Okra, a leading Nigerian fintech startup known for its open-banking services, has launched Nebula, a cloud infrastructure product aimed at offering local alternatives to international cloud giants like Amazon Web Services (AWS) and Microsoft Azure. Nebula’s entry into the market highlights a growing trend in Nigeria’s technology sector, where businesses are increasingly seeking affordable, locally-based cloud solutions amidst a challenging economic landscape.
Shifting Towards Local Cloud Providers
The launch of Nebula aligns with the increasing popularity of homegrown cloud providers like Nobus, Layer3, and Galaxy, all of which promote themselves as cost-effective alternatives to global players. As economic conditions tighten in Nigeria, local cloud providers are capitalizing on their ability to offer services priced in naira—a significant advantage given the devaluation of the currency. This shift is crucial for businesses that are reducing their exposure to the U.S. dollar as operating costs, particularly in the tech industry, have more than doubled in the last year due to currency fluctuations.
Fara Ashiru, CEO of Okra, highlighted this in a LinkedIn post, emphasizing that African businesses have long been dependent on expensive imported solutions. “For too long, Africa has leaned on imported solutions, paying premiums for software and services,” she stated, noting that Nebula would offer cloud infrastructure solutions at local rates.
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Cloud Costs and Forex Burden
For many Nigerian companies, the rising cost of cloud services hosted on international platforms has become untenable. Providers like AWS, Google Cloud, and Azure charge in U.S. dollars, creating significant financial strain for Nigerian businesses amid currency devaluation. Local cloud companies like Nebula are marketing themselves not only as cheaper options but also as part of a larger strategy to alleviate Nigeria’s forex burden by reducing reliance on dollar-based services.
The push for local cloud services is also supported by the 2019 National Cloud Computing Policy, which encourages government agencies to prioritize local cloud providers over international alternatives. In July 2024, TechCabal reported that several Nigerian cloud companies were in discussions with state and federal government institutions, positioning themselves as the preferred cloud service providers under this mandate. Some of these providers even considered forming a consortium to bolster their efforts in gaining government contracts.
Okra’s Shift to Cloud Services
Originally an open-banking business, Okra has undergone significant changes in recent years. According to a TechCabal report from July 2024, Okra discontinued at least three of its initial products, signaling a possible softness in demand for its open-banking offerings. The move into the cloud space with Nebula represents a strategic pivot for Okra, allowing the company to diversify its revenue streams in response to market conditions. By venturing into the cloud market, Okra joins the ranks of other Nigerian firms that are tapping into the demand for local infrastructure solutions.
Market Uncertainty and Opportunities
Despite the growing interest in local cloud solutions, questions remain about the overall market size for these services. One investor cited by TechCabal questioned whether the market for open-banking and local cloud services in Nigeria is large enough to support sustained growth. However, as more Nigerian companies seek ways to cut operational costs and mitigate the effects of currency devaluation, the demand for cost-effective cloud solutions may continue to rise.
Local cloud providers, including Nebula, are positioning themselves not only as affordable alternatives but also as critical players in helping to reduce the country’s dependency on foreign exchange, a major pain point for businesses across sectors. By offering cloud services at local currency rates, these companies hope to gain a competitive edge and secure long-term growth.
Conclusion
With the launch of Nebula, Okra has entered the competitive cloud infrastructure market at a time when Nigerian businesses are grappling with economic challenges and rising operational costs. As companies look for ways to mitigate the effects of the naira’s devaluation, local cloud providers like Nebula are poised to fill the gap, offering affordable, locally-based solutions that also align with national policies to promote homegrown technology services. The cloud market in Nigeria is evolving rapidly, and Nebula’s entrance could mark a significant shift in how businesses approach their digital infrastructure needs.
