Africa Technology Regulatory Update: Adoption of the AfCFTA Protocol on Digital Trade
February 28, 2024, Covington Alert
What has happened?
The African Continental Free Trade Area (“AfCFTA”) has emerged as a pivotal opportunity that will set the framework for future trade across Africa. Amid the prospects, one of the challenges has been the fragmented and diverse regulatory environment, coupled with regulators adopting policies that are not conducive for multinationals to make investments and operate efficiently across Africa.
Following protracted negotiations, and industry consultations, the 37th African Union (“AU”) Heads of States Summit held on 17 – 18 February 2024, adopted the much anticipated AfCFTA Protocol on Digital Trade (“AfCFTA Digital Protocol”).
The AfCFTA Digital Protocol establishes an important legal instrument that will, through harmonized rules and common principles and standards, support and enable an acceleration of technology driven innovation and commerce in Africa. It focuses on promoting intra-African digital trade, enhancing cooperation on digital matters among State Parties, and creating a transparent, secure, and trusted digital trade ecosystem.
Why is this development important for technology companies operating in Africa?
The AfCFTA Digital Protocol covers important areas such as data governance, data protection, cross-border data flows, online consumer protection, cybersecurity and emerging technologies (including artificial intelligence). For multinational technology companies, that operate in several jurisdictions across Africa, this is particularly important given the historic and current challenges relating to limited regulatory and commercial inter-operability between jurisdictions, the high cost of compliance and transaction costs, and limited access to regional markets.
How can we help?
It is essential for multinational companies, to continue to engage regulators as the AfCFTA Digital Protocol enters into force. While the framework has been set out, it is expected that several annexures will be developed over the next few years, to give effect to the overall framework.
The Covington team has worked closely with the AfCFTA Secretariat, various African governments and leading multinational and African technology companies, contributing substantively to the development of the AfCFTA Digital Protocol as adopted by the AU Heads of States. Our team remains available to businesses as they navigate the AfCFTA Digital Protocol, particularly as it affects products and services offered at an individual company level.
Our team would be happy to address any questions you may have.
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