Virtually all the sectors of the Nigerian economy are feeling the impact of the current crisis rocking the country. The telecoms sector, which has contributed largely to the recent growth of the gross domestic product , is not exempted. Indeed, a sub-sector of the industry, the data centre segment, is currently threatened by rising energy costs in the country,
Unlike traditional brick-and-mortar establishments that can ration service hours, networks and data centres must operate around the clock, regardless of whether they serve a handful or millions of customers. The round-the-clock operation appears to have placed immense cost pressures on the companies even as they face slow growth in a high inflationary economy.
Currently, Nigeria’s grid electricity generation only supplies between 3,000 and 4,000 megawatts to millions of citizens, indicating a significant shortfall in power provision. As of January, the National Bureau of Statistics puts the inflation rate in Nigeria at 29.9 per cent and, painfully, the naira to dollar stance has hovered between N1600/$ against $1000/$ six months ago.
In an interview, Managing Director of MainOne, an Equinix company, Funke Opeke, said: “The Naira’s fluctuation has led to an increase in our operational expenses due to the higher costs of service contracts with OEMs and third-party vendors, ultimately impacting the data centre’s operational bottom line.”While cost is threatening, policies around local hosting of data have also not helped matters, especially due to a lack of political will.
According to the Chief Executive Officer of Medallion Data Centres Limited, Ikechukwu Nnamani, an engineer, the poor implementation of policy on local hosting of data has remained a hindrance as it is presently impacting negatively on data centre operations. According to him, cutting costs, however, is not the only reason to outsource. He said that choosing a reliable and competent provider will have a significant impact in terms of infrastructure management, technological updates, and information integrity maintenance.