Tech firms, regulators urged to collaborate as East Africa’s digital economy expands

Business leaders, technology experts and legal practitioners have called for closer collaboration between innovators and regulators as Kenya and the wider East African region expand their digital economies.

The call was made at the inaugural Bowmans X Tech event in Nairobi, where participants examined the legal, regulatory and infrastructure challenges facing businesses seeking to scale technology-driven solutions across African markets.

John Syekei, co-head of Technology at Bowmans in Nairobi, said technology and law were increasingly shaping the region’s business environment, with artificial intelligence (AI), data centres and cloud services becoming essential to enterprises of all sizes.

“The future of business in East Africa is being written at the intersection of technology and the law,” Syekei said.

He noted that technology was no longer the preserve of large corporations, with micro, small and medium enterprises also relying on digital tools to operate, reach customers and compete.

However, the pace of technological change has raised questions about regulation, investment and the responsibilities of businesses operating across multiple jurisdictions.

Syekei said bringing together stakeholders from business, technology, investment and law was necessary to examine regulatory developments affecting the region’s digital economy.

“With this transformation comes important, urgent, sometimes uncomfortable questions,” he said.

Navigating cross-border markets

Robby Coelho, a Bowmans partner based in Cape Town, said businesses seeking to expand across borders needed legal strategies that reflected both the opportunities created by technology and the differences between individual markets.

Although digital platforms can connect businesses and customers across countries, Coelho noted that laws, regulators, institutions and market conditions remain largely local.

Companies therefore need an understanding of individual jurisdictions while drawing on expertise and best practices from across the region.

He added that the legal implications of technology vary across sectors, requiring advice tailored to the specific needs of each business.

“Technology means something different in a bank than it does in a hospital, a mine, a retailer or a telecommunications company. We believe legal advice has to reflect that,” Coelho said.

He outlined Bowmans’ multidisciplinary approach to technology-related work through its Bowmans X Tech initiative, which brings together legal, sector and market expertise to address clients’ needs.

Coelho said technology-driven projects often involve several areas of law simultaneously, making coordination between specialists important throughout the development and implementation process.

The approach is intended to help businesses manage legal and regulatory risks while pursuing opportunities across different sectors and markets.

M-Pesa offers lessons on scaling innovation

Stephen Chege, group chief corporate and external affairs officer at Safaricom, said African businesses needed to think beyond domestic markets when developing solutions with the potential to achieve continental and global reach.

“Scale means taking what we have and going global. It means taking an idea born in East Africa and transforming it into a solution for Africa and potentially for the world,” Chege said.

He argued that the size of a business’s potential market increasingly depends on its ability to solve problems rather than the population of its home country.

“The size of your market is no longer determined by your population. It is determined by your ability to solve problems. Period,” he said.

Chege cited M-Pesa as an example of an innovation that grew from a local need into a widely recognised financial services platform.

According to figures he presented, M-Pesa processed 46 billion transactions in the previous year, serving more than 41 million active customers and facilitating transactions worth over $316 billion, equivalent to approximately KSh42 trillion.

The platform was initially developed to address a practical challenge, making it easier for people to transfer money, but has since become an internationally studied example of financial inclusion.

Chege said African businesses could achieve greater scale by building solutions that connect markets rather than treating each country as a separate opportunity.

“The opportunity is not simply in Kenya or Tanzania or Uganda. It is Kenya connected to Uganda, connected to Tanzania, connected to Rwanda, connected to Ethiopia, and so on,” he said.

On regulation, he called for frameworks that protect consumers and build public trust without stifling innovation.

The objective, he said, should be to establish safeguards that allow technology businesses to develop responsibly and expand into new markets.

Infrastructure remains critical

Safaricom director of regulatory and public policy Fred Waithaka said the digital economy depended on an interconnected ecosystem encompassing technology platforms, telecommunications infrastructure and the people who use digital services.

He described the ecosystem as one that operates across local and international markets, with different components influencing how digital content is created, distributed and moderated.

Connectivity infrastructure, including active and passive network components and bandwidth, is central to the functioning of that system.

His remarks underscored the importance of physical infrastructure in supporting digital expansion, particularly as businesses increase their reliance on online platforms and data-intensive services.

Participants also discussed the need to address infrastructure constraints, including access to land, reliable electricity, water availability, fibre networks and telecommunications towers. These factors can affect the cost and pace of deploying digital services.

Businesses urged to manage risks early

The discussions produced several recommendations for companies seeking to develop and expand technology-based products.

On artificial intelligence, participants emphasised the need for businesses to establish governance frameworks before deploying systems at scale. A risk-based approach should include clear internal policies, disciplined data management, controls on unauthorised AI use and safeguards for confidential information and legally privileged material.

Businesses were also encouraged to incorporate compliance requirements into product design and maintain appropriate human oversight of AI-driven decisions.

Intellectual property protection was another priority. Companies were advised to use confidentiality clauses and non-disclosure agreements, review trade secrets and establish clear ownership of intellectual property to reduce the risk of disputes.

Participants further stressed the importance of putting appropriate tax and transfer-pricing structures in place early, particularly for businesses operating across multiple countries.

Mapping AI and data applications was also identified as an important step in identifying and addressing risks, including potential bias in digital financial services.

The discussions highlighted the challenge of operating across markets with different tax regimes, exchange controls and compliance requirements, which can increase the cost and complexity of regional expansion.

Regulatory certainty key to investment

Heather Irvine, Bowmans’ co-head of Technology in Johannesburg, said regulatory certainty was essential to attracting investment while allowing technology businesses to innovate.

She noted that companies adopting AI, managing complex intellectual property assets and modernising digital finance and payment systems faced challenges that extended beyond technology itself.

“Our primary hurdle isn’t entrepreneurial vision, it’s mitigating the friction of fragmented tax regimes, exchange controls, and misaligned compliance models,” Irvine said.

She added that delivering connectivity and digital services also required businesses to account for practical infrastructure constraints, including shortages of power and water, alongside differing approaches to content moderation.

Irvine said policymakers and legal advisers needed to strike a balance between protecting consumers and creating conditions that encouraged investment.

She questioned whether regulatory frameworks were being designed to address specific risks or whether importing foreign approaches without adapting them to local circumstances could create unnecessary compliance burdens.

“Active collaboration between policymakers and the tech community will be what ensures that regulatory guardrails support, rather than obstruct, a thriving, inclusive digital ecosystem across East Africa,” she said.

The event highlighted the need for governments, regulators, investors and technology companies to work together as digital services expand across the region. Participants said effective cooperation, supported by reliable infrastructure and clear regulatory frameworks, would be important in helping East African innovations compete in larger markets.