Demand for Local Hosting in Nigeria: Trends 2025

Why Local Hosting is Gaining Momentum in Nigeria

Local hosting is becoming a key choice for Nigerian businesses in 2025. Here's why:

• Faster Website Performance: Hosting data closer to Nigerian users reduces latency, improving website speed and user experience. Research shows a 1-second delay can cut conversions by 7%.
• Data Compliance: Nigerian data privacy laws are easier to follow with local hosting, keeping sensitive information within the country.
• Cost Savings: Paying in naira avoids exchange rate fluctuations and reduces costs compared to foreign hosting providers.
• Growing Market: Nigeria’s hosting market is projected to grow at 17.35% annually, reaching ₦622.5 billion by 2030.
• E-commerce and Mobile Usage: With e-commerce valued at $8.53 billion and 82% of online purchases made via mobile, businesses need hosting tailored for mobile-driven traffic.

Local hosting isn’t just a technical upgrade - it’s a smarter, more efficient way for Nigerian businesses to thrive in a rapidly growing digital economy.

IT Solutions: Discussing Digital Space in Nigeria with Nkemdilim Uwaje Begho of Futuresoft

Market Trends Driving Local Hosting Growth in 2025

Several factors - such as the rise of e-commerce, the dominance of mobile-first internet usage, and stricter regulations - are pushing Nigerian businesses to adopt local hosting solutions.

E-commerce Growth and SME Digital Transformation

In 2025, Nigeria’s e-commerce sector has reached a valuation of US$8.53 billion, with an expected annual growth rate of 11.8% through 2033. Small and medium-sized enterprises (SMEs) play a crucial role in this landscape, contributing nearly 50% to the country’s GDP. Impressively, 99% of Nigerian SMEs now accept digital payments, and 73% plan to expand their digital payment options further. Meanwhile, 70% are prioritising seamless and user-friendly payment systems.

According to Data Insights Markets:

"Competition is intense, but the market's size and growth trajectory signal significant opportunity for both established players and new entrants to participate in this dynamic and rapidly evolving sector".

This shift to digital platforms lays the groundwork for the growing importance of mobile internet and its impact on hosting needs.

Mobile Internet Growth and Hosting Needs

Mobile internet usage is reshaping hosting requirements in Nigeria. With 150 million mobile connections, covering 64% of the population, and 82% of online purchases made via mobile devices, hosting providers must now focus on optimising mobile content delivery. Social commerce platforms like Instagram and Facebook are also playing a significant role in driving mobile-first shopping experiences. Additionally, the increasing demand for cashless payment systems is boosting innovation in mobile wallet technologies.

These trends highlight the need for hosting solutions that can handle mobile-driven transactions efficiently, making local hosting an essential component for businesses aiming to stay competitive.

Local Hosting for Better Speed and Compliance

As digital and mobile trends continue to evolve, local hosting offers two distinct advantages: faster speeds and easier regulatory compliance. Research shows that even a 1-second delay in website loading time can reduce conversions by 7%. Local hosting within Africa boasts an average latency of 20–50 ms, compared to the 150–300 ms typical of global hosting. This performance gap can significantly impact Nigerian businesses looking to provide fast and reliable online experiences.

Here’s a comparison of key metrics between local and global hosting:

Metric	Local Hosting (Africa)	Global Hosting
Average Latency	20–50 ms	150–300 ms
Time Zone Support	Aligned with business	Often misaligned
CDN Optimisation	Regionalised	Generalised

Ashwin S., a Content Specialist at HOSTAFRICA, highlights these benefits:

"For businesses in South Africa, Nigeria, Kenya, and beyond, the benefits go beyond technical performance. Local hosting directly impacts website speed in Africa, helps meet data compliance in Africa, and ensures customer service that operates in your time zone".

As data privacy regulations tighten across Africa, local hosting not only simplifies compliance but also ensures high performance. Additionally, investing in local hosting has a broader economic impact: every naira spent at a local business generates three times more returns for the local economy compared to spending at foreign franchises.

These trends are driving Nigeria’s web hosting market, which is projected to reach US$181.92 million in 2025. The market is expected to grow at an annual rate of 17.35% through 2030, reaching a total volume of US$404.90 million by the end of the decade.

