Amazon Web Services (AWS), the global cloud computing leader supporting numerous Nigerian startups and commercial banks, has announced that it will now accept payments in Naira, in addition to seven other local currencies for its European customers. This strategic move is anticipated to significantly reduce cloud costs for many Nigerian companies that host their services in AWS’s European region due to geographical proximity.
This development comes at a pivotal time when local cloud providers have been gaining traction by offering pricing in local currencies as an alternative to AWS and Azure. In a statement released on Monday, AWS explained that this change will help customers avoid foreign exchange costs and payment friction.
With payments in their local currencies, customers can avoid foreign exchange costs associated with making foreign currency payments,” the company stated. “This also removes payment friction for customers in countries where local regulations put limits on the foreign currency amount a customer can access.
This shift is particularly significant for Nigerian businesses, as the devaluation of the Naira and macroeconomic pressures have caused cloud costs—often priced in US dollars—to more than double since 2023. By allowing payments in Naira, AWS is offering Nigerian companies a more seamless and affordable option for cloud services, addressing a key pain point that has driven many businesses toward local cloud providers.
AWS’s move is set to alter the competitive landscape in Nigeria’s cloud services market. Homegrown cloud providers such as Nobus, Layer3, and Okra’s recently launched Nebula have spent much of 2024 positioning themselves as cost-effective, local alternatives to AWS and Microsoft’s Azure. These local players have emphasized their competitive edge, especially during times when FX liquidity and volatility caused USD-denominated pricing to spike 2-3x in a week.
Some local providers have even engaged in discussions with government agencies at both state and federal levels, presenting themselves as potential partners to reduce Nigeria’s reliance on USD-denominated services. Their message has been clear: supporting local cloud providers is not only a cost-effective choice but also a way to bolster Nigeria’s economic resilience.
AWS’s decision to accept Naira payments is a response to the growing appeal of local cloud providers in Nigeria. In January 2023, AWS launched its AWS Local Zones facility in Lagos to reduce latency and improve performance for Nigerian businesses—an important factor since many Nigerian companies host their services in AWS’s European region due to geographical proximity. By offering a new payment option alongside this infrastructure, AWS aims to strengthen its position in the Nigerian market, even as local providers continue to offer an attractive, economically aligned alternative.
By enabling Nigerian companies to pay for cloud services in their local currency, AWS has created a competitive advantage for itself. However, the increasing presence of local cloud service providers may still present a challenge. The competition now extends beyond pricing—it involves local relevance and assisting businesses in navigating the complexities of Nigeria’s economic landscape.
