The Protocol on Digital Trade under the African Continental Free Trade Area (AfCFTA) represents a significant opportunity to foster a digitally integrated African continent. However, from the perspective of the Pan African Chamber of Commerce and Industry (PACCI), it is essential to recognise the opportunities and challenges this presents for African countries.
The protocol aims to facilitate cross-border digital transactions, enhance interoperability and build a digital economy across Africa. Nevertheless, unless carefully implemented, there is a risk that it could perpetuate dependency on advanced economies for technology and infrastructure, limiting Africa’s control over its digital future.
The key issue here is Africa’s ability to develop an autonomous digital ecosystem that does not solely rely on external technology providers.
While the protocol sets commendable objectives of creating harmonised rules and promoting digital trade, several shortcomings could hinder Africa’s long-term economic sovereignty and sustainable development.
Key shortcomings
Dependence on external technologies and infrastructure: The protocol encourages the adoption of international standards and technologies but lacks emphasis on promoting indigenous African technologies. Without focused efforts to build local capacity in digital infrastructure, African countries may remain overly dependent on foreign technology providers.
Local innovation and industrialisation: The protocol lacks provisions to foster local innovation and digital industrialisation within Africa.
Inequitable data governance framework: The cross-border data transfer provisions of the protocol favour the free flow of data, but many African countries lack robust data-governance frameworks. This leaves the continent vulnerable to losing control over valuable data to global tech giants, exacerbating economic inequalities. Africa risks becoming a raw-data provider while foreign companies extract economic value.
Vulnerability to cybersecurity threats: Africa’s digital ecosystem remains fragile and the continent is vulnerable to cybersecurity threats. The protocol does not go far enough in building Africa’s capacity to protect its digital infrastructure.
Develop a continental digital-sovereignty strategy: African countries need to prioritise digital sovereignty by creating a strategy that emphasises the development of indigenous technologies, infrastructure and platforms. This strategy should involve significant investment in African digital research and development to ensure that Africa becomes not just a consumer but also a producer of digital technologies.
Promote indigenous digital industrialisation: The AfCFTA should champion policies that encourage digital industrialisation across the continent. By building Africa’s capacity to produce its own digital goods and services, the continent can create sustainable value chains and reduce reliance on imports from developed countries.
Tax incentives, grants and financing options should be made available to startups and SMEs developing digital products, software and e-commerce platforms specifically designed for African markets.
Strengthen data sovereignty and build local data centres: Africa should prioritise data sovereignty by building local and regional data centres to ensure that African data is stored and processed within the continent. The protocol should include provisions requiring foreign companies to store data in Africa and engage in equitable data-sharing practices.
Create an African digital-standards body: The AfCFTA should establish an African digital-standards body to develop and enforce standards specifically tailored to the continent’s needs.
Invest in cybersecurity and skills development: The AfCFTA should mandate the creation of a continental cybersecurity framework with significant investments in building cybersecurity infrastructure and skills.
Ensure equitable access for all African nations: The AfCFTA should facilitate the equitable distribution of digital infrastructure across the continent. A digital infrastructure fund could be established to support less-developed countries in building robust Internet connectivity, cloud storage and digital payment systems.
The Protocol on Digital Trade under the AfCFTA has the potential to transform Africa’s economic landscape by enabling intra-African digital trade and fostering digital inclusion. However, unless the critical shortcomings related to external dependency, lack of local innovation, weak data governance and cybersecurity vulnerabilities are addressed, the protocol risks reinforcing Africa’s position as a consumer, rather than a creator, of digital products and services.
The Pan African Chamber of Commerce and Industry calls for a more radical, Africa-centred approach that emphasises digital sovereignty, local industrialisation, and robust data protection to ensure that Africa fully benefits from the digital economy and emerges as a leader in global digital trade.
