Developing digital Africa: The legal implications

Posted on: March 30, 2017 by Remy Fekete

In a recent post, Philippe Duluc and Christian Aghroum discussed the security implications of developing digital trust and building a climate of confidence in Africa. Data is the fuel of the new digital economy, and if we’re to truly develop a new digital-first economy in Africa, we must also consider the legal implications. Here, I look at some of the challenges associated with developing Africa’s digital infrastructure from a legal standpoint, as well as my key recommendations for legal teams to further progress.

Key challenges to address

Unlike other markets where smartphones are in the pockets of more consumers than ever before, less than 1 in 5 people use a smartphone in Africa today. Instead, most of the population are still using standard 2G handsets, because these devices are much more affordable than smartphones. Some states – such as Togo and Benin – have introduced policies to limit taxes on mobile devices to bring the price point down for consumers. In other states, the second-hand market for smartphones is growing rapidly, with many old devices being recycled for use across the African continent. Equipment manufacturers, such as TCT, are looking to capitalize on the low-price market, by introducing more affordable handsets in a bid to increase adoption in Africa.

Current efforts to grow Africa’s digital services are also being hampered by a lack of network infrastructure connecting the continent to international cables, and inadequate levels of interoperability between those systems that do. While the ACE submarine communications cable links the west of Africa to France, simply bringing capacity to the shores isn’t enough. To bring connectivity to people’s homes and businesses, landing stations need to be deployed at various points, at a cost of $30m each. Once this is in place, telecoms operators will have to work together to agree open access principles to distribute this connectivity to homes and businesses at as low a cost as possible.

Basic 2G services have been very successful across the continent, having boosted jobs and economies. In fact, they are widely considered a golden goose by many governments in Africa with most operators being taxed very heavily to boost local economies. As a result, there are serious question marks over the need for and capability of 4G networks to raise as much revenue as 2G networks. This has left many operations in a chicken/egg scenario – without 4G networks in place, there is no mobile content for consumers to demand. But without demand for this content, there is no business case to develop 4G services. However, the digital economy cannot emerge if there is no desire to make the shift from 2G to 4G.

Finally, the lack of trust in mobile payments in Africa is limiting the development of new services.

More than 90% of telecoms activity in Africa is pre-paid, with many consumers not prepared to take the risk, instead loading what they want to spend on to pre-paid cards. The digital economy therefore depends entirely on the development of robust platforms that enable secure online and mobile payments.

Recommendations for legal teams

Technology is evolving more rapidly than the law, which is why many lawyers in Africa have developed a technology neutrality concept, where legislation can be applied more ‘generally’ across new technologies and services. The International Telecom Union (ITU) is promoting this concept to all member countries, which acknowledges the fact that you can’t change the law every time a new technology comes to the fore. Instead, laws must be put in place on a case by case basis. Criminal law also needs updating with cybercrime policies; with specific teams deployed to tackle cybercrime and target criminals (and terrorists) who are using websites and services hosted outside of Africa, such as Facebook and Twitter, to attack.

With a robust legal framework in place, African citizens will have more confidence to use new mobile services; which in turn will enable the digital economy to be further developed across the continent.

This week, Atos will be at the IT Forum in Togo to discuss the challenges of e-government and digital transformation in Togo. Please see here for more information.

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About Remy Fekete
Head of the French Telecommunications Media & Technologies practice at Jones Day
Rémy Fekete has practiced in the TMT sectors for over 20 years, mainly in Africa, the Middle East and Europe. He regularly advises public entities and major telecommunications groups on issues related to broadcasting, distribution, digital and cybersecurity issues, and corporate law. He leads the Jones Day’s French TMT practice. In addition to his numerous missions assisting governments and regulatory authorities, notably in Africa, Rémy intervenes alongside private companies, telecommunications operators, investment funds, and financial institutions on financing, restructuring, and mergers and acquisitions’ operations. He has advised more than 30 governments and regulators in Africa in the granting of licenses, the privatization of operators, the opening up of the market to new players, and the restructuring and reforming of the worldwide legal and regulatory framework applicable to the telecommunications and information technology sector. Rémy has a significant experience in French, English, and Portuguese speaking countries of Africa and the Middle East.