Lead Cloud Engineer, Sherifdeen Adeyemi, has sounded the alarm: cloud infrastructure is quietly suffocating companies across Nigeria and Africa.
Nigeria’s startup scene has never looked brighter. From Lagos to Abuja, young innovators are building products that could reshape banking, agriculture, and more across the continent. But beneath the funding headlines and tech conference glamour lies a harsh truth: the very cloud systems powering these dreams are draining the lifeblood of the companies that depend on them.
The warning signs aren’t new. When Figma reportedly spent around $110 million of its $190 million revenue on cloud costs in 2022, Silicon Valley was stunned. For Nigerian startups with far smaller budgets and the extra burden of currency volatility, the reality is even more brutal.
Take a typical Nigerian fintech. A $2–5 million Series A raise is a big win, but as user numbers grow, AWS or Google Cloud bills can explode to $50,000–$100,000 a month, which is up to $1.2 million a year. In some cases, 25–60% of total funding evaporates into infrastructure expenses alone.
The math gets uglier when you factor in exchange rates. Revenue comes in Naira, but bills come in dollars. A startup budgeting ₦30 million a year for cloud might suddenly face ₦45 million in costs after a sharp currency swing. What began as manageable quickly becomes an existential threat.
This “cloud tax” traps founders in a vicious cycle. To secure bigger funding, they need scale. To achieve scale, they need cloud resources. But those same resources eat so deeply into their budget that growth stalls.
The pain is made worse by a shortage of cloud cost-optimization skills. Nigerian developers can build world-class apps, but expertise in reducing cloud bills, like using reserved instances, right-sizing workloads, or multi-cloud strategies, is rare. Many startups only discover they’ve been overpaying by 40–60% after hiring consultants they can barely afford.
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Local cloud providers exist, but reliability issues and limited features make them a risky bet. Startups are stuck between pricey international options and unstable local services, with no clear middle ground.
Government investments in data centers are encouraging, but they won’t solve the immediate crisis. Adeyemi and other experts say what’s needed now are practical fixes: more FinOps experts, tax breaks on cloud spending, favorable forex rates through bank–cloud partnerships, and government-backed cloud credits for early-stage founders.
Nigerian entrepreneurs aren’t asking for handouts, just a fighting chance. Right now, infrastructure costs swallow half their funding before they can even focus on growth. And that doesn’t just limit one company’s future; it slows the progress of the entire ecosystem.
The cruel irony is clear: the cloud was meant to level the playing field. Instead, for too many Nigerian startups, it’s becoming the ceiling that holds them back.
