[kictanet] ‘Innovation always precedes regulation’ - A tech myth that needs busting

Munyoki Kilyungi bonfacemunyoki at gmail.com
Wed Aug 3 14:03:23 EAT 2022

Nanjira Sambuli via KICTANet

Hi Sambuli!

<kictanet at lists.kictanet.or.ke> aliandika:

> I think this is an important angle to bring to the fintech innovation (vs) regulation discourse. 
> https://businessday.ng/columnist/article/innovation-always-precedes-regulation-a-tech-myth-that-needs-busting/
> ‘Innovation always precedes regulation’ – A tech myth that needs busting
> David HundeyinAug 1, 2022
> Fintech
> One of last week’s biggest stories out of Africa was the Kenyan central bank’s decision to effectively blacklist Flutterwave and Chipper Cash from operating in Kenya. Typically, much of the reaction to the story from Nigeria managed to completely sidestep the material facts of the case and turn it into an African macrocosm of Nigeria’s usual ethno-tribal discourse.

If this is indeed the case, this sucks.

> Flutterwave, according to the narrative, was merely being unfairly targeted because it is a successful Nigerian company operating in Kenya. The “jealous” Kenyan authorities were simply acting as proxies for Flutterwave’s Kenyan competitors who wanted to protect their market share from “de Najeeryans.” When the point was raised that Flutterwave was, in fact, operating illegally in Kenya, in addition to being in clear violation of Anti Money Laundering regulations, the reply that came was, “Obtaining a Kenyan licence is hard. Innovation always precedes regulation.”
> I have written previously about how there exists a dangerous narrative in Nigerian tech – Fintech especially – that rules are secondary considerations that tech is somehow exempt from. Now, it is time to critically analyse this idea so that if it turns out to lack merit, perhaps we can start the process of killing it dead once and for all. Here goes.
> “Tech is special” – says who?

Tech is not special.  People's freedom - to use
Free[As in Free Beer] software [and privacy] *is*.
Regulators and people in the space love to lump
these 2 together.


> First came the women who complained about sexual harassment by unvetted Uber drivers, and then came the more serious stuff. Rapes. Homicides. Deaths from traffic accidents caused by fatigued Uber drivers struggling desperately to maintain their near 5-star ratings so as to keep earning a living, while Uber used loss of ratings as grounds for account removal and potential loss of livelihood. All of these issues were avoidable if Uber had spent a few months working with authorities to ensure full compliance first, but “moving fast and breaking stuff” was more important.
> The story is much the same with Flutterwave, which not only began operating without a licence in Kenya, but then began actively and brazenly facilitating money laundering on its platform in the jurisdiction where it was already operating illegally.
> It is difficult to picture any other commercial space where such behaviour would not have resulted in conferment of societal pariah status. Can you imagine, say, a Nigerian construction company opening up illegally in Kenya and then deliberately using substandard construction materials resulting in Kenyans’ deaths?
> Would Nigerians feel moved to defend such a thing? Why then, do so many Nigerian techies feel obliged to defend Flutterwave and its money laundering activities in a country whose last major terror attack was planned and funded using electronic payment platforms?


> These are the questions that we must ask ourselves as we react to stories like that of Flutterwave. The rules exist for a reason – they are not impediments to the individual egos of people with behavioural disorders who think that they exist as protagonists in a videogame where they can do as they please.

Rules do exist.  But to serve whom?  And for what
purpose were they created?  Sometimes, these rules
you speak so highly of are created by people with
the same behavioural disorders you speak so
strongly against - see Nazi Germany.

I am not an advocate of rule-breaking; nor an
ardent follower of the same.  I lack context in
this whole flutterwave business - something I
reckon that needs context to follow along.  But
these same arguments for rules, that: (a) "tech"
seems to think they are exempt from rules; and (b)
Rules curb bad actors; both have their
merits/de-merits.  Creating rules for a fast
moving industry is hard.  It's even harder when
the people creating the rules are as clueless as
most people are - which is allowed and happens
many times.  For (b), that's very debatable; look
at countries trying to curb E2E encryption with
the guise of curbing social evils, only for
journalists to later discover that the
"rule-upholders" were _the bad actors_.

Finally, curious, what's your definition of
"tech"?  To me, I think you mean any company/corp
that uses the internet chiefly as it's core
revenue is tech right?  [At this point I'm really
nit-picky, sorry] To me then perhaps call this a

Also, how do you regulate something that doesn't
exist (unknown unknowns) or is too niche that it
isn't in the purview of people?  Isn't that what
people mean when they say "Innovation precedes
regulation?"  What I see happening is that: (a)
Regulation around some field exists and (b) some
people in the space feel that the existing
regulations hamper progress.  (b) is important, it
prevents innovation from coming up with
non-ethical things; and should (b) be a pain - see
the ICT bill as an example - people will complain
and in some cases won't fly.  Worth mentioning
that some people influence regulations to create a
monopoly - and that's dangerous.

> Perspective is a healthy thing.

When it serves you?  Here I see a supposedly bad
actor in the finance space that has caused
ripples.  And it seems you have been somehow
involved in this whole saga.  Sorry.  That
m[ay]ust have been difficult.  That said, indeed I
agree that rules have to be followed to protect us
citizens from the whole saga that transpired.  But
again, will those rules - should they be created -
serve to create monopolies, with this saga serving
as a convenient example for their creation?  Just
my 2¢, best spent over a cup of afternoon tea.

(I Search, I Find, I Misplace, I Research)
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