US tech traders face operational and regulatory challenges in Nigeria and Kenya, as longstanding points round corruption, mental property (IP) violations and new digital tax regimes concentrating on overseas corporations frustrate funding efforts, in accordance with the US Commerce Consultant’s International Commerce Boundaries report.
The report faulted the 2 nations—among the many high tech hubs in Africa—over failure to clamp down on corruption and implement IP safety insurance policies regardless of assurances from each governments. Jamieson L. Greer, the USTR, stated counterfeit software program, pirated music and video content material, and widespread on-line copyright infringement are undercutting licensed operators in Nigeria.
“IP enforcement stays insufficient resulting from chronically inadequate sources for enforcement businesses, porous borders, entrenched trafficking programs that make enforcement tough, and corruption,” he stated.
US firms working in Nigeria “expertise difficulties in day-to-day operations because of inappropriate calls for from officers for ‘facilitative’ funds,” the report stated. Political infighting and a scarcity of judicial capability within the nation stays hurdles to anti-corruption reform.
Whereas Kenya has made progress in supporting its startup ecosystem, the USTR identified considerations round bribery and IP safety—significantly within the digital house—persist. Extra troubling for traders is the aggressive drawback confronted by US corporations that abide by stricter authorized and moral requirements. Many reported they routinely lose out to overseas opponents keen to bend the principles or pay bribes to safe contracts
“US corporations proceed to report direct and oblique requests for bribes from a number of ranges of the Kenyan Authorities,” the US Commerce Consultant stated.
Regardless of signing the World Mental Property Group (WIPO) Copyright Treaty practically 30 years in the past, Kenya has but to ratify it, making a regulatory hole that permits widespread copyright infringement with minimal penalties.
Altering tax regimes
The latest adjustments to each nations’ tax regimes are additionally one other supply of concern for US digital service suppliers like Amazon, Google, Meta, and Netflix.
In December 2024, Kenya changed its controversial digital companies tax with a brand new “important financial presence tax”—a 3% levy on gross revenues earned by non-resident firms by way of digital platforms. The legislation applies to overseas firms that don’t preserve a everlasting bodily presence within the nation and earn greater than KES5 million ($38,800) yearly from Kenyan customers.
Platforms like Netflix and Microsoft at the moment are topic to the tax, elevating considerations over rising compliance prices and the danger of regulatory overreach. In Nigeria, the federal government has taken a extra expansive method. Since 2020, non-resident digital firms have been topic to each earnings and VAT taxes on companies supplied to Nigerian clients.
The report comes when President Donald Trump has threatened to upend the worldwide commerce and funding local weather with larger tariffs. Trump has paused the tariffs, giving nations together with Nigeria and Kenya till June to remove boundaries imposed on US items and companies.