Market Data and Projections for Local Hosting in Nigeria

Nigeria's hosting industry is on a sharp upward trajectory, positioning local hosting as a key investment opportunity for 2025 and beyond. Here's a closer look at the numbers and factors driving this growth.

Hosting Market Growth Numbers

The Nigerian hosting market is currently valued at approximately ₦279.5 billion, with projections indicating an annual growth rate of 17.35% between 2025 and 2030. By 2030, the market is expected to hit US$404.90 million (₦622.5 billion). On average, businesses are forecasted to spend around US$2.26 (₦3,475) per employee in 2025.

Ahmad Mukoshy, the founder of Gigalayer, sheds light on the current state of the market:

"The current Nigerian market is worth over N10 billion per annum with over 400,000 websites across the globe".

This growth aligns with broader trends in cloud computing. Nigeria's cloud computing market is estimated to reach US$1.03 billion by 2025 and US$3.28 billion by 2030, growing at a compound annual growth rate (CAGR) of 25.98%. Similarly, the Nigeria Data Center Market is projected to grow to US$671 million by 2030, with a CAGR of 15.82%.

Market Segment	2025 Projection	2030 Projection	Annual Growth Rate
Web Hosting Market	US$181.92 million	US$404.90 million	17.35%
Cloud Computing Market	US$1.03 billion	US$3.28 billion	25.98%
Data Center Market	–	US$671 million	15.82%

Market Segment Analysis: B2B, B2C, and B2G

The hosting market in Nigeria is expanding across various sectors, each with unique growth drivers. The IT & Telecommunications sector leads as the largest end-user, followed by BFSI (Banking, Financial Services, and Insurance) and Government.

In the B2B space, large enterprises are driving cloud adoption, while small and medium enterprises (SMEs) are increasingly turning to cloud solutions for their scalability and cost efficiency. Within this category, the Software as a Service (SaaS) model is experiencing the fastest growth.

A notable example of cost-driven migration to local solutions is Okra, a fintech platform launched in 2020 by Nigerian entrepreneur Fara Ashiru. Initially operating on AWS, Okra faced rising costs as the Naira depreciated by 70% between 2020 and 2024. In 2024, Okra shifted its infrastructure to Nigerian and South African data centers to manage expenses. This move eventually led to the creation of Nebula, a company offering cloud hosting with Naira payment options.

The B2G (Business-to-Government) segment is gaining traction with initiatives like Galaxy Backbone, which began as a government interoperability project. It now provides cloud services to both public and private sectors via data centers in Abuja and Kano. Chidi Okpala, Head of Media at Galaxy Backbone, underscores the importance of local hosting:

"We are keying into our data sovereignty narrative".

In the B2C segment, the rise of e-commerce and mobile internet usage is driving demand for hosting solutions that can handle high traffic and deliver mobile-friendly experiences.

Main Growth Drivers in 2025

Several factors are fueling the expansion of Nigeria's local hosting industry. Government-led digital transformation initiatives are encouraging public institutions and SMEs to prioritize domestic service providers. Infrastructure development is also playing a significant role. For instance, the Nigeria Data Center Server market is projected to reach US$198.40 million by 2025, with a CAGR of 20.30% from 2025 to 2033.

Currency challenges are another key driver. As Iyinoluwa Aboyeji, Managing Partner at Accelerate Africa, points out:

"I think AWS has realised that they must accept naira because if you don't accept naira you are wasting your time".

Aboyeji further advises businesses:

"We regularly advise our portfolio companies to look out for local solutions where possible and manage major costs like [cloud] in naira".

Strategic partnerships are also shaping the market. In May 2024, MTN Nigeria collaborated with Microsoft to deliver advanced data hosting solutions and Microsoft Business Licenses to SMEs, accelerating digital adoption. Similarly, Okra secured US$16.5 million in July 2024 to develop cloud infrastructure, offering a cost-effective alternative to global providers.

Concerns around data sovereignty are another major factor. Bruce Ayonote, CEO of Suburban Cloud, highlights this issue:

"How does it sound for Nigerian voters' data to be stored in Europe? As long as we continue to ask this question, we will always arrive at the point where we build our own cloud infrastructure".

