US firms have flagged copyright infringement in the digital space among the top barriers to trade and investment in Kenya, highlighting a key loophole that the government needs to plug as the country’s digital acceleration gathers pace.
US Trade Representative Jamieson Greer said US investors want Kenya to join the World Intellectual Property Organisation (WIPO) Internet treaties which deal with copyright and related rights in the digital environment.
“Kenya signed the WIPO Copyright Treaty in 1996 but is yet to ratify it,” the official notes in the report.
While Kenya’s Copyright Act has attempted to incorporate digital works, the country has not made specific regulations especially covering Artificial Intelligence (AI)-generated works.
The report that reviews foreign trade barriers for US firms also notes that Kenya’s mandatory customs recordation system and the Import Permit application requirement, both administered by the Anti-Counterfeit Authority, add extra costs for US businesses dealing in products containing intellectual property into Kenya.
“Widespread availability of counterfeit and pirated goods remains an issue,” the report said.
Other barriers flagged in the report include unclear provisions contained in Kenya’s Data Protection laws about the governance of cross-border data transfer.
The American government says that while the law requires that either data subjects provide consent for transfers outside Kenya or controllers provide proof that personal data will be secure, as a condition for transferring the data outside the country, it does not describe what would constitute acceptable proof.
The US has also sustained pressure on Kenya to rein in on graft and bribery in government procurement processes, noting that authorities in Nairobi have failed to effectively implement the country’s anti-corruption laws.
“US firms continue to report...requests for bribes from multiple levels of the Kenyan Government,” the report says in a trend that threatens to turn potential investors away.
Kenya has struggled to sustainably grow foreign direct investment despite marketing herself as the financial hub of Africa with a modern telecoms and transportation infrastructure.
UN Conference on Trade and Development’s World Investment Report published in June last year estimated that Kenya’s FDI inflows fell $93 million (about Sh12.02 billion) to $1.504 billion (Sh194.4 billion) in 2023 from $1.597 billion (Sh206.3 billion) the year before.
The 5.85 percent dip in foreign investment deals came at a time when investors complained of a multiplicity of licences and permits at the national and county levels amidst overlapping regulations.
