Across the world, the obstacles to data privacy have evolved faster than the regulatory and legal structures meant to protect that right. Many businesses in Africa have been victims of data breaches, resulting in significant financial losses and reputational damage. By implementing data protection laws, businesses can take proactive measures to prevent data breaches and ensure they are adequately protected from cyber threats and other data acquisition breaches.
The Data Protection regulation is crucial for business entities as it requires them to assess the impact of personal data processing to promote data transparency and avoid data breaches, leaks and theft of intellectual property. – Jean Eric – Sauzier, Partner, ALN Mauritius
According to the Tony Blair Institute, 33 African countries (60% of the continent), have implemented data protection legislation as of December 2022, up from 20 countries (36% of the region) five years ago. Data protection regulations are critical for growing businesses in Africa because they protect individuals’ personal information and guarantee that business entities act with integrity and accountability. These regulations continue to substantially impact business operations across the continent. Data in the digital age is valuable for businesses and once interpreted, it can harness information which allows them to make crucial decisions.
The growth of data protection and the enactment of regulations are centred on creating a level playing field for businesses and ensuring that personal information is protected. Businesses can compete on an equal footing as these laws continue to provide clear standards and procedures for acquiring, processing and storing personal data. This enables clients and the public to build trust and confidence, which are essential for a business’s long-term success. Some of the other benefits of having clearly outlined data protection laws are as follows:
- Protecting Personal Information
Information is valuable and can be used for the right or wrong intentions when in the wrong hands. Online activities have led to increased data mining and extraction for the wrong purposes, creating a growing risk for both multinational and small-scale organisations. The data collected is often used without the consent of the relevant individual data owner. There have been numerous cases of data breach and the sale of information that have seen businesses gain an unfair advantage over their competition. Many times individuals need to be made aware of how these companies acquire their information because they might not have had prior interaction with their products or services. Data regulation ensures that companies cannot use or sell this information without consent.
Uganda became the 23rd African country and the first East African country to recognise privacy as a fundamental human right. As a leading example, the government and stakeholders should take active measures to ensure that opportunities are taken to implement the law effectively to ensure that there is a national and international responsibility to protect persons, privacy, and data. – Fiona Magona, Partner, ALN Uganda
- Supporting Business Growth
Attracting investments is critical to opening up the business landscape on the continent and promoting economic growth in Africa. Data protection significantly helps to create a more predictable and transparent environment. Businesses setting up their operations and those in existence need to feel that the laws are sufficient to enable them to do business and thrive.On the other hand, governments play a major role in ensuring that regulation is strong enough to create confidence among businesses and between countries. Governments need to ensure that the laws are clear and able to promote investor confidence for local business growth. The challenge lies with governments in various African countries, government agencies and private entities that have been collecting and processing personal data without adequate data protection frameworks amidst fragile oversight mechanisms and inadequate remedies.
- Compliance with International Standards
The development of progressive data protection regulations that adhere to international data protection frameworks is key to facilitating international trade and data transfer. In this case, data transfer for a company in Europe and operating in Africa should be seamless. The European Union’s General Data Protection Regulation (GDPR) is the most robust global privacy and security law. Various countries have built their data protection laws based on the GDPR model, including Mauritius, South Africa, Nigeria and Kenya. The GDPR updated and modernised the principles of the 1995 data protection directive, which was being used initially. The EU then adopted the GDPR in 2016, which was put into effect on 25 May 2018.
Nigeria’s Data Protection Regulations borrow from the principles of adherence to the right to privacy. Several African countries have passed new data privacy laws in the last four years and they are largely influenced by the GDPR. A country may choose to implement a version of the GDPR for extraterritoriality and data export, which are important to maintaining security, integrity and transparency. – Sumbo Akintola, Partner, ALN Nigeria.
- Ensuring there is Fair Competition among Businesses
Fair competition is one of the benefits that having data regulation encourages by breaking the culture of monopolies in business. For many businesses, the value of data is that it enables business leaders to make informed decisions, leading to improved business performance, streamlined operations and stronger relationships. This is an important factor as companies look to make processes efficient while maximising profit. Data protection laws create an environment which encourages fair competition where businesses do not have an unfair advantage due to their unfair access to data.
African countries continue to recognise the importance of data protection and the regulations that come along with it. These regulations align with the global data protection and privacy best practices, enabling uniformity and relatability for businesses seeking investment on the continent. As a result, data protection laws have greatly contributed to the improvement of Africa’s overall business environment by promoting transparency, accountability, and ethical business practices. These laws continue to play a vital role in attracting investment and supporting sustainable economic growth.
Besides these positive factors, data protection has been key in helping to drive innovation for businesses across Africa. This can grow exponentially if businesses can collect and process personal data safely and ethically, leading to the development of new products and services that meet the needs of their clients. This can lead to increased revenue and growth opportunities.