Agenda for Intra-African Economic Development: Business-Legal Frameworks, Enablers and Impediments

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Jurisdiction	South Africa
Pages	1-47
Author	Olawale Ajai
Citation	(2016) 3(1) Journal of Comparative Law in Africa 1
Published date	16 August 2019
Date	16 August 2019

AGENDA FOR INTRA-AFRICAN ECONOMIC

DEVELOPMENT: BUSINESS-LEGAL

FRAMEWORKS, ENABLERS AND

IMPEDIMENTS*

OLAWALE AJAI

Professor of Legal, Social and Political Environment of Business, Lagos Business

School, Pan Atlantic University, Lagos, Nigeria

Africa, once described as the ‘Dark Continent’, is now regardedas the next frontier for the

internationalisation of developed and emerging market multinational corporations

(MNCs) and small and medium enterprises (SMEs). Although viewed as a continent

with burnished democracies, there is no doubt that a resurgent Africa, with a combined

middle class of 600 million people and a raft of the fastest growing economies in the world,

presents immense economic opportunities. In recent times therehas been a noticeable trend

in the internationalisation of African f‌irms into Africa. With the repositioningof African

political and economic cooperation, and emphasis on economic cooperation, intra-African-

led economic development seems more plausible. Conversely, there are still xenophobic

tendencies and trade barriers that bedevil intra-African trade and commerce. The

differences in laws, legal culture and other institutional voids, in addition to constrained

political and country business environmental factors, appear to be serious impediments.

This paper undertakes a fairly extensive cross-disciplinary literature review and investi-

gates the scope of the existing legal and business environments for intra-African business,

with a view to identifying the key enabling and constraining factors and institutions. It

highlights key areas and strategies for legal and institutional reforms and for further

business-legal research.

L’Afrique, une fois décrite comme le «continent noir», est maintenant considéré comme la

prochaine frontièrepour l’internationalisation des entreprises multinationales et des PME

des marchés développés et émergents. Considéré comme un continent avec des démocraties

brunies, une classe moyenne combinée de 600 millions de personnes et un multitude des

économies les plus dynamiques dans le monde, il ne fait aucun doute qu’une Afrique

renaissante présente d’immenses possibilités. Ces derniers temps ilyaeuunetendance

perceptible dans l’internationalisation des entreprises africaines dans l’Afrique. Avec le

repositionnement de la coopération politique et économique de l’Afrique et l’accent sur la

coopération économique, le développement économique diringé à l’échelle intra-africain

semble plus plausible. Inversement, il y a encore des tendances xénophobes et les barrières

commerciales qui perturbent le commerce intra-africain. Les différences entre les lois, la

culture juridique et d’autres vides institutionnels, en plus de contraintes des facteurs

locales, politiques et environnementaux semblent être de sérieux obstacles. Ce document

engage une revue de la littératureinterdisciplinaire assez vaste et cherche à dimensionner la

portée de l’environnement juridique et commercial existant pour les les affaires intra-

africaines en vue d’identif‌ier les facteurs favorables et contraignants clés. Il met en évidence

* This work was undertaken while the author was a research fellow from

06 October – 28 November 2014 at the Centre for Comparative Law in Africa

(CCLA) under the Olu Akinkugbe Business Law in Africa Fellowship administered by

the CCLA, Faculty of Law, University of Cape Town. The author gratefully

acknowledges the Olu Akinkugbe Fellowship and the Centre for Comparative Law

in Africa.

(2016) 3(1) Journal of Comparative Law in Africa 1

les domaines et les stratégies clés pour la réforme juridique et institutionnelle et en vue des

recherches commerciales et juridiques plus approfondies.

Keywords: business-legal frameworks, COMESA, ECA, ECCAS, ECOWAS,

economic integration, CISG, harmonisation/unif‌ication of laws,

intra-African trade, investment laws, NEPAD,regionalism, regional

trade agreements, OHADA

Introduction

Africa is a continent of f‌ifty-four countries, each with peculiar business

environments. There are a number of sub-regional economic communities

and free trade areas in the continent: the Common Market for Eastern and

Southern Africa (COMESA), East African Community (EAC), Southern

African Development Community (SADC) and the Economic Community

of West African States (ECOWAS). There is an existing template for

convergence towards economic and political union through the African

Union (AU). Sub-Saharan African economies on average are growing at the

rate of close to f‌ive per cent, faster than many other regions, on a comparative

global basis.

