Global Courant 2023-04-12 15:32:59
The African technology ecosystem has grown exponentially and many governments and private organizations have made efforts to support its development. Policy plays a vital role in shaping the ecosystem as it can create an enabling environment for tech entrepreneurs to thrive, attract investment and foster innovation. No wonder several tech-vibrant countries on the continent are embracing national startup acts to support innovation.
In Africa, the subject of policy and technology is a bit technical. More often than not, industry players have argued that innovation precedes policy and regulation on the continent. This means that innovative solutions are emerging on the continent without clear regulatory frameworks or policies.
Clear and predictable regulatory frameworks can provide entrepreneurs with certainty and confidence and also help attract investment and partnerships. For example, in some African countries, policies to promote local content development and technology transfer have helped drive innovation and create new opportunities for entrepreneurs. create uncertainties and risks for both entrepreneurs and users,
In 2020, a technology policy was established in Kenya that aimed to position it for global opportunities and gain global recognition for innovation, efficiency and quality in the delivery of public services. The “National Information, Communication and Technology (ICT) Policy” aims at developing the country’s digital economy and providing universal access to ICT infrastructure and services in the country. The policy states that only companies with at least 30% Kenyan ownership, both corporate and individual, should be licensed to provide ICT services. As an added benefit, the policy would encourage more Kenyans to participate in the country’s ICT sector through equity participation.
Technology companies such as Airtel operating in the country were given three years to comply with local shareholdings and possibly a one-year extension if there are valid reasons for exceeding the stipulated date.
But now this rule has been reversed by President William Ruto at a regional business summit in Nairobi aimed at US investors. Why? The reason for this is not far-fetched. While the policy is beneficial to citizens due to its inclusive nature, it is likely to be a barrier to investors. For many investors, giving up 30% ownership to Kenyan citizens can be a tough deal to make. This poses a downright challenge to the country’s tech ecosystem, as the lion’s share of tech funding on the continent as a whole comes from foreign investors.
The policy reversal would undoubtedly bolster the growth of the country’s tech ecosystem for years to come. Reportedly, e-commerce giant Amazon convinced the Kenyan government to abandon foreign ownership rules so that the tech giant could establish itself in Nairobi.