Morganable Technology / Digital Economy
Nigeria’s internet exchange infrastructure is generating estimated annual savings of $40 million, but technology industry leaders say the country needs stronger connections between telecoms networks, data centres and digital platforms to get more value from its growing digital economy.
Lagos —
Nigeria’s internet usage has increased as more people turn to online services for banking, communication, education, entertainment and business. However, the infrastructure supporting these activities still faces challenges, particularly in the way data moves between networks within the country.
The issue has become more important as businesses adopt cloud services and artificial intelligence (AI) tools that depend on reliable internet connections and faster data processing.
At a forum marking the 20th anniversary of the Internet Exchange Point of Nigeria (IXPN), industry leaders called for increased investment in local digital infrastructure. They said Nigeria must improve connections between telecommunications operators, data centres and digital platforms to support the next stage of its technology growth.
Speaking at the Women in Internet Infrastructure Forum in Lagos, Funke Opeke, founder and former chief executive officer of MainOne, said stronger local connections would help Nigeria process more data within its borders and retain greater economic value from digital activities.
She also stressed that the country could not fully benefit from artificial intelligence without the infrastructure needed to support the technology.
How Nigeria saves money through local internet exchange
The estimated $40 million annual savings linked to IXPN shows why local internet connections matter.
According to Ezinne Ekeghe, acting company secretary of IXPN, the organisation’s peak traffic has grown from 300 megabits per second (Mbps) to 125 gigabits per second (Gbps).
She cited a 2020 Internet Society report while explaining the economic impact of the growth. The figure represents estimated annual cost savings from keeping more internet traffic within Nigeria instead of relying on international networks to carry domestic data.
To understand this, consider what happens when someone in Lagos visits a website hosted in Nigeria. Ideally, the information should travel through local networks and reach the user without taking an unnecessary route through another country.
However, when local networks are not properly connected, some domestic traffic may pass through international routes before returning to Nigerian users.
This can increase the cost of moving data and add delays to internet services.
Local internet exchange points help address this problem. They provide a meeting point where different networks can exchange information directly.
As a result, internet service providers and telecommunications operators can reduce their dependence on expensive international transit for traffic that can be exchanged locally.
The savings do not mean that Nigeria no longer needs international internet connections. Rather, they show the value of using domestic infrastructure more efficiently.
Data centres become increasingly important
Data centres are another important part of this conversation.
These facilities house the computers and storage systems that businesses use to store, manage and process information. Banks, online retailers, technology companies and cloud service providers depend on them to keep their services running.
When digital services are hosted closer to the people using them, information can travel shorter distances. This can improve response times and support more reliable services.
However, building more data centres alone will not solve Nigeria’s connectivity problems.
The facilities must have strong connections to telecoms networks, internet service providers and other digital platforms. Without these links, the benefits of local data storage and processing may remain limited.
Opeke noted that Nigeria already has at least eight international submarine cables. These cables connect the country to global internet networks and provide access to international data capacity.
However, she argued that the country must improve its domestic connections to make better use of the infrastructure.
This is particularly important as AI applications, cloud computing and other digital services increase the amount of data businesses need to process.
Telecoms operators face a shared responsibility
Telecommunications operators and internet service providers will play a major role in improving local internet exchange.
These companies connect millions of Nigerians to online services and determine how information moves across their networks.
Internet peering allows two or more networks to exchange traffic directly. This can reduce the need to depend on distant networks to carry information between users and services within the same country.
However, effective peering requires technical cooperation and commercial agreements between the companies involved.
Some operators may have different investment priorities, network capacities and business interests. Therefore, getting them to work together remains an important part of the challenge.
The Nigerian Network Operators Group (ngNOG), IXPN and the Nigerian Communications Commission (NCC) have continued to support industry discussions around stronger interconnection.
The 2026 Nigerian Peering and Interconnection Forum, held in Lagos on October 28 and 29, brought together network operators, data centre providers, internet service companies, technology businesses and regulators.
The discussions covered local traffic exchange, internet peering, data centre infrastructure, content delivery and regional connectivity.
The forum provided an opportunity for industry participants to examine how better cooperation could improve internet performance and support the country’s expanding digital economy.
Artificial intelligence raises the stakes
The growing use of artificial intelligence makes the need for stronger infrastructure even more urgent.
AI tools require computing power, storage facilities and reliable connections to process information. Businesses using these tools also need networks that can support large amounts of data without frequent disruptions.
For Nigeria, this creates both an opportunity and a challenge.
Stronger domestic infrastructure could attract more technology investment, support local businesses and create opportunities for professionals working in data centres, network engineering and cloud computing.
However, weak connections and limited processing capacity could make it harder for local companies to compete with businesses operating in countries with more developed infrastructure.
The country also needs skilled professionals who can build, maintain and manage these facilities.
At the IXPN anniversary forum, industry leaders highlighted the importance of expanding opportunities for women in areas such as network engineering, cloud computing, data centre operations and cybersecurity.
IXPN also introduced a certification scholarship offering 10 professional training opportunities to students and National Youth Service Corps members as part of its anniversary activities.
The initiative reflects the need to develop local talent alongside infrastructure investment.
Investment must produce measurable results
Despite the potential benefits, Nigeria still faces challenges involving the cost of infrastructure, electricity supply, fibre deployment and access to funding.
Data centres and network facilities require reliable power to operate. Meanwhile, expanding fibre networks across different parts of the country requires significant investment.
There is also a need for policies that encourage cooperation without limiting competition among service providers.
Industry stakeholders must therefore move beyond discussions and work towards practical improvements.
These could include increasing the number of networks exchanging traffic locally, improving connections between data centres and telecoms operators, and expanding the capacity of internet exchange facilities.
Such steps would help Nigeria make better use of its existing infrastructure while preparing for future demand.
Nigeria’s digital growth depends on stronger connections
Nigeria has made progress in expanding internet access, but access alone is not enough. The country must also ensure that its networks can deliver digital services efficiently.
The estimated $40 million in annual savings linked to IXPN demonstrates the financial value of local internet exchange. However, the next stage will require more investment and cooperation across the industry.
For businesses and ordinary internet users, stronger domestic connections could support more reliable online services and reduce avoidable network costs.
As artificial intelligence and cloud computing become more important, Nigeria’s ability to connect its networks, host digital services and process data locally will help determine how much value it gains from the global technology economy.
