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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

Microsoft Servers Hacked by Chinese Groups

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Chinese “threat actors” have hacked Microsoft’s SharePoint document software servers and targeted the data of the businesses using it, the firm has said.

Microsoft Servers Hacked by Chinese Groups

 

China state-backed Linen Typhoon and Violet Typhoon as well as China-based Storm-2603 were said to have “exploited vulnerabilities” in on-premises SharePoint servers, the kind used by firms, but not in its cloud-based service.

The US tech giant has released security updates in response and has advised all on-premises SharePoint server customers to install them.

“Investigations into other actors also using these exploits are still ongoing,” Microsoft said in a statement.

The firm said it had “high confidence” the hackers would continue to target systems which have not installed its security updates.

It added that it would update its website blog with more information as its investigation continues.

Microsoft said it had observed attacks in which hackers had sent a request to a SharePoint server “enabling the theft of the key material by threat actors”.

Charles Carmakal, chief technology officer at Mandiant Consulting firm, a division of Google Cloud, told reporter, it was “aware of several victims in several different sectors across a number of global geographies”.

Carmakal said it appeared that governments and businesses that use SharePoint on their sites were the primary target.

A number of adversaries who stole material encoded by cryptography were then able to regain ongoing access to the victims’ SharePoint data, he said.

“This was exploited in a very broad way, very opportunistically before a patch was made available. That’s why this is significant,” Carmakal said.

Carmakal said the “China-nexus actor” was deploying techniques similar to previous campaigns associated with Beijing.

Microsoft said Linen Typhoon had “focused on stealing intellectual property, primarily targeting organizations related to government, defence, strategic planning, and human rights” for 13 years.

It added that Violet Typhoon had been “dedicated to espionage”, primarily targeting former government and military staff, non-governmental organizations, think tanks, higher education, the media, the financial sector and the health sector in the US, Europe, and East Asia.

Meanwhile, Storm-2603 was “assessed with medium confidence to be a China-based threat actor”.

 

 

 


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E-Business

NIMC Warns Nigerians of Fake NIN Website

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National Identity Management Commission (NIMC) has issued a public warning that it is not associated with NINcard.com.

NIMC Warns Nigerians of Fake NIN Website

According to the commission, the website has been circulating online to offer services for Nigerians seeking National Identification Number (NIN) services.

NIMC, in a post on its official X account on Wednesday, said, “NINcard.com is not in anyway affiliated to NIMC. Stay vigilant!”

The warning was accompanied by screenshots of fake payment receipts and OTP request pages from the website, both of which were boldly stamped “FAKE” by NIMC to alert the public.


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E-Business

NITDA, API Partner Against Harmful Online Content

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National Information Technology Development Agency (NITDA), in partnership with the Advocacy for Policy and Innovation (API), has convened a one-day workshop in Abuja to advance dialogue on the draft Online Harm Protection (OHP) Bill to confront harmful online content.

NITDA, API Partner Against Harmful Online Content

The bill, a rights-based, locally rooted, and multi-stakeholder initiative, is aimed at addressing the challenges of the digital age.

The event, which held yesterday, brought together government officials, civil society, academics, digital platforms, and legal experts to shape a policy framework designed to combat online ills such as cyberbullying, disinformation, hate speech, digital exploitation, and gender-based violence, while safeguarding democratic freedoms and digital inclusion.

In his keynote remarks, Kashifu Inuwa, director general, NITDA urged a paradigm shift in the way society engages with digital technologies.

“For almost two decades, we have viewed digital technology through a consumer lens. But these technologies are not just products and services. They are transforming how we live, work, and interact. They shape our politics, our society, and our democracy,” he said.

Warning against unaccountable digital power in the hands of private corporations, the DG likened the digital journey to the tale of Alice in Wonderland, where initial fascination with innovation has given way to deeper concerns about privacy, autonomy, and manipulation by big tech platforms.

“We thought we were using Google, but now we realise Google is using us. Social media, once a tool of expression, has become a tool of surveillance and influence,” Inuwa noted.

He, therefore, emphasised the urgency of developing a democratic and accountable framework.  He explained that following the 2021 Twitter ban, NITDA facilitated dialogue between the government and platform operators, leading to a Code of Practice that stressed Nigeria’s sovereignty and legal standards.

According to him, the same process birthed the multi-stakeholder steering committee and the OHP White Paper in December 2024, laying the foundation for the current legislative push.

Earlier in her opening remarks,  Victoria Manya, co-founder, API, observed the moral and civic necessity of the bill.

Her words: “The internet did not break society, it merely revealed its unfiltered version. Every day, Nigerians are exposed to harassment, disinformation, exploitation, and even algorithmic violence. The OHP Bill is not a war on the Internet. It is a peace offering to its users, a social contract for a digital future that is safe, inclusive, and democratic.

“We cannot answer the question of algorithmic power with unchecked state control. We must answer it with shared, rights-based governance. This bill must not be written for the people, but with them.”


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