African technology regulations exist but are not backed by penalties, says regulator

Effective laws have been developed to regulate the tech space in Africa, but there is a lack of penalties to enforce compliance, according to a leading technology regulator.

Abossé Akue-Kpakpo, Director of the Digital Economy at the West African Economic and Monetary Union Commission (UEMOA), said African business at GITEX Africa in Marrakech that his organization has introduced several regulations related to the digital economy but lacks the tools to ensure their enforcement.

“It’s very difficult (to enforce rules), but we have certain mechanisms that we try to use,” says Akue-Kpakpo. “For example, every year each country is required to produce a report reviewing and assessing the extent to which it has implemented the Commission’s recommendations. The results are then sent to the highest levels of the country, up to the prime minister or president.”

However, Akue-Kpakpo says that despite having passed on its recommendations, the regulator it heads does not have the power to impose more practical penalties, such as fines, on those who fail to comply with the recommendations.

“We cannot impose financial penalties or sanctions except in specific cases. For example, we can impose penalties if countries do not apply rules to ensure fair competition. But generally speaking, we don’t have that power.”

No enforcement

There is a widespread belief in Africa that a lack of regulation is a major obstacle to the development of next-generation digital industries on the continent, such as fintech and artificial intelligence (AI). For example, mobile money industry leaders recently pointed to inadequate and inconsistent regulations hindering the development of the cross-border payments space in Africa. Global consulting firm McKinsey has similarly argued that the “uncertain regulatory environment” on the continent is partly responsible for stifling innovation.

The argument is that without broad and reasonable regulation, entrepreneurs do not feel safe enough to develop new products and services and bring them to market, while investors do not feel that their capital is sufficiently protected to devote resources to new industries .

However, regulators working in pan-African regulatory organizations believe that they have developed many of the regulations that these industries have been asking for. In their opinion, the real problem is the lack of effective law enforcement mechanisms.

Akue-Kpakpo notes that UEMOA has developed several new initiatives aimed at strengthening regulation in the digital economy in Africa, such as the “Regional Digital Economy Development Programme”, which aims to introduce a more stringent legal framework for strategic industries.