Amazon Web Services (AWS), a subsidiary of Amazon that provides cloud computing services to businesses across the world, says it is now accepting naira payments for its services. AWS, which is the global leader in this space, disclosed the new development on its website.
Read more about Business
The naira is one of 8 local currencies now supported by Amazon Web Services. It was mentioned alongside the currencies of Chile, Colombia, Egypt, Poland, Romania, Ukraine, and Uruguay.
A large number of Nigerian businesses rely on AWS for their cloud needs. But they have had to pay for its services in foreign currency, as it did not accept naira payments. The new development removes this challenge, which has demanded a significant amount of expenditure from local companies.
Also, some of the new entrants on AWS’s list of approved currencies are European. This is consequential for its Nigerian users, as they tend to host their cloud resources on AWS’s facilities in Europe. The new payment policy is therefore likely to reduce the cost of hosting with the firm.
Sign up for the Connect Nigeria daily newsletter
AWS’s acceptance of naira payments is particularly important for at least one reason: exchange rate fluctuations. Nigerian businesses have found it increasingly difficult to meet their financial obligations to foreign cloud service providers, including AWS and Microsoft Azure. They pay for these services in dollars; staying subscribed to these providers has become increasingly expensive, due to the fall of the value of the naira relative to the dollar.
Local cloud providers have stepped in, offering themselves as less expensive, stable-priced alternatives to their foreign counterparts. In the past few years, they have marketed their home-grown solutions as ideal, in comparison to services that had to be paid for in other currencies. Some even pushed for the government to implement rules for the localization of hosting, especially for public sector establishments.
In recent times, Nigerian businesses have increasingly gravitated towards local cloud providers, thanks to what has been perceived as their more stable pricing.
Register to attend the CN Business Mixer
The announcement by AWS that it will now be accepting naira payments could disrupt the current tilt towards local providers. That’s because it weakens a major advantage that the latter have had over it. Businesses that have to choose between AWS and Nigerian cloud vendors no longer have to consider such things as exchange rate volatility and the relative difficulty in obtaining foreign exchange.
Did you find this article useful? Contact us: [email protected]