These trends are financially impactful, with Nigeria currently spending over US$850 million annually on foreign cloud services.

Benefits of Choosing Local Hosting Providers

Local Hosting Benefits

Opting for Nigerian hosting services isn’t just about proximity. For businesses navigating Nigeria's fast-growing digital economy, local hosting offers tangible performance gains and strategic perks that can directly affect profitability.

Performance and Speed Advantages

Hosting locally in Nigeria significantly reduces latency, with response times ranging from 20–50 milliseconds compared to the 150–300 milliseconds typical of global hosting providers. This faster performance leads to quicker page loads and smoother user experiences - factors that search engines like Google take into account when ranking websites.

Data Sovereignty and Compliance

Local hosting also ensures better control over data and compliance with Nigerian data protection laws. For businesses handling sensitive customer information, this is a critical advantage for meeting regulatory requirements and maintaining trust.

Economic and Currency Benefits

The financial benefits of local hosting are especially noteworthy in light of currency fluctuations. Since 2020, the naira has depreciated by 70% against the dollar. Paying in naira not only eliminates conversion fees but also allows for more stable and predictable budgeting. Furthermore, spending locally has a multiplier effect: every dollar spent with a local business generates three times more value for the Nigerian economy compared to spending with foreign providers.

Customer Support and Communication

Local hosting providers offer tailored customer support that aligns with Nigerian market needs. Operating within the same time zones and often providing assistance in local languages, they ensure faster, more personalised service. These advantages in speed, compliance, and cost make local hosting a smart choice for Nigerian businesses.

Important Factors for Nigerian Businesses

Beyond these benefits, there are several key considerations Nigerian businesses should keep in mind when choosing a hosting provider.

Infrastructure Reliability and Performance

The location of servers directly impacts website speed and reliability for local users. Providers with strong infrastructure can deliver consistent uptime and low latency, which is particularly crucial given the dominance of mobile users in Africa’s online landscape.

Security Standards and Compliance

Compliance with both international and Nigerian regulations is non-negotiable. Providers should offer advanced security measures to protect sensitive data while adhering to local data protection laws, helping businesses build customer trust.

Pricing Structure and Payment Options

Transparent pricing in naira simplifies budgeting by eliminating hidden conversion fees. This clarity ensures businesses can manage costs effectively, making local hosting an affordable option.

Scalability and Technical Requirements

As businesses grow, their hosting needs evolve. Providers should offer scalable solutions that cater to varying requirements - from shared hosting for startups to dedicated servers for large-scale enterprises.

Integration with Local Services

Seamless integration with local payment gateways is essential for e-commerce and other online businesses. This integration not only facilitates smooth transactions but also enhances the overall user experience and reliability of services.

Customer Support Quality

Reliable customer support plays a vital role in keeping operations running smoothly. As Oluwaseun Adekunle, founder of a software development firm in Ibadan, puts it:

"By harnessing the power of local cloud hosting, Nigerian businesses can unlock new possibilities, drive operational excellence, and chart a course towards sustained success in the digital era".

For businesses considering a gradual shift, a hybrid hosting model offers a balanced solution. Sensitive data can be stored on local servers, while day-to-day operations leverage the scalability of cloud services. This approach combines the benefits of data sovereignty with the flexibility of cloud technology.

sbb-itb-3ab6962

Case Study: TFhost Nigeria as a Local Hosting Provider

TFhost Nigeria's Service Overview

Since its establishment in 2004, TFhost Nigeria has been a go-to provider for hosting services tailored to the needs of Nigerian businesses. Their offerings cover a wide range, including domain registration, shared hosting, VPS hosting, dedicated servers, WordPress hosting, SSL certificates, and professional email hosting.

One of TFhost's standout features is its Tier 4 data centre located in Nigeria. This ensures that data stays local, providing faster speeds and meeting Nigeria's data residency and regulatory requirements. For businesses, this means compliance and top-notch performance, all delivered locally.

