Director-General Kashifu Inuwa Abdullahi announced plans to harness federal IT purchasing power as an anchor customer to attract private cloud infrastructure investments. The strategy is designed to leverage the government’s enormous demand for IT services to incentivise private investment in local cloud infrastructure.
The government’s IT spending is substantial, and using it as an anchor customer could provide the demand certainty needed to attract private investors. The move recognises that the government can play a catalytic role in developing the digital economy. The strategy's success will depend on the government’s ability to aggregate demand and offer attractive terms to investors.
This echoes the 2020 data localisation initiatives, which also sought to attract investment in local infrastructure. The mechanism then was different, but the result was the same: a focus on building digital sovereignty.
The winners: private cloud infrastructure investors, who gain a guaranteed customer; and the Nigerian digital economy, which benefits from improved infrastructure. The losers: foreign cloud providers, who may lose market share; and the government, which must execute the strategy effectively.
Bottom Line: NITDA wants to use federal IT purchases to attract cloud investment. The government is becoming an anchor customer. The question is whether the strategy will work or just create new inefficiencies.