Report warns Africa on perils of deals with tech behemoths

Kenya’s decision to pull out of a new free trade pact with China after it decided the deal was too one-sided last week, is illustrative of the problems African nations face in their relations with large technology firms, a new report says.

The UK-based campaign group Global Justice Now is warning of an “e-pocalypse” for African countries because of Western firms’ dominance in selling digital services over local companies in poorer nations.

Mr Nick Dearden, head of Global Justice Now, says it is essential that developing countries retain their citizens’ data within their borders to avoid the core of their economies being directed from abroad. He believes the idea that countries should be passive receivers of Western technology, and borrow heavily on international financial markets to pay for it, means they become prey to the whims of foreign businesses.

The report says that sub-Saharan Africa, in particular, is seen as quite exposed after decades of under-investment that has left many countries with little choice than to accept the terms laid down by tech titans.

“Tech companies like to project a modern, progressive image to the world. But under the surface, companies like Google, Facebook, Amazon and Uber are pursuing an agenda that could hand them dangerous levels of control over our lives and profoundly harm economic development in the global south,” the report says.

Critics, however, say e-commerce liberates small and medium-sized businesses in Africa to export goods they could never previously afford to sell.

The Observer newspaper quotes Ms Susan Aaronson, a digital trade expert at George Washington University, as saying that African countries do have the right to say to tech firms “you need to pay for our data and you need to be transparent about the way you do it.”

They also say that the states’ attempts to keep data in local servers prevents tech firms from benefiting from economies of scale by housing it in vast hubs across the globe.

“Without (keeping data local) it’s so much more difficult for countries to regulate and tax industries, for them to get really any benefits out of investment with no skills, jobs or technology transfer, or to nurture infant industries. It’s the central problem with the way trade deals operate,” said Mr Dearden.

A key problem is that more than 100 countries have no privacy laws at all, according to Unctad.

At a World Trade Organisation’s meeting in Argentina last year, African countries were particularly alarmed at proposals, which in effect, forced them to trade with the tech giants.