TFhost has solutions for businesses of all sizes. Startups can opt for affordable shared hosting plans, while larger companies can benefit from dedicated servers for critical applications. Their WordPress hosting is perfect for modern content management, and their cloud services offer the scalability that growing businesses need. Over the past three years, TFhost has significantly expanded its infrastructure, adding more storage, cloud options, and dedicated servers to keep up with increasing demand. This continuous growth ensures they remain a reliable choice for businesses.

Features and Benefits for Nigerian Businesses

TFhost Nigeria provides 24/7/365 customer support through multiple channels, including telephone, live chat, WhatsApp, ticketing, and a contact form. They also back their services with a 99.99% uptime guarantee, ensuring reliability for their clients.

For businesses migrating from other providers, TFhost offers website migration services and access to a detailed knowledge base to make the transition smooth. Their quality has been recognised with industry awards and nominations from NiRA (Nigeria Internet Registration Association). Plus, customer reviews on Trustpilot highlight their dependable support and consistent uptime.

TFhost Pricing Plans in NGN

TFhost Nigeria combines high-quality services with pricing designed for the local market. They offer flexible payment options, including bank transfers, credit/debit cards, Paystack, and CashEnvoy, making transactions simple.

For businesses just starting out, their shared hosting plans are affordable and accessible:

Plan	Monthly Price	Storage	Data Transfer	Email Accounts
Micro	₦220	2GB	2GB	Unlimited
Business	₦400	5GB	20GB	Unlimited
Premium	₦800	20GB	45GB	Unlimited
Corporate	₦1,200	30GB	100GB	Unlimited

For businesses needing more control and resources, VPS hosting is available:

VPS Plan	Monthly Price	Storage	RAM	Processor
VPS1	₦10,800	100GB	2GB	2 Core Intel®
VPS2	₦18,000	250GB	4GB	2 Core Intel®
VPS3	₦28,800	500GB	8GB	4 Core Intel®

For enterprise-level needs, their dedicated server hosting plans deliver robust performance:

Server Plan	Monthly Price	Storage	RAM	Processor
DS1	₦42,840	1,000GB	8GB	Intel Xeon E3 1225v2 4 Cores
DS2	₦50,040	1,000GB	16GB	Intel Xeon E3 1225v2 4 Cores
DS3	₦53,640	1,000GB	32GB	Intel Xeon E3 1245v2 4 Cores

TFhost also offers essential services such as domain registration starting at ₦3,500 per year, email hosting from ₦4,500 annually, and SSL certificates starting at ₦9,230 per year. For businesses interested in reselling hosting services, reseller plans are available, starting at ₦15,000 monthly for Bronze Reseller and going up to ₦50,000 monthly for Gold Reseller. These plans include unlimited storage and unmetered data transfer.

Future Outlook for Local Hosting in Nigeria

Main Drivers for Continued Growth

Nigeria's push towards digital transformation is gaining momentum, supported by a ₦850 billion government investment in digital infrastructure aimed at driving local hosting growth well beyond 2025. As Bosun Tijani, the Minister of Communications, Innovations, and Digital Economy, noted:

"This investment is part of a larger vision to provide every Nigerian with access to high-quality digital services, while safeguarding their digital identities".

This funding is central to initiatives like broadband expansion and the ongoing rollout of 5G technology.

The country's goal to increase broadband penetration from 50% to over 70% by 2027 is a key factor. Combined with the 5G rollout, which is expected to reach 72 million users with a 26% adoption rate, this will significantly boost the demand for local hosting infrastructure.

Projections indicate that Nigeria's data centre market could grow to ₦287 billion by 2030, with local storage currently accounting for less than 10% of consumption. Additionally, the construction market is forecasted to rise from ₦107 billion in 2024 to ₦247 billion by 2029. Data sovereignty remains a critical focus, as Ugochukwu Obi explains:

"Embracing these homegrown solutions not only allows Nigerian businesses to operate more efficiently but also helps foster a more sovereign and economically stable digital landscape".

These factors create significant opportunities for Nigerian enterprises to leverage the benefits of local hosting.

Opportunities for Nigerian Businesses

For Nigerian businesses, the rapid development of local hosting infrastructure opens up exciting possibilities. With over 142 million active internet subscribers and ICT contributing 11.30% to Nigeria’s GDP in Q3 2024, the digital landscape is ripe for growth.

