Unlocking Africa’s digital potential through progressive data policies

With the rise of the digital economy, consumers and businesses are looking for online products, services and experiences that are not limited to their geographic location.

Daily, large amounts of data is generated, transmitted, collected, shared, and stored across borders — as we increasingly live in a hyper-connected world. From GPS navigation, wearable technology, content streaming services, e-commerce, and social media platforms, we rely on these data transfers for various aspects of our lives. 

The ability to transfer, store and process information across borders is estimated to have increased the global GDP by 10.1% over the past decade. With this growth, focus has shifted to concerns on data protection and security. At the same time, there is widespread recognition that the legal and regulatory frameworks for data processing are often opaque and not harmonised across Africa and the globe.

The general lack of trust in the robustness of cloud-based tech security and the slow pace of technology adoption in Africa has resulted in some African states falling behind in developing these regulatory frameworks. 

To build a viable digital economy in Africa, there is an urgent need to adopt a harmonised approach to developing regulatory frameworks that increase the ease of cross-border data transfers in a secure and efficient manner.

Once data is transferred across regions and processed — through the use of big data analytics, machine learning and artificial intelligence (AI) — it can provide broader insights into consumers’ specific needs. This allows for the rollout of better products and services — increasing productivity and demand among businesses, and driving growth in the continent’s digital economy.

In addition, the internet has enabled businesses to create online marketplaces, where consumers around the world can make purchases through real-time transaction-clearing global payment networks. Small and medium-sized enterprises (SMEs) are equally able to expand their reach to this wide customer base.

For Africa’s SMEs — who generate 80% of the continent’s labour force — this presents a great opportunity to participate in global commerce, showcase the continent’s culture and heritage, and continuously drive economic growth.

Cross-border data transfers facilitate these critical online transactions, and therefore, restrictive data processing regimes and unharmonised regulatory frameworks could prevent these opportunities for consumers and SMEs from materialising.

Investment in innovative technologies in Africa, such as cloud computing, the Internet of Things and AI — that support the online marketplace — is further accelerating the need for an enabling regulatory environment for open cross-border data flows.

The announcement by Amazon Web Services to invest R30.4bn in establishing its cloud infrastructure in SA by 2029, highlights the commitment of global tech players to enable digitalisation that delivers world-class technology in Africa.

Regulatory uncertainty and a fragmented approach towards governing cross-border data transfers, place future investments in these emerging technologies in Africa at significant risk — hampering the realisation of digitalisation’s societal and economic benefits. 

A recent policy paper titled Enabling Policy Frameworks for Digital and Data Services for Expanded Economic Growth and Development — A Focus on the Sadc Region, released by Vodacom Group in partnership with the AU Development Agency-New Partnership for Africa's Development, discusses best practice for regulatory frameworks across the world and highlights possible regional recommendations for Africa.

In the findings, data regulations that are purposefully similar in policy to that of other jurisdictions ensure economic and social outcomes for the businesses and individuals of those jurisdictions and allow for more effective regulation by the relevant authorities. This additionally improves trust in cross-border data flows. 

There is much at stake in protecting the data privacy of consumers and businesses while stimulating an inclusive digital economy through accessible cross-border data-driven products and services. As one of the fastest growing regions in the world, but with only new data protection and processing policies, Africa has the opportunity to get this balance right and proactively use cross-border data flows in creating a viable digital future that benefits all. 

Establishing interoperability between digital and data laws and regulations allows for frictionless cross-border services between countries and networks that stimulate market competitiveness, innovation and expansion within the region. Consistency and compatibility in these laws and regulations also provide less opportunity for cybercriminals to find loopholes in data protection enforcement, increasing security for businesses and individuals. 

To facilitate unified, secure cross-border data transfers, there needs to be collaboration between national and international policymakers, regulators industry stakeholders and civil society.

Ongoing engagement and co-ordination between stakeholders will help to ensure that Africa’s regulatory environment maintains consistently high standards of data protection and processing but is also enabling economic and social development.

We believe in Africa’s potential to drive innovation and investment to build a viable digital economy. Creating regulatory frameworks that facilitate secure cross-border data transfers is critical if we are to achieve this possibility for the continent. 

About the author: Mosa Thekiso is executive head of international legal & regulatory at Vodacom Group, with a focus on AI, digital services, and platforms. 

This article was sponsored by Vodacom.