African tech rules exists but are not backed up by penalties, says regulator

Effective regulations to govern Africa’s tech space have been drafted but there is a lack of penalties to force compliance, according to a leading tech regulator.

Abossé Akue-Kpakpo, digital economy director at the West African Economic and Monetary Union (UEMOA) Commission, told African Business at GITEX Africa in Marrakech that his organisation has introduced several pieces of regulation related to the digital economy but says the regulator he leads does not have the authority to impose more practical penalties such as fines on those who do not comply.

“We cannot apply fines or sanctions, apart from in certain cases. We can give penalties if countries do not apply the rules surrounding ensuring fair competition, for example. But on the whole, we do not have these powers.”

Instead, the regulator is dependent on individual members states to impose penalties where they find companies and individuals are not respecting the rules introduced by the Commission.

“It is very difficult [to force the rules to be imposed] but we have some mechanisms that we try to use,” Akue-Kpakpo says. “For example, every year each country is obliged to conduct a report reviewing and assessing the extent to which they have implement the recommendations from the Commission. The results are then sent to the highest levels of the state, right up to the prime minister or president.”

Lack of enforcement

A common narrative in Africa is that a lack of regulation is a major barrier to the growth of the continent’s next-generation digital industries, such as fintech and artificial intelligence (AI). Mobile money leaders, for example, recently cited inadequate and inconsistent regulation as hampering the growth of Africa’s cross-border payment space. The global consultancy firm McKinsey has similarly argued that the continent’s “uncertain regulatory environment” is partly responsible for stifling innovation.

Without broad and sound regulation, the argument goes, entrepreneurs do not feel sufficiently secure in developing new products and services and bringing them to market, while investors do not feel their capital is protected enough to dedicate resources to new industries.

However, regulators working at pan-African regulatory organisations believe they have developed many of the regulations these industries have asked for. The real problem, in their eyes, is the lack of effective enforcement mechanisms.

Akue-Kpakpo notes that the UEMOA has developed several new initiatives designed to strengthen regulation in Africa’s digital economy, such as the “Regional Digital Economy Development Programme” which aims to introduce more rigorous legal frameworks for strategic industries.