Amazon Web Services (AWS) has announced it will now accept payments in Naira. This move is expected to significantly reduce cloud costs for Nigerian businesses utilizing AWS’s European region. This decision comes as local cloud providers have been gaining traction by offering pricing in local currency as an alternative to AWS and Microsoft Azure. AWS aims to alleviate the financial burden on Nigerian businesses caused by foreign exchange costs and payment friction, especially given the Naira’s devaluation and broader macroeconomic pressures.
AWS stated that local currency payments would help customers avoid foreign exchange expenses and streamline transactions, particularly in countries with regulations limiting foreign currency access.
“This removes payment friction for customers in countries where local regulations put limits on the foreign currency amount a customer can access,” the company explained.
This addresses a key pain point for Nigerian businesses, as the Naira’s devaluation since 2023 has more than doubled cloud costs, which are typically priced in US dollars. By accepting Naira payments, AWS offers a more affordable and stable option, making it easier for companies to manage their operational costs.
This could reshape the competitive landscape of Nigeria’s cloud services market. Local cloud providers like Nobus, Layer3, and Okra’s Nebula have positioned themselves as cost-effective, local alternatives, capitalizing on FX volatility and USD-denominated pricing that has often inflated costs. These providers have engaged with government agencies to advocate for reduced dependency on foreign currency services. This is to show the economic benefits of supporting local providers.
AWS’s introduction of Naira payments follows its launch of AWS Local Zones in Lagos in January 2023, which aimed to reduce latency and enhance performance for Nigerian businesses. By lowering the financial barrier for Nigerian companies, AWS hopes to retain its competitive edge. However, the competition will likely extend beyond pricing to factors like local support and adaptability to Nigeria’s complex economic environment.