E-commerce continues to be a major driver of hosting demand, with online transactions reaching approximately ₦12 billion across various platforms. With more than 75% of internet users in Nigeria accessing the web via smartphones, businesses must prioritise mobile-optimised hosting to remain competitive.

Recent advancements highlight the potential of local hosting solutions. For instance, in December 2024, Huawei Technologies launched a local cloud service in Nigeria, slashing latency for local customers from over 80 milliseconds to just 15 milliseconds. Similarly, MTN Cloud, introduced in June 2025, operates from a 4.5 MW Tier III data centre in Lagos and offers services priced in naira, making them more accessible for local businesses.

The Nigerian Cloud Computing Market is set to grow exponentially, with projections reaching ₦440 billion by 2025 and ₦1.4 trillion by 2030, driven by a CAGR of 25.98%. This growth is particularly noteworthy given Nigeria's current annual expenditure of ₦364 billion on foreign cloud providers.

The increasing focus on data residency within Nigeria aligns with regulatory requirements while fostering the development of a more secure and self-reliant digital ecosystem.

Infrastructure investments are also scaling up to meet demand. For example, Open Access Data Centres announced plans in March 2025 to build a new Lagos facility with a 24 MW power capacity, with the first 12 MW phase expected to be operational by 2026. Currently, Nigeria has around 65.8 MW of third-party data centre capacity, with an additional 327.8 MW either under construction or in the planning stages.

FAQs

Why should Nigerian businesses choose local hosting over international providers?

Local hosting offers several advantages for businesses in Nigeria. One standout benefit is faster website load times for local visitors. Since the servers are closer, latency is reduced, ensuring a smoother browsing experience.

It also comes with improved data privacy and security. Storing data within Nigeria helps businesses comply with local regulations and minimises risks tied to international data transfers.

Another perk? Responsive customer support that understands the Nigerian market. With local expertise and services operating in the same time zone, resolving issues becomes quicker and more efficient.

Finally, opting for local hosting contributes to the Nigerian economy by encouraging job creation and skill development in the tech sector. For businesses aiming to boost performance while supporting local growth, this choice ticks all the right boxes.

How are e-commerce growth and rising mobile internet usage shaping the demand for local hosting in Nigeria?

The Rise of E-commerce and Hosting Demand in Nigeria

Nigeria's e-commerce industry is on a fast track, with projections placing its value at an impressive ₦7.2 trillion by 2025. This rapid growth is fueling the demand for local hosting solutions, as businesses increasingly shift online to serve the rising number of digital shoppers. To thrive in this competitive space, companies need hosting services that can handle transactions smoothly, ensure robust security, and deliver quick website performance.

Adding to this momentum is the surge in mobile internet usage. Nigeria now boasts over 142 million internet subscribers, with broadband penetration nearing 48.15% as of April 2025. This widespread connectivity is powering mobile-driven commerce and online services, making it crucial for hosting providers to cater to the unique demands of Nigeria's digital ecosystem.

Local hosting companies, such as TFhost Nigeria, are stepping up to the challenge. They provide faster, secure, and scalable hosting solutions tailored to support the nation's expanding online economy. These services are essential for businesses aiming to stay competitive in Nigeria's digital marketplace.

What is driving the rapid growth of Nigeria's hosting market by 2030?

Nigeria's Hosting Market: A Growing Digital Hub

Nigeria's hosting market is on a remarkable upward path, driven by several transformative factors. Projections show the web hosting sector growing at an annual rate of 17.35%, with its market size expected to hit ₦310.5 billion (US$404.90 million) by 2030. Similarly, the data centre market is set to expand at a yearly growth rate of 15.82%, reaching a projected value of ₦514 billion (US$671 million) within the same timeframe.

This surge is powered by the rising adoption of cloud-based solutions, the growing importance of edge computing, and substantial investments in green data centres. Moreover, initiatives aimed at decentralising digital infrastructure and improving local hosting services are playing a key role in this expansion. Together, these factors paint an optimistic picture for Nigeria's digital landscape and its hosting industry.