Geographies in Depth

What Africa can learn from China about data privacy

An employee uses a money-counting machine as she serves a customer inside a mobile-phone care centre in Nairobi.

An employee uses a money-counting machine as she serves a customer inside a mobile-phone care centre in Nairobi. Image: REUTERS/Thomas Mukoya

Stephany Zoo
Founder, China Africa Tech Initiative
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After taking a group of 15 entrepreneurs from Nigeria, Kenya, South Africa, and other African countries on a learning journey to China’s tech powerhouses, the one thing they were all unequivocally amazed by was the country’s data usage prowess. At Ant Financial, Alibaba’s powerhouse financial subsidiary, they use big data to manage dynamic credit risk and lower loan delinquency rates. At Didi, China’s Uber-killer, they use predictive algorithms to help anticipate traffic jams and reroute drivers to alleviate traffic congestion. Big data is not only incrementally increasing the efficacy of tech companies, but tangibly impacting the lives of users.

Across Africa, where the cost of development is high and efficiency is low to begin with, leveraging the power of big data should be a priority. This knowledge and technology transfer can be immediately implemented between China and more developed African countries, such as Nigeria, Ghana and Kenya. While big data may have high upfront costs, some of which China’s expertise can help lower, its applications have reverberating effects.

In general, there is a dearth of data in Africa, let alone the expertise how to use it. In the beginning of China’s technology boom, the challenge wasn’t around the availability of data, but quite the opposite – China had too much data, and much of it was unreliable. Since then, companies like Alibaba have not only learned how to effectively collect and analyze data, but are actually using big data to detect the very fraud it used to propagate.

“You can't manage what you can't measure” is often attributed to W. Edwards Deming, the statistician and quality-control expert. This has never been more accurate for Africa than now, since efficient allocation of resources will be pivotal for the next stage of Africa’s supercharged growth. First, the African continent needs to build competency regarding data collection, which may come in the form of increased consumer touch points, data interoperability, and more precise infrastructure. Secondly, creating proficiency around the utilization of big data will be an addressable, but formidable challenge.

Given current mobile phone penetration, and the increasing use of smartphones because of Chinese distributors like Tecno, there are more aspects of consumer data that can be collected. This metadata, which already exists in such high quantities, needs to be made available across different telecom providers and third-party technology operators. Geospatial images are another area where the physical infrastructure is growing, but the digital infrastructure to take advantage of increased volumes needs to keep pace.

Image: In On Africa
The African data ecosystem

There is often misalignment or a lag in communication in a number of the most central sectors in Africa, such as agriculture and health, and in supply chains. This can be remedied by data-driven and real-time decision-making powered by big data. China is already leading the way in this area, with county governments like that in Xun utilizing geospatial images to inform farmers when to reap their harvest. In Uganda, such programs are already underway, and they certainly can use China’s expertise to more rapidly prototype their systems.

In China, big data in health not only helps with informed strategic health planning, but also to identify trends and treatment success rates in the general population. In many regions of rural Africa, where there is a scarcity of doctors, predictive analytics created from big data might be able to help with diagnosis.

Resource allocation and management is often an issue in African countries, in everything from farming inputs to drop-shipped packages from Jumia, so real-time decision-making powered by big data can incrementally change these supply chains. With its $1.989 billion e-commerce market, China is already the world leader in big data and logistics, which can be applied to certain challenges such as trucking and inventory in Africa.

The frequent, but inaccurate comparison made between Africa’s population of 1.2 billion and China’s 1.3 billion is mainly a problem because of the composition. Africa’s 54 countries means extensive differences in language, operating systems, financial systems and every other imaginable aspect of life. While there are sometimes some regional collaborations, it’s extremely difficult to scale tech companies across Africa because of this fragmentation. Which why an argument should be made for not just integration, but true interoperability. This allows for two-way flow of data, which can lead to multilateral applications of business and commercial cases. With more seamless data sharing and interoperability, these physical and cultural divides can be more easily bridged.

As the continent advances, the data it generates also rapidly becomes more complex. By being able to more effectively sort and process this data into actionable insights, governments and large-scale organizations increase the human dividend across far-reaching economic areas such as labour productivity and food security. In this way, data can lead to reverberating economic impact and more efficient allocation of resources.

The need for homegrown data privacy laws

Because of existing ties with European investors, customers, partners or suppliers, when General Data Protection Regulation (GDPR) was mandated in 2018, many African companies scrambled to become compliant. Perhaps it is relevant for European customers who have certain needs, standards, and attitudes about their data, but in many other parts of the world, GDPR is viewed as an unnecessarily stringent policy that is both expensive and difficult to abide by.

On the other hand, to start discussing data privacy in China, we have to start with privacy. The Chinese definition and perception of privacy is very different than the rest of the world's. Despite the fact that China is in the early stages of setting up a data protection regulatory system, the reality is that China’s cultural attitudes towards data and privacy norms are strikingly more loose than those in the West.

In the context of Africa’s data privacy, having broader policies that encourage innovation, especially in data-intensive developments like AI, would have an overall greater net benefit than stringent data-privacy laws. Rather than giving individuals agency around their own data, these hyper-stringent data privacy laws actually prevent companies from being able to use the data to innovate. In fact, anecdotally, many data privacy issues in more developed African countries are not technical but behavioral, so this kind of legislation would not necessarily help privacy concerns.

Data privacy laws, like any other technology legislation, should be made incrementally, tested in sandboxes and then rolled out in phases. It’s complex. There must be a dynamic balance among new business models, new accepted digital norms and authentic consumer concerns. However, because of the influence of European legislation in Africa, GDPR has arrived on the continent in a disruptive and in many ways crushing wave of restrictions. In the past year, African countries have scrambled to create data privacy bills of their own, from Kenya’s Data Protection Act of 2018 to Nigeria’s newer 2019 Data Protection Regulation.

The majority of growth companies in countries like Kenya have been unable to take the changes in their stride; to spend the time to truly understand what these policies mean rather than rushing to be compliant. The other issue then is the required governance to enforce these rules and to have the necessary technical expertise to monitor corporate behavior. There is a concern that Africa lacks that expertise, but this will not be a problem if African legislators are creating laws in line with their own countries’ growth.

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It is imperative that, rather than pushing foreign data privacy policies on Africa, governments are able to customize according to a country’s growth stage, enforcement resources and cultural context. The argument for gradual data privacy legislation in Africa is clear: that the costs threaten not only to stifle Africa’s innovation, but unquestioningly adopting another continent’s standards might put it at an even greater disadvantage.

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Geographies in DepthFourth Industrial Revolution
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