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Regulatory Harmonization In Africa: Three Positive Consequences For The Digital Ecosystem

Regulatory Harmonization in Africa: Three Positive Consequences for the Digital Ecosystem

Africa is a continent rich in diversity and contrast. While this may be considered a strength on certain levels, it can also represent a challenge from a regulatory perspective, against the backdrop of the continent’s digital transformation. In February of this year, the Mail & Guardian reported that, over the next five years, 300 million more people would be accessing the Internet in Africa. The article added that the continent’s Internet economy had the potential to grow to 180 billion USD, which represents 5.2% of the GDP, by 2025. However, regulatory harmonization is a must for Africa to reach these new heights.

According to Engineering News, an IDC Market Perspective report pointed out shit from “rigid and overly complex” ICT policies towards more collaborative approaches that attract more players into the market. This is good news and an encouraging step towards regulatory harmonization. Here are three positive consequences of regulatory harmonization on the continent:

Increased security

Security is one of the pillars of trust in the digital ecosystem. However, the Center for Strategic and International Studies(CSIS) is of the opinion that African governments need to step up and reinforce data protection and cybersecurity specifically if they want to foster competitiveness, security, and trade alike within the region. With approximately half of African countries have now implemented relevant legislation in connection with data privacy and/or cybersecurity, the factor contributing to the security gap is rather the heterogeneity of the legislation from one country to the next. Therefore, homogenizing, or harmonizing, the different national security laws would help enhance digital security on the continent, thus ensuring the sustainability of digital growth and trade in Africa.

Greater service affordability

The prices of digital services like the Internet and cross-border payments vary greatly from one African country to another. For example, a worldwide survey carried out by Cable UK in 2020 showed that 1 GB of mobile data ranged from “affordable” (i.e. costing less than 2% of the monthly income) to “not affordable” (i.e. more than 16% of the monthly income) across the continent. More practically, Malawians then paid 87% of gross national income per capita for 1GB of mobile data, while Rwandans only paid 2%. In that respect, regulatory harmonization would help achieve economies of scale, which would subsequently lead to a decrease in prices.

Increased financial and digital inclusion

The high cost of digital services in certain African countries represents a real obstacle to access and usage. So does concern over the security and privacy of one’s data. Therefore, by making digital services more affordable and more secure, as mentioned above, regulatory harmonization enables more people to make use of these services, thus enhancing financial and digital inclusion. According to the UN Capital Development Fund (UNCDF), other factors of inclusion brought about by regulatory harmonization include more reliable and robust infrastructure, which benefits entrepreneurship; clearer standards of practice; increased customer protection, and greater ease of sending and receiving remittances.

The benefits of regulatory harmonization described above are all factors contributing to the creation of a unified digital market in Africa, which is one of the AfCFTA’s key objectives, together with boosting the continent’s trading position in the global market. This highlights the necessity for African governments to cooperate in creating a regional regulatory framework for the digital ecosystem that will bring substantial socioeconomic benefits to the continent and its population.

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