Much of that growth occurs in the informal sector that

constitutes about f‌ifty per cent (50%) of GDP and employs eighty per cent

(80%) of the population. This suggests that increasing the size of the traded

sector and making growth inclusive could unleash tremendous growth in

those economies. That will, however, require institutional reform and

innovation, particularly legal and legislative. Seven of the ten fastest growing

economies are located in Africa,

yet intra-African trade is estimated at only

about f‌ive per cent (5%) of total African global trade by some accounts.

There is a larger volume of informal trade between African countries, paving

the path for a potential trajectory of rising growth of the traded sector in

several benchmark frontier African countries, such as Kenya, Ghana, and

Nigeria.

This paper examines the scope of the existing legal and business environ-

ments for intra-African business, with a view to identifying the key enabling

and constraining factors and institutions. It will lay out an agenda for reform,

harmonisation or codif‌ication of business laws and for intra-African cluster

development, capable of enhancing country and continental ‘Diamond of

National Advantage’.

Additionally, the paper seeks to serve as a guide for

further research on business law in Africa, attuned to the vision of the Olu

Akinkugbe Business Law in Africa Fellowship and to suggest a road map for

Schwab, K (ed) (2013) The Global Competitiveness Report, 2013-2014. Available

from: (accessed on 8 August 2015).

Deloitte & Touche(2012) The Rise and Rise of the African Middle Class. Available

from:

rise_and_rise.pdf> (accessed on 8 August 2015).

KPMG (2012) African Emergence — The Rise of the Phoenix. Available from:

(accessed on 8 August

2015).

Porter, ME (2008) On Competition 182–98.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 20162

building national and continental competitiveness. The aim is to avoid a

sterile, merely technical, disquisition on business laws and to explore a

practical, industry-based view of the interface between business law, business

management, political economy and policy across Africa.

The paper commences with a theoretical and conceptual overview, goes

on to discuss the def‌inition of the term ‘business environment’ and then

presents an outline of the African business legal environments. Next, it

highlights the essential features of the business-legal frameworks in selected

countries. The paper then discusses cross-border trade and regional integra-

tion; harmonisation, unif‌ication of laws and OHADA; and the role of

clusters. Discussions on entrepreneurship development and the African

Enterprise Economy concept, the political economy of intra-African eco-

nomic development and judicial and legal frameworks follow, and f‌inally, a

conclusion is reached.

Theoretical and conceptual backgrounds

Several theories are employed in the paper and will be brief‌ly reviewed.

These include the law and development theory, political economy theory,

theories of regionalism and economic integration and the microeconomics of

development theory.

Law and development theory

Law and development theory is premised on the assumption that legal

engineering can induce social and economic change through legal norms and

the legal frameworks that supposedly cause social interaction and develop-

ment. Initially, the theory supported the framework of state capitalism as a

method of economic growth, hence facilitating the notion of ‘big govern-

ment’ and the ‘command and control’ regulatory model. Over time it has

transmuted through the New Institutional Economics (NIE) and the

governance and rule of law theories to emphasising the role of institutions

and legal reform, such as ‘market-creating’, ‘market-stabilising’ and ‘market-

promoting law’ in promoting development.

The narrative is that good

governance, rule of law and ‘limited government’ provide a conducive

environment, in which the private sector can function optimally as the

primary engine of growth and development. The World Bank’s ‘Doing

Business’ reports, which measure the effectiveness of legal facilitation of an

enabling country business environment for business, epitomise this approach.

Political economy theory

Political economy theory is concerned with the interphase between politics

and economics or the interrelationship and reinforcing inf‌luence between

Rodrik, D, Subramanian, A& Trebbi, F (2004) ‘Institutions Rule: The Primacy

of Institutions over Geography and Integration in Economic Development’ 9(2)

Journal of Economic Growth 131-65; Thomas, C (2011) ‘Law and Neoclassical Eco-

nomic Development in Theory and Practice: Toward an Institutionalist Critique of

Institutionalism’Cornell Law Faculty Publications Paper 608.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 3

economics and policies or politics. It is about how politics provides a context

for economics and the power dynamics, production and resource-allocation

patterns resulting therefrom, def‌ining institutions in various socio-economic

systems

or how political, legal, social and cultural institutions govern

economic life

and often highlights the need for social responsibility of

capitalism and political behavior.

Political economy discourse is germane

and relevant, as this paper critically examines the interface and interplay

between law and economics as either a veritable driver or a clog to

sustainable development. Law is often the end or manifestation of policy and

politics. Therefore, a merely technical discussion of business laws and a

formalistic listing and interpretation of appurtenant rules, divorced from the

institutional and normative context of politics and economics, will be

unhelpful in identifying fundamental positive and negative causal inf‌luences

or effectual moral and policy directions.

Regionalism versus economic integration

The concept of regionalism embraces political, economic, social, cultural and

geographical dimensions of integration between groups of states (usually

geographic) and among citizens and economic actors within such groups of

states.

