereby ensuring that Nigeria is ready for international digital commerce.

The Guidelines for Software Development establishes the minimum requirements for the development of software to be used by Nigerian government entities. It ensures that all software meets quality, security, and operational standards, promotes the growth of the local software testing market, and enhances the efficiency and effectiveness of government services.

The objectives of the guideline are to ensure that software is fit-for-purpose, meeting functional and non-functional requirements, and protect government institutions from operational risks through security, reliability, and performance standards.

To Participate:

These draft documents have undergone internal review and stakeholder consultations. NITDA now invites the public to contribute their feedback by reviewing the documents available for download at: https://nitda.gov.ng/draft-regulatory-instruments/

Public participation is crucial for NITDA to develop comprehensive and effective regulatory instruments.

By considering diverse perspectives, NITDA can ensure these guidelines best serve the needs of the IT industry and promote the development of a thriving digital economy in Nigeria.

Stakeholders are advised to  send in their review to [email protected] on or before 26th November 2024.

 


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E-Business

inq. Nigeria Celebrates Double Win at Tech Innovation Awards (TIA) 2024

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inq. Nigeria, the leading provider of Edge technology solutions in Nigeria, has achieved a remarkable double win at the 8th annual Technology Innovation Awards (TIA).

Known for delivering innovative, business-relevant solutions in Edge AI and IoT, SDN/NFV for Edge Cloud, Secure Access Service Edge (SASE), and Elastic Edge, inq. Nigeria was honoured as the “MVNO Provider of the Year” and received the “Cloud Product of the Year” award for its groundbreaking product, inq.Fabric.

The TIA Awards, one of the most prestigious accolades in the tech industry, celebrates exceptional individuals and organisations at the forefront of digital transformation. This year, inq. Nigeria was acknowledged for its comprehensive impact on the Nigerian tech landscape and its commitment to innovation.

The MVNO Provider of the Year award highlights inq. Nigeria’s leadership in delivering flexible, high-performance MVNO services in an emerging market.

Through its adaptable network platform, inq. empowers licensed MVNO providers with seamless, scalable connectivity solutions for data-driven applications and IoT, bypassing traditional infrastructure needs. This enables them to meet critical network demands and integrate efficiently across diverse environments in Nigeria’s evolving market.

The Cloud Product of the Year award celebrates inq. Nigeria’s inq.Fabric, a pioneering cloud connectivity solution that automates provisioning and routing for cloud access. This software-defined networking solution provides secure, agile, and reliable connectivity, supporting rapid deployment and scalability, which is critical for multinationals, government bodies, and SMEs in Nigeria.

Reflecting on this achievement, Ifeanyi Akosionu, Managing Director of Anglophone West Africa, inq. Nigeria, expressed his gratitude, stating, “These awards reflect our commitment to excellence and innovation. At inq., we are dedicated to continuously advancing our solutions, contributing to Nigeria’s economic growth by empowering businesses to thrive.”

He highlighted inq.’s leadership in supporting Nigeria’s emerging MVNO industry, noting, “Our MVNO solutions equip licensed providers with the agility, tools, and support needed to enter the market confidently and succeed in a dynamic landscape.” Akosionu also acknowledged Fabric by inq., which offers a flexible, cloud-based environment designed to boost productivity and streamline decision-making for clients.

Akosionu attributed inq.’s success to its close partnerships with a diverse clientele, whose collaboration inspired the development of forward-thinking solutions that address critical needs in connectivity and digital transformation across Nigeria.

Akosionu also extended appreciation to inq.’s dedicated team, saying, “Our thanks go to our valued customers for their trust and to our team at inq. Nigeria, whose dedication ensures that we consistently deliver world-class solutions.”

Previously, at the 7th edition of the TIA Awards, inq. Nigeria also received recognition as “IoT Solutions Provider of the Year” and “Digital Services Provider of the Year”, further solidifying its leadership in digital and IoT solutions.


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NDPC Partners Adeoluwa, Digital Influencer on Protection Awareness

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Nigeria Data Protection Commission (NDPC) has taken a significant step forward in its mission to promote data protection and privacy awareness in Nigeria by signing a Memorandum of Understanding (MoU) with Enioluwa Adeoluwa, renowned social media influencer.

NDPC Partners Adeoluwa, Digital Influencer on Protection Awareness

L-r: Enioluwa Adeoluwa, renowned social media influencer andDr. Vincent Olatunji, national commissioner, NDPC, at the signing of the MoU

This partnership aims to harness the power of social media to educate Nigerians on the importance of data protection and privacy.

The MoU, which will last for six months and is subject to renewal, is also aimed at creating a safer digital landscape for all Nigerians.

Speaking in Abuja, Dr. Vincent Olatunji, national commissioner, NDPC, stressed that with over 40 million Nigerians using social media daily, data protection and privacy have become crucial concerns.

He noted that this number highlights the immense importance of safeguarding personal information in Nigeria’s digital landscape.

“The Nigerian government is really taking this up to ensure that Nigerians are protected. More importantly, we know that about 40 million Nigerians go online every day, which is significant considering there are about 120 million people in total. That is huge. For this reason, we have to ensure adequate measures for safety to safeguard the data within our country.

“And Nigerians know their rights under the Nigeria Data Protection Laws and understand the kind of measures they need to implement to protect their data,” he stated.

Dr. Olatunji explained that the MoU was signed to increase awareness about data protection and privacy in Nigeria, helping individuals understand their privacy rights and ensuring that data controllers and processors are aware of their obligations.

The National Commissioner emphasised that, with Enioluwa’s social media following, this partnership will aid in educating the public about the Commission’s mandate and in advancing its roadmap for awareness creation.

“This partnership with Enioluwa Adeoluwa marks a significant milestone in our efforts to promote data protection and privacy awareness in Nigeria. We believe that social media has the power to shape public discourse and influence behaviour, and we’re excited to leverage this platform to drive positive change,” Olatunji said.

On his part, Adeoluwa emphasised that his motivation for collaborating with the Commission is not driven by financial gain, but rather by a desire to contribute meaningfully to Nigeria’s development. He encouraged more young people to participate in nation-building to ensure that Nigeria can become great again.

The Nigeria Data Protection Act, which established the Commission, was signed into law on June 12, 2023, by President Bola Tinubu.

Since then, the Commission, led by Dr. Olatunji, has been working actively to ensure that every Nigerian understands his or her privacy rights.

The Commission’s mandate includes protecting the rights of data subjects, promoting data protection best practices, and ensuring compliance with data protection regulations.

 

 

 

 

 


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