NITDA, Galaxy Backbone move to fix startup failure with local cloud, cost relief

By Juliet Umeh

In a direct response to rising startup failures driven by high infrastructure costs, data insecurity and foreign exchange instability, the National Information Technology Development Agency, NITDA, has partnered with Galaxy Backbone Limited, GBB, to introduce a subsidised sovereign cloud framework for early-stage tech ventures.

The initiative, implemented through the Office for Nigerian Digital Innovation, ONDI, is designed to address structural barriers in Nigeria’s startup ecosystem by providing affordable, secure and locally hosted digital infrastructure for participants in the iHatch programme.

For many startups, reliance on foreign cloud services priced in dollars has remained a major survival challenge, forcing some to scale down operations or shut down entirely. The new intervention seeks to eliminate this burden by hosting services on the Galaxy Cloud Platform, GxCP, with billing conducted in naira to provide cost stability. Director-General of National Information Technology Development Agency, Kashifu Inuwa Abdullahi, said the initiative targets the root causes of startup failure by reducing infrastructure-related pressure on young businesses.

“One of the key problems we identified is that startups spend a significant portion of their limited resources on infrastructure. This affects their ability to innovate and compete. By lowering this cost, we are giving them a fair chance to succeed,” he said.

He added that data sovereignty is another critical issue being addressed, noting that hosting data locally improves security, compliance and user trust. Also speaking, Managing Director of Galaxy Backbone Limited, Ibrahim Adeyanju, said the partnership is bridging a long-standing infrastructure gap that has limited startup scalability.

“Startups often operate with limited capacity, yet they need reliable infrastructure to grow. What we are offering is stability, a platform that allows them to build without worrying about downtime, security breaches, or escalating foreign costs,” he said.

To ensure efficiency and prevent resource wastage, the programme introduces a milestone-based access model, Build, Validate and Scale, where cloud credits are released in phases based on startup growth stages.

According to stakeholders, this structure addresses another key challenge in the ecosystem: poor cloud resource management by early-stage founders.
To support adoption, GBB has deployed a Startup Success Team and automated monitoring tools to guide startups in optimising usage and controlling costs.
General Manager, Strategic Partnerships at GBB, Abdul Malik Suleiman, said the initiative is focused on solving long-standing ecosystem inefficiencies.
“Innovation has always been strong in Nigeria, but infrastructure support has lagged behind. This partnership is about closing that gap and giving startups the foundation they need to grow sustainably,” he said.
Another key challenge being addressed is foreign exchange volatility, which has made long-term budgeting difficult for startups using dollar-denominated services. Under the new model, all post-credit payments will be made in naira, ensuring predictable costs and improved financial planning.
National Coordinator of ONDI, Victoria Fabunmi, said the initiative marks a shift from training-only programmes to full ecosystem support.
“Training alone is not enough. Startups need tools, platforms, and systems to implement what they learn. This initiative ensures they are fully equipped to move from ideas to scalable solutions,” she said.
With over 160 startups already trained across 37 hubs under the iHatch programme, the initiative is evolving into a full-stack support system aimed at removing operational barriers to growth.

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