Kenya adopts a data protection law to bolster tech investments

Kenya just took a big step towards its tech development. On November 8th Kenyan president, Uhuru Kenyatta approved a data protection law that complies with European Union legal standards. This will finally allow Kenya to embrace its full potential when it comes to tech innovations and startups and to attract more investments in its information technology center.

This new law will set out guidelines on how personally identifiable data acquired by firms and government entities can be used, stored or shared. As the minister of information, technology, and communication, Joe Mucheru said Kenya has joined the global community in terms of data protection standards by adopting the new regulations.

The EU’s General Data Protection Regulations came into effect in May of last year. Its main purpose is to give control to individuals over their personal data and to simplify the regulatory environment for international business by requesting that they comply with EU guidelines. So any country that wishes to conduct business with European Union should consider that businesses that handle personal data must be built around these guidelines and consider the principle of the EU GDPR, which above all means disclosing any data collection, and the legal basis for it along with its purpose. 

Kenya has been developing at an impressive speed, with Kenyan brokers attracting more attention, while more companies look to invest but this change has already brought some tangible results for the country, with Amazon announcing its plans to set up a part of its cloud infrastructure in Kenya. This could be a fresh start for Kenyan tech communities and an opportunity to enhance the customer experience as well

What will change

The East African Nation has become a hub for technological innovations in the region, with one of the most famous services, Safaricom’s M-Pesa mobile money, which has been around for a while, but since Kenya, didn’t have any regulations on data protection, the investors were discouraged to invest. In the end, the firm didn’t have the chance to reach its full potential. That is until now. Under the new law, the violations of data privacy law will result in a maximum fine of 3 million shillings ($29,283) or two years in jail and will be investigated by an independent office. 

This is a big step towards creating an environment where tech innovations can thrive and develop but as a senior policy manager at the World Wide Web Foundation, Nanjira Sambuli told the media, adopting the law is one thing while actually following through and implementing it is another. The true success of the new law will be determined only after we see how it performs and whether or not it will bring actual changes to the way data protection is regulated in Kenya.

One of the challenges that the lack of safeguards against data collection caused Kenya is that it hasn’t been able to digitize identity records of citizens hence slowing down its provision of services. 

On top of that, the legislation faced some setbacks during this year when it was challenged in court. But despite the push-back, the legislation has now been adopted.

How has Kenya dealt with Data Privacy 

Just last year, Data Privacy watchdog Privacy International published a report saying that Kenyan security agencies would routinely work with mobile service providers to carry out surveillance on users outside the confines of the law. Further continuing to say that Kenya’s spy agency-The National Intelligence Service had direct access to telecommunications networks and could even bypass mobile service providers to access user’s data. In most cases, in the past, the telecommunication operator would end up handing over the information because of the vagueness in the law and telecommunication industry regulations.

But with the new law in place this dynamic could change, bringing companies and citizens more control over their data and ensuring that no rights are being violated and companies don’t abuse their powers.

Kenya as the regions technological hub

Just this August, Kenya was ranked as the second leading innovation hub in sub-Saharan Africa in the Global Innovation Index (GII) 2019 report. Coming second to South Africa, Kenya has a track record of recording high levels of innovation. This is especially impressive when considering the country’s lower-middle-income. The report suggests that a part of why Kenya’s Startups are so successful is that they have easy access to credit and microfinance loans. The country has been outperforming on innovation relative to GDP for nine consecutive years. With the Wired article even referring to Kenya as a new “Silicon Savannah” which is not too far off considering that Kenya has a $1 billion tech scene. Kenya is home to over 200 startups now, with people working just as hard as they do at Silicon Valley to come up with the next best thing.

The major shift came about 10 years ago and its success was possible because of the strong private sector government support and outside investments. Even though now Kenya has multiple innovations to be proud of two of them really set to tone for future development back in the day. The one is M-Pesa which we have already mentioned. M-Pesa is a financing and microfinancing service. It was first launched in 2007 by Vodafone, a multinational telecommunications conglomerate of British origin, for Safaricom and Vodacom, the two largest mobile network operations in Kenya and Tanzania. The service allows its users to deposit money into an account stored on their cell phones, to send balances using PIN-secured texts. They are charged a small fee for those services. The service made it possible for millions of people to access formal financial systems. 

