From January 1, 2027, every financial institution operating in Nigeria's payment system must store and manage locally generated payment transaction data within the country. The Central Bank of Nigeria (CBN) set the deadline in a June 15, 2026 circular, and it applies to deposit money banks, microfinance banks, mobile money operators, switching and processing companies, payment terminal service providers, payment solution service providers, super agents and other licensed operators.

The scale explains the urgency. Data from the Nigeria Inter-Bank Settlement System (NIBSS) showed electronic transactions in the first three months of this year reached N1.05 quadrillion across more than 12 billion transactions. As digital platforms carry that volume, the CBN worries about data security, regulatory oversight and the economy's ability to withstand external disruptions, from technological failures to geopolitical tensions.

What does the directive actually require?

Dr Rakiya Yusuf, Director of the CBN's Payment System Supervision Department, said the policy preserves the regulator's access to transaction records from creation to destruction. Speaking at a stakeholder engagement on implementation, she traced the problem to the shift from paper to digital.

Before digital banking spread, nominal ledgers, cash flows and vouchers sat inside bank branches, where CBN supervisors and examiners could inspect them during regulatory examinations. The regulator's responsibility has not changed; only the format of the records has.

"It is the Central Bank's responsibility to ensure financial system stability has not changed. The way they do it is to have unfettered access to it. From the creation of that data to the destruction of that data is a cycle. It is a whole life cycle. So, we are saying that the data should reside in the country to be accessed when we need it throughout its life cycle," Yusuf said.

She specified what must stay local: customer identification details, transaction information and the channels through which payments were made. "But within Nigeria, where the data is generated, we want to know who paid, what was paid, and whether it was successful," she said.

The directive does not bar foreign financial institutions from keeping information about transactions involving customers within their own jurisdictions. The CBN wants the complete Nigerian end of such transactions to remain accessible locally.

Why is infrastructure dependence a national security issue?

Kashifu Abdullahi, Director General of the National Information Technology Development Agency (NITDA), framed data localisation as economic security. He asked whether Nigeria could sustain essential financial services if a major disruption hit the international infrastructure some banks depend on.

"I want you to imagine what will happen to our economy if, tomorrow, a major submarine cable disruption or geopolitical crisis prevents our banks from accessing critical digital infrastructure hosted outside our country. Can our citizens still transfer money? Can businesses still receive payments? Can our banks keep processing transactions? Can our economy continue functioning?" he questioned.

Abdullahi said the National Sovereign Cloud Initiative aims to build Nigeria's capacity for digital self-determination, giving the country independence in choosing technology, infrastructure and standards without lock-in to a particular vendor, country or geopolitical arrangement. He rejected the isolation reading of the policy.

"Digital sovereignty is not about politics. It is not about isolation, and it is not about building everything ourselves. It is about building our digital capacity to compete in the world we are in today," he said.

NITDA is working with the CBN to help financial institutions meet the localisation requirement. Abdullahi said Nigeria's technology ecosystem can support the transition, and the government will work with global technology providers and hyperscalers while adopting existing international certifications that meet sovereign infrastructure requirements.

How ready is the industry?

A CBN survey found that more than 50 per cent of industry operators are ready to comply. Yusuf expressed optimism that further engagement would close the remaining readiness gaps, and said the regulator is prioritising support over punishment. "Sanction is surely not the first in our mind when it comes to enforcement. So what is really first in our mind is to ensure that everybody is handheld," she said.

The warning followed anyway: deliberate non-compliance will attract sanctions. "When we see that there is a deliberate attempt to scrutinise, of course, sanction will come. There will be sanction for non-compliance," she added.

The June 15, 2026 circular, titled 'Introduction of Market Structure Requirements, Data Localisation, Ultimate Beneficial Ownership Disclosure, and Systemic Oversight Measures in the Nigeria Payments System', flags operational dependence, market concentration and systemic importance as drivers. For operators with infrastructure and arrangements tied to foreign jurisdictions, the next two years decide the migration path.