Regulatory Existential Threats to Growth of Tech Startups in Africa

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According to the Access Now Report between 2016 and 2018, there has been a year on year increase in the number of internet shut downs globally. In 2016 there were 75 recorded instances, 108 in 2017 and 188 in 2018.

 An internet shut down can be defined as “An internet shutdown is defined as an intentional disruption of internet or electronic communications rendering them inaccessible or effectively unusable, for a specific population or within a location, often to exert control over the flow of information.”

During the 2016 to 2018 period there were 371 internet shutdowns in 41 countries, primarily driven by shutdowns in Asia with 84%, Africa with 12.2%, Europe with 3% and South America with least shutdowns at 0.8%.

2018 to 2019 will see 56% out of Africa’s 55 countries conducting a presidential election, it’s not at all surprising that this has corresponded with an uptick of internet shut downs across the continent. The economic cost of the shut down and effect on internet business and investor confidence is dire as it seems after the role of the internet and social media in the Arab spring , African government  have begun to see the shut down as a legitimate tool to quell public unrest and advocacy it is uncomfortable  with

Cameroon in Africa logs the highest number of days of shutdown, following protest in the Anglophone areas of Cameroon, the government shutdown the internet in those areas for 93 days starting in January 2017 .The Cameroon government repeated this is October 2017 which ultimately lasted 136 days. The calculated economic cost to the economy was USD 4.5 million.

Other countries like Togo, Zimbabwe, Ethiopia and the Democratic Republic of the Congo have closed off internet access following of anti-government demonstrations or elections

According to the report by CIPESA(The Collaboration on International ICT Policy for East and Southern Africa (CIPESA) promotes inclusive ICT policy in Africa) sub Saharan African has lost close to USD 237 million due to due to governments blocking  access to the internet  since 2015.

Telco’s and ISP’s have to carry out government orders to due to clauses imbibed by the regulators in the countries in which they operate

In some African countries even though there have not been total shutdown , access to social media networks like WhatsApp, Facebook and Twitter  and circumvent these shutdowns populace across these countries have taken to the use of Virtual Private Networks , that enables that obfuscate their location to enable them have access

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Internet Tax regulation

A small number of African countries have turned to laws that penalize the use of the internet especially social media on their countries.

According to the Uganda Communications Commission in 2018 there were 23.6 million mobile subscribers and about 70% use the internet , The countries president who has been in power since 1986 legislated in July 2018 ,   a tat of USD 0.05 per day to access social media ( WhatsApp, Facebook , Twitter, Instagram  etc. . This has been billed to slow down the growth and economic use of the internet across Uganda

A 1% levy on value of mobile money transaction is also billed to disproportionately affect the unbanked who do not necessarily have access to traditional banking

Tanzania has also launche tax on publishing content online, this law require bloggers, vloggers and podcasters to pay a 480 registration fee and  403 annual fee to be allowed to be a publishers , in my interview with bloggers in the country , there are a few that are contemplating shutting down as the law also requires that they keep details of all who publish on their platforms including people who comment . The economic repercussions of these decisions have not yet been computed , but it looks to have long lasting effects on  the economic growth the internet promises .


Direct Effect to the Ecosystem

Tech company inability to connect with and sell in the global market place [sub Saharan African has lost close to USD 237 million due to due to governments blocking access to the internet since 2015.]

Slow down the growth and economic use of the internet in country

Loss of investor confidence in countries with incidents of shutdown or improper taxation

Slowing down the growth of digital entrepreneurship across Africa :as the internet is the bloodline of most of these tech companies , and the difficulty in building and running a tech company will discourage potential entrepreneurs



The Solutions

A coordinate African Digital Single window policy proposed and ratified by the African Union with clear rules for governments on the un acceptability of internet shutdown is important

Advocacy groups like Acess Now , World Wide Web Foundation working with governments and policy leaders to support the “no internet shut down” agenda

Realignment of tax regimes to target social media platforms rather that the populace of countries ( EU regulation in that regard is good example)