Another innovation that changed Kenya completely was Ushahidi- election Monitoring. It’s a crowd mapping collective that allows observers to report instances of violence easily through mobile phones. It first came about in 2011, during the post-election violence outbreak. The reports were then added to an online map and in the end, it created a very clear picture. Ushahidi started as an ad hoc group of technologists and bloggers hammering out software in a couple of days, trying to figure out a way to gather more and better information about the post-election violence. The group believed that the post-election violence of 2011 was greatly underreported so the group took the power to themselves and launched a platform to form a clearer picture. This was also a way to put faces to those causing the violence, in the end, doing way more than the government ever did to stop the violence.

But now Kenya’s tech scene is much larger and gets more attention from the investors everywhere. The potential is there and with this new law, it’s becoming more and more attainable for Kenya’s startup scene to reach its full potential.

Who’s already looking to invest

Now tech giants like Microsoft and Amazon are waiting for their turn to invest more and even put offices in Kenya. In May of this year, Microsoft announced that it would be investing $100 million to open an Africa Technology Development Center with sites in Kenya as well as Nigeria. Microsoft hired more than 100 local engineers to work in the new facility while also customizing its applications for the African market. At this new facility, the local engineers will work using artificial intelligence, mixed reality, and machine learning. Although it’s important to note that Microsoft first opened an office in Africa almost three decades ago and the venture turned out to be very successful. In the meantime Africa has established itself as an innovator and has strengthened its adoption of technology, improving the way communities bank, farm, and even access healthcare. The Africa Development Centre in Kenya is located in Nairobi. According to Microsoft, this time the investment will be unlike any other existing ones on the continent. Microsoft is already partnering with local universities to create a modern intelligent edge and cloud curriculum that will be unique to Africa. The top graduates from engineering universities will have access to the ADC and a chance to build their careers there. ADC will give Microsoft a chance to engage more and listen to local partners and developers to deliver better results and contribute to Africa to rise in the tech industry.

Another major company looking to invest in Africa is Amazon. Specifically Amazon Web Services. Amazon recently announced that it would be setting up part of its cloud infrastructure in Kenya, adding that they were encouraged by the new law.  The president of Amazon Web Services said the new law paves the way for the company’s investment in Nairobi. Amazon Web Services is the biggest cloud computing platform in the world, with several edge locations around the world. An edge location is a site that caches copies of content so that will be faster delivery to users at the location. The customers can expect up to 50 percent reduction in latency for delivery on their continent. 

Amazon’s presence in Africa has been quite small in the past, largely because of the lack of any laws providing protection for their data. After the new law was adopted the executive met with the Kenyan president to discuss the plans for future collaboration in greater detail. According to Amazon, they will be providing the necessary digital skills training to help create quality jobs for the youth in Kenya. The Edge location is expected to be operational in early 2020.

Can this be a new start for Kenya

The fact that Kenya has managed to secure its place as an innovate despite having the lower-middle-income country says a lot about its potential. This has been proven time and time again that a steady economy is not a guarantee of technological innovation and advances. Kenya proves just that. But since the African nation seems to have what it takes to become the leader in the region, this new law and all the opportunities it brings could potentially elevate Kenya’s status even more. Nairobi has become a heated center of all innovations for the country and the region as a whole. Just like the minister of information, technology, and communication, Joe Mucheru said during the signing ceremony this law makes Kenya a part of a larger community with more opportunities and companies wanting to invest. Even though the bigger companies have already been working with Kenya, it is evident that hesitation was always there.

 Kenya has even been called the “backbone of Africa’s tech ecosystem” with 618 active tech hubs. The growth in tech hubs is also impressive with a 40% leap over the 422 hubs counted last year. These hubs are now also becoming more decentralized. Nairobi has been the heart of Kenya’s tech ecosystem for some time now but because of that, it has become increasingly expensive. Now the new tech hubs wanting to bring more innovation to Kenya are spreading out throughout the country, engaging even more people and raising awareness around tech impact through Kenya. Not to mention that these developments create multiple job opportunities for the youths every day, promoting economic growth and increasing opportunities for innovation.

This new law, if implemented successfully, will transform Kenya’s tech innovation scene, while also providing better, more secure services for the citizens. It will also give the local startups a chance to reach their full potential and to rival companies from the rest of the world. Adoption of the legislation could launch Kenya into being the number one innovator in the region, leaving South Africa and Nigeria behind. Companies like Kenya Airway and tourist hotels will now have to comply when handling personal data from clients, the same goes for phone-based lenders such as Safaricom. This is definitely a fresh start for the country and it will probably take some time for everyone to get onboard. But seeing the unanimous support from the rest of the world and its eagerness to cooperate with Kenya in case the new law is properly adopted, should accelerate the transitional process enough for the East African Nation to see the results and the benefits of the change quickly enough.