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Data and Markets: Is East Africa ready to join the rest of the world in the fourth industrial revolution?

 

Personal data is increasingly being conceived as a tradeable asset. Such data can encompass location, behavior, retail, health, administrative, and sensor-based industrial data. It is the new oil of the internet and the currency of the digital sphere. It is expected to become the fuel of the global digital economy. It can be used to reduce information asymmetries, improve resource management, and identify causal relationships using artificial intelligence and statistical analyses.

Corporates are already pouncing on this and using personal data collected as strategic capital to improve existing operations or derive superior market intelligence. At the same time, legal obligations over the protection of personal data and individuals’ concerns over its privacy persist. Salient liabilities of holding personal data, privacy regulation, collection and use, and the definition of what exactly personal data is, continue to affect many countries with legal uncertainties surrounding its management. Also, large collections of personal data become targets for cybercrime.

Against the background of the giant market promises as well as economic, social, and political risks posed by digital data, the Centre for Intellectual Property and Information Technology Law (CIPIT) at Strathmore University, the Collaboration on International ICT Policy for East and Southern Africa (CIPESA), and the University of Edinburgh’s Centre of African Studies (CAS) synergistically organised a three-day workshop from 1st September 2020, to dissect pertinent issues on the growth of East Africa’s data economy. Panelists and participants had an opportunity to discuss where these markets stand legally, technically, and ethically, and to highlight the major questions that market players and policymakers will arguably need to face in handling them.

When launching Kenya’s Digital Economy Blueprint at the 2019 Fifth Transform Africa Summit in Kigali, Rwanda, President Uhuru Kenyatta said: “Africa is at a major transformation. Unlike the rest of the world, we have a young, vibrant, innovative population that is breeding immense potential and we are the new frontier for trade and innovation with estimates indicating that by 2023 business opportunities will stand at an average US$ 5.6 trillion”. The blueprint’s pillars of digital government, digital business, infrastructure, innovation-driven entrepreneurship, and digital skills and values are the driving means to the realization of this digital economy.

Symbiotic Telco-Financial Services Ecosystem

True to this vision, East Africa continues to boast of a robust growth in fintech owing to a rapid mobile penetration. fintech is no longer about digitizing existing financial products. It’s about integrating financial services into applications and services you use every day. In East Africa, fintech has carved out its distinct offering to create a full-fledged sector group, complete with its service providers, accelerators, and market. In his simple but witty remarks, Ali Hussein Kassim says “No bank can operate without integrating mobile banking into its services. The bank branch is now a mobile phone, not brick and mortar.” This goes to show just how penetrative and necessarily symbiotic the digital data space has become. Digital data has an unmatched potential of transforming financial services.

With such a powerful surge, questions of; Who controls what data? Who is the regulator? Should consent be obtained before certain data can be used? What data is valuable? Can telco’s monetize their data? What rules apply to what countries? among other concerns, this means that data is disruptive in an extremely powerful way and there ought to be data protection laws firmly in place. Dr. Alex B. Makulilo, Professor of Law and Technology at the Open University of Tanzania, says that there is a need for proper and comprehensive legislation for the use and processing of data, as well as effective implementation of these laws.

Indentured Citizens

Rose Muturi, Assistant Chair of Digital Lenders Association of Kenya, on addressing the inestimable value of data, said that all data is valuable. It all depends on when and how it is being used. The digital economy relies heavily on transparency and trust. People should be educated on the legal implications of terms and conditions whenever data is sourced from them. “This calls for corporations and governments,” says Anja Kovacs, “to desist from the ideology that data is a resource as it abstracts from the real world entanglements of data. We should instead think of the real humans that data represents”. Nanjala Nyabola shared the same sentiments adding that data as a resource creates indentured citizens, viewed as units of production and economic resources.

Digital ID

Only a few African countries have made progress in developing digital ID systems as a unique identifier for their citizens. This hinders the ability to fully exploit the opportunities of the digital economy. The adoption of robust digital ID systems will mitigate the low level of trust between different actors in the digital chain and so promote businesses. Many governments are using IDs to provide social services, but there’s often a lag between their intentions and actions. There is always the need for checks and balances on this, notes Jacqueline Musiitwa, a lawyer expert in African commercial affairs. Meaningful inclusion of its people and economic players, concludes Grace Bomu, is the only solution a government has to ensure the realisation of a successful digital economy powered by a digital ID system.

The engaging and thought-provoking three-day workshop ended with a round-table discussion on the way forward for East Africa. Just how scalable is a data economy? Is it sustainable? How are global economies accommodating this disruption? How can Africa capitalise on its digital data as opposed to exporting it? Is East Africa ready to join the rest of the world in the fourth industrial revolution?

This article was written by Francis Kabutu.

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