Along with seven other local currencies for European consumers, Amazon Web Services (AWS), the worldwide leader in clouds running numerous Nigerian startups and commercial banks, will now take Naira payments. This action might drastically cut the cloud prices of many Nigerian businesses which host their services in AWS’s European zone because of geographical closeness.
This action comes at a pivotal point as local pricing provided by homegrown cloud providers—an alternative to AWS and Azure—has been taking the stage.
AWS clarified in a Monday statement that this adjustment will assist clients avoid payment conflict and foreign exchange fees. “Customers can avoid foreign exchange fees connected with making foreign currency payments by paying in their local currencies,” the company added. “This also removes payment friction for customers in countries where local regulations put limits on the foreign currency amount a customer can access.”
For Nigerian companies, this change is important since macroeconomic pressures and devaluation of the naira have resulted in cloud costs—usually paid in US dollars—more than quadruple since 2023. By letting payments in naira, AWS is providing Nigerian firms with a better and more reasonably priced alternative for cloud services, therefore solving one of the main issues that have drove Nigerian enterprises towards local cloud providers.
The move by AWS will change the competitive environment of Nigeria’s cloud service industry. Recently launched Nebula by homegrown cloud providers Nobus, Layer 3, and Okra have spent much of 2024 marketing themselves as reasonably priced local substitutes for AWS and Microsoft’s Azure.
Many of these local firms underlined their competitive edge at a time when FX liquidity and volatility meant USD-denominated pricing could drive costs up 2-3x in a week.
Some even visited state and federal government offices, presenting themselves as possible partners to help Nigeria rely less on USD-denominated services. The theme was clear: supporting Nigeria’s economic resiliency by patronising local cloud providers is more than just a cost-effective choice.
AWS’s choice to take naira payments in reaction to local cloud providers’ increasing popularity in Nigeria Often a crucial consideration since many Nigerian organisations host their services in AWS’s European zone due of geographical closeness, AWS started its AWS Local Zones facility in Lagos in January 2023 to lower latency and improve performance for Nigerian companies. AWS may establish its presence in the Nigerian market by providing a new payment option alongside this infrastructure, particularly if local players continue to offer an appealing, economically aligned alternative.
AWS has gained advantage by removing the obstacle allowing Nigerian businesses to pay for cloud services in their native tongue, but the rising local alternatives could still be a difficulty. These days, it’s not only about cost; it’s also about local relevance and supporting companies negotiating the complexity of Nigeria’s economic landscape.
CREDIT: Nairaland, Allschoolabs.
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