Nigeria’s reliance on foreign cloud infrastructure is costing the country an estimated $850 million annually, equivalent to approximately ₦1.13 trillion, according to research cited at the BUILD 2026 conference in Abuja.
The estimate was disclosed by Luminate chief executive Melanie Hui during discussions on Africa’s position in the global artificial intelligence economy, bringing renewed attention to the economic consequences of dependence on a limited number of foreign technology providers.
The research highlights a growing policy challenge for Nigeria as businesses, financial institutions, government agencies and technology startups increasingly depend on cloud computing to operate digital services and develop artificial intelligence applications.
Cloud computing becomes an economic issue
Cloud infrastructure enables organisations to store data, host applications, run analytics and access computing resources without having to build and maintain all the necessary equipment themselves.
However, when these services are sourced predominantly from foreign providers, a significant portion of technology expenditure may flow outside the domestic economy. Dependence on external platforms can also create questions about data governance, operational resilience, pricing and the ability of local companies to control critical digital systems.
The issue is particularly important as artificial intelligence adoption increases demand for computing capacity, specialised chips, data centres and reliable electricity.
Nigeria’s technology ecosystem has made progress in digital payments, online commerce and telecommunications, but developing more advanced digital services will require infrastructure capable of supporting growing data and computing demands.
Local infrastructure offers opportunities
At BUILD 2026, Communications, Innovation and Digital Economy Minister Bosun Tijani called for coordinated African investment in shared computing infrastructure, broadband connectivity and other critical technologies.
The government also highlighted a proposed Nigeria–Togo data park and expanded fibre connectivity as part of efforts to strengthen regional digital capacity.
The strategy is intended to help African countries pool resources for large-scale computing projects that might be difficult for individual markets to support independently.
For technology businesses, expanding local cloud and data-centre capacity could create opportunities in hosting, cybersecurity, enterprise software, data management and AI services.
However, building domestic alternatives would require substantial investment, reliable power, technical expertise and competitive pricing. Local infrastructure would need to deliver dependable services rather than simply replace foreign providers.
The policy challenge, therefore, is not necessarily to eliminate international cloud services, but to reduce excessive dependence, strengthen domestic capabilities and ensure Nigeria captures more economic value from its growing digital economy.
