Cross-border Data Flows in Africa: Policy Considerations for the AfCFTA Digital Trade Protocol

Abstract

The regulation of cross-border data flows has come to the fore fairly recently possibly impacting international trade, economic development and other non-economic issues such as protecting the privacy of the individuals who interact within the digital and data economies. In the African context, negotiations on an African Continental Free Trade Area (AfCFTA) Digital Trade Protocol, i.e., within the AfCFTA framework for establishing a single market on the African continent, are currently underway. Given the fact that cross-border data flows may very well be regulated by this Protocol once concluded, the overarching aim of this report is to contemplate the various issues at stake in this regard and to provide policy recommendations on how to approach the regulation of cross-border data flows at the continental level. We undertake this exercise cognisant of the developments [alluded to above], but from the perspective of African countries and the particular challenges they face, including the creation of a continental digital market among countries that have not yet all fully assimilated to the digital economy in ways which facilitate their economic growth.

We begin by clarifying the terminology used in the report (in section 2) with a view to fostering a shared understanding of the substance of a number of concepts relevant for purposes of a proper discussion of cross-border data flow regulation in an international trade context. We then turn to examine existing approaches towards the regulation of cross-border data flows from the perspective of adopting trade distortive data flow restrictions vis-à-vis allowing its free flow (in section 3). We do so from the vantage point of (i) national / supranational laws and regulations (in section 3.1) and (ii) international / regional laws and regulations (in section 3.2). We do this with the dual aim of (i) documenting the status quo insofar as regulatory approaches to cross border data flows are concerned in some of the more powerful economic jurisdictions in the world, namely the United States (US), European Union (EU) and China, as well as in African countries (with a particular focus, at the national level, on Kenya, Nigeria and South Africa), and (ii) potentially drawing lessons from existing experience for regulating cross-border data flows in the AfCFTA context. To further inform our policy recommendations for AfCFTA State Parties to consider when negotiating potential rules on cross-border data flows, we turn to discuss some of the main regulatory, institutional, and other challenges that arise in relation to regulating cross-border data flows (in section 4). We conclude by providing policy recommendations that may assist African countries with navigating the peculiarities of the continent and that aim to ensure they are able to fully tap the economic potential of increasing cross border data flows (in section 5).

Keywords: AfCFTA, digital trade, Cross-border data flows, digital trade protocol

JEL Classification: K2