Data is the new form of capital for economies in the 21st century. As the world moves towards a digital economy, harmonised data governance frameworks that unlock data's economic and societal benefits are paramount. African nations have made significant strides in data governance, but have experienced uneven results. With data at the heart of the African Continental Free Trade Area agreement, its negotiations phase is the perfect opportunity to leverage the power of using and sharing data, if governments can provide the leadership to achieve it.
Data has become critical in achieving economic growth, increasing competition, and spurring innovation. In a 2019 report, the OECD evaluated several studies that quantified the benefits of using and sharing data at a national or regional level. On average, these studies showed that public and private sector data access and sharing could help generate social and economic benefits worth between 1%-2.5% of GDP.
Other studies have demonstrated how imposing restrictions on data flows negatively impacts a nation’s economy. A 2021 report from the Information Technology & Innovation Foundation (ITIF) found that a one-point increase in a nation’s data restrictiveness could, over a five-year period, cut its gross trade output by 7%, slow economy-wide productivity by 2.9% and increase the prices of goods and services for industries that rely on data for their day-to-day business by 1.5%.
Governments, businesses and individuals need robust data policy frameworks so they can extract the economic benefits of using and sharing data. Such frameworks should feature high data protection standards that guarantee adequate use of personal data, maintain public trust and safeguard privacy, without creating unnecessary data use and sharing barriers.
Uneven Playing Field for Data Governance Frameworks in Africa
In recent years, Africa has made significant strides in adopting data policy frameworks and laws. By December 2022, 33 African countries (60% of the continent), have implemented data protection legislation, up from 20 countries (36% of the region) five years ago.
Despite this progress, data protection laws in Africa have focused on national-level legislation as opposed to regional level, thus resulting in fragmentation rather than reaping the benefits of harmonisation. This fragmentation hinders economic growth and digital development as companies operating across borders face different regulatory environments, adding to legal complexities and costs that discourage market entries and expansions.
The African Union (AU) has attempted to minimise such fragmentation via a common approach to data policy; however, efforts have yet to achieve its potential. The 2014 convention on Cyber Security and Personal Data Protection (Malabo Convention), the first continent-wide initiative to harmonise data protection, has still not met the threshold of acceptance by at least 15 AU member countries, and has not yet entered into force.
In a revived attempt to adopt a common approach to data, on July 2022 the AU published its Data Policy Framework. This framework sets out a shared vision and key recommendations to steer AU’s Member states in creating adequate national and regional data frameworks to realise a common approach towards an integrated African data ecosystem and unlock its power amid a digital economy.
AfCFTA, the Best Opportunity of Transforming Africa into a Data-Driven Economy
The African Continental Free Trade Area (AfCFTA) agreement, forms the world’s largest free-trade area by connecting close to 1.3 billion people, a combined GDP of $3.4 trillion and consumer and business spending valued at $4 trillion. The agreement and its creation of a single digital market presents an opportune moment to reinvigorate regional momentum in leveraging data to achieve economic growth, as well as a unique opportunity to harmonise data frameworks across the continent.
AfCFTA gives prominence to protecting personal data and sees it as critical to doing trade. The agreement emphasises the importance of cross-border data transfers while preserving the ability of a nation to regulate data flows to protect its citizens' privacy and maintain national security in the use and transmission of data.
Several African countries are creating plans to implement the AfCFTA, but most still lack approaches to safe and effective data management and how to allow and incentivise using and sharing of data across borders.
What Should Governments Do to Unlock the Power of Data?
To seize the opportunity presented by AfCFTA, African governments, regional bodies and businesses must come together and implement practical measures - we outline three priority areas here:
Leverage AfCFTA phase III negotiations to harmonise data protection frameworks and agree on the free flow of data across the region. This effort should be based on the recommendations set out in the AU Data Policy Framework, including:developing a cross border data flows mechanism,establishing a common data categorisation and sharing framework, andworking with national data protection authorities to establish a coordination mechanism and body that oversees the transfer of personal data within the continent and ensures compliance.
Develop and implement a data-inclusive AfCFTA implementation plan. Governments should develop a plan for the effective implementation of the AfCFTA, contextualising it to their country’s objectives and execution strategies and ensuring it includes mechanisms for the use and sharing of data across the continent to effectively operationalise the agreement.
Develop national data strategies to turn African countries into modern digital and data-driven economies. To ensure countries can unlock the benefits of data, governments should develop forward-looking national data strategies that provide a holistic blueprint for action. Going one step beyond data protection laws these strategies should encompass physical and technological infrastructure requirements; strengthen institutional frameworks; build measures to develop data and digital skills; and align with strong cybersecurity and resilience frameworks that enable secure data use and sharing.