AI-enhanced cross-border data flows and economic sovereignty in Kenya and South Africa

An investigation into the opportunities and challenges of European Union-Africa regulatory convergence

Abstract

Artificial intelligence (AI) is radically changing the world. Currently, no industry or area exists that has not been impacted by AI; it is rapidly emerging as a transformative general-purpose technology with implications for global economic development, governance and human rights. Notably, AI technologies rely on large data sets as their ‘raw materials’ for training and prediction, and cross-border data flows are key to these processes. AI-enhanced cross-border digital trade is growing rapidly, connecting regions like the European Union (EU) and Africa in new ways. With regard to AI regulation, the EU’s General Data Protection Regulation (GDPR) and the AI Act (Regulation (EU)2024/1689) have been hailed as landmark global benchmarks for data protection and AI regulation, respectively, as data protection law is the foundational or first line of defence in the regulation of AI. African states seeking to participate in global digital markets face the dual challenge of aligning domestic data protection frameworks with these sources of EU law, while preserving national economic sovereignty and promoting innovation. The extraterritorial reach of EU ‘digital law’, particularly the GDPR, presents both opportunities and challenges for African states engaged in cross-border digital trade with the EU. This alignment between data protection and cross-border data flow regimes in some African states and EU legislation is seen as a positive step, as it is expected to enhance market access and investor confidence. This article investigates the accuracy of this claim and examines Kenya and South Africa in particular. To investigate the implications of both states’ adoption of the EU conditional approach to the regulation of cross-border data flows, this article reviews the legal frameworks in both Kenya and South Africa and compares them with the legal framework in the EU. The article also briefly considers the themes of economic sovereignty, competition and digital trade. The article’s aim is to envision a balanced framework that protects national development goals such as competition, innovation, human rights and economic sovereignty, while still allowing data to move lawfully across borders.