Amazon Web Services (AWS), a leading global cloud provider widely used by Nigerian startups and commercial banks, has announced that it will now accept payments in Naira, among seven other local currencies for European customers. This move is expected to benefit many Nigerian companies that host their services in AWS’s European region due to its proximity, potentially reducing their cloud costs.
This development comes at a crucial time as local cloud providers in Nigeria have been gaining traction by offering pricing in local currencies as an alternative to AWS and Azure.
In a recent statement, AWS revealed that accepting payments in local currencies will help customers avoid foreign exchange costs and payment challenges. By enabling payments in Naira, customers can bypass foreign exchange fees related to making payments in foreign currencies, as well as eliminate payment obstacles in countries with restrictions on accessing foreign currencies.
This shift is particularly significant for Nigerian businesses facing challenges due to the devaluation of the Naira and economic pressures, causing cloud costs—typically denominated in US dollars—to surge since 2023. By introducing Naira payments, AWS is providing Nigerian companies with a more seamless and cost-effective option for cloud services, addressing a major concern that has led many Nigerian businesses to explore local cloud providers.
AWS’s decision to accept Naira payments marks a shift in Nigeria’s cloud services market landscape. Local cloud providers such as Nobus, Layer3, and Okra’s Nebula have been positioning themselves as affordable alternatives to global giants like AWS and Azure, particularly emphasizing their competitive pricing advantages amid fluctuating foreign exchange rates.
Some local cloud providers have engaged in discussions with government agencies at both state and federal levels, positioning themselves as potential partners to reduce Nigeria’s reliance on services priced in US dollars. The message is clear: supporting local cloud providers not only offers cost-effective solutions but also contributes to Nigeria’s economic resilience.
By responding to the increasing popularity of local cloud providers in Nigeria, AWS’s move to accept Naira payments complements its AWS Local Zones facility launched in Lagos in January 2023. This infrastructure improvement aimed to enhance performance for Nigerian businesses, especially those hosting services in AWS’s European region due to geographical proximity. With the introduction of Naira payments alongside this infrastructure enhancement, AWS aims to strengthen its position in the Nigerian market, even as local providers continue to present compelling economically-aligned alternatives.
While AWS has made it easier for Nigerian companies to pay for cloud services in Naira, the growing presence of local cloud providers poses a competitive challenge. It’s no longer just about pricing; it’s also about relevance to the local market and assisting businesses in navigating Nigeria’s economic complexities.