Amazon Web Services (AWS), a global leader in cloud computing, announced it will now accept payments in Nigerian Naira, along with seven other local currencies for European customers. This move is poised to lower cloud costs for many Nigerian companies, including startups and commercial banks, which often host their services in AWS’s European region due to geographical proximity.
In a statement released on Monday, AWS highlighted the benefits of this shift: “With payments in their local currencies, customers can avoid foreign exchange costs associated with making foreign currency payments. This also removes payment friction for customers in countries where local regulations limit the amount of foreign currency accessible.”
This decision comes at a time when homegrown cloud providers, such as Nobus, Layer3, and Okra’s Nebula, are gaining traction by offering local pricing as a cost-effective alternative to AWS and Microsoft Azure. The devaluation of the naira and rising macroeconomic pressures have significantly increased cloud service costs, which are typically priced in U.S. dollars. By introducing naira payments, AWS addresses a critical pain point for Nigerian businesses, potentially reversing the trend of migration to local providers.
The new payment option complements AWS’s efforts to strengthen its presence in Nigeria. In early 2023, AWS launched its AWS Local Zones facility in Lagos, reducing latency and improving performance for Nigerian clients. By combining localized payment options with improved infrastructure, AWS aims to maintain its competitive edge against emerging local players.
Despite this strategic move, local providers remain well-positioned, having capitalized on FX liquidity challenges and volatility to offer more stable, affordable services. Many have actively engaged with government agencies, presenting themselves as key partners in reducing Nigeria’s reliance on USD-denominated cloud services.
AWS’s naira payment initiative may offer relief to Nigerian companies grappling with economic uncertainties, but the battle for dominance in Nigeria’s cloud market now hinges on more than just pricing. Local relevance, economic alignment, and the ability to navigate Nigeria’s complex financial environment will continue to shape the competitive landscape.