It ranges from regionalisation attempts by the private sector in

different countries to form economic clusters,

to various degrees of

integration promoted by states among groups of countries.

‘Economic

integration’, in contrast, is restricted to the economic aspects of integration.

The neorealist theory of regionalism positions states as the prime actors and

promoters of regionalism who are primarily motivated to promote the least

Weingast, BR & Wittman, D (2008) (eds) The Oxford Handbook of Political

Economy. Also see Rynn,J (2014) ‘A Theory of Systems of Political Economy, Part 1:

Def‌ining Systems and Capabilities’. Available from: .com/

sites/economicreconstruction.com/static/JonRynn/

Chapter9PoliticalEconomicSystemsPart1.pdf> (accessed on 22 November 2015).

Boettke et al (2005) ‘The New Comparative Political Economy’ 18 The Review

of Austrian Economics 281–304.

Salavrakos, ID (2012) ‘Political Economy, Theories of the State and Economic

Crisis’ 3(20) International Journal of Business and Social Science 79–98. See also Van der

Pijl, K (2009) A Survey of Global Political Economy, Ch 1. Available from:

www.sussex.ac.uk/ir/research/gpe/gpesurvey/> (accessed on 22 November 2015).

Sakyi, D & Opoku, EEO (2014) ‘Regionalism and Economic Integration in

Africa: A Conceptual and Theoretical Perspective’ Occasional Paper No. 22 1–37; Lee,

M (2002) ‘Regionalism in Africa: A Part of Problem or a Part of Solution’ 9 Polis:

revue camerounaisede science politique.

Wyatt-Walter, A (1995) ‘Regionalism, Globalization and World Economic

Order’ in Fawcett, L& Hurrell, A (eds) Regionalism in WorldPolitics Regional Organiza-

tion and International Order 74–121.

Hurrell, A (1995) ‘Regionalism in Theoretical Perspective’ in Fawcett, L &

Hurrell, A (eds) Regionalism in World Politics: Regional Organization and International

Order 37–73.

Balassa, B (1987) ‘Economic Integration’, entry in The New Palgrave: A Dictio-

nary of Economics 43–7.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 20164

intrusive regime of international collaborative relations that could challenge

their dominance and power.

This reasoning largely explains the diff‌iculty in

eking out effective integration by and through the many regional trade

agreements (RTAs) on which Africa’s regional economic framework stands.

The neoliberal school essentially advocates a neoliberal economic

approach in which markets, the private sector, inter-regional trade, foreign

direct investment; intra and interstate economic clusters, limited government

and interstate institutions spur economic activity, growth and economic

integration.

Most African countries have adopted neoliberal economic

policies and regional groups appear to be premised on the logic of driving up

trade and markets across interstate divides.

Social constructivism theory elucidates the motivation for collaboration to

feelings of common identity or solidarity borne out of historical common

origins and aff‌iliations or shared culture or values, such as religion.

This

seems to be an apologetic for the use of ideology, propaganda or communica-

tion in building a common vision of an African Common Market and a

regional sense of identity.

‘Microeconomics of development’

The ‘microeconomics of development’ is a concept popularised by Professor

Michael Porter. The essential theoretical assumption is that in light of the

ready accessibility of factor inputs as a result of globalisation, the productivity

and prosperity of f‌irms in particular locations, rather than the resource

endowments of countries, is the true basis of competitiveness.

However,

the sophistication with which f‌irms compete depends on the quality of their

business environment. Therefore, development is facilitated by the quality of

national business environments, f‌irm productivity and innovation. Global

markets are comprised of competing clusters of f‌irms and business environ-

ments, not merely independent brands. Firms, not governments, create

competitiveness of nations.

Porter

proffers therefore, that: ‘Government’s

Sakyi & Opoku.

Fjader, C (2012) ‘Regionalism in Asia and Europe in aTheoretical Perspective:

Rationalist and Ideational Approaches’ 10 Asia-Pacif‌ic Journal of EU Studies 73–101;

Lee, M (2002) ‘Regionalism in Africa:A Part of Problem or a Part of Solution’ 9 Polis:

revue camerounaisede science politique.

Vayrynen, R (2003) ‘Regionalism: Old and New’5 International Studies Review

25–52; Fjader, C (2012) ‘Regionalism in Asia and Europe in a Theoretical Perspec-

tive: Rationalist and Ideational Approaches’ 10 Asia-Pacif‌ic Journal of EU Studies

73–101;Lee, M (2002) ‘Regionalism in Africa: A Part of Problem or a Part of

Solution’9 Polis: revue camerounaise de science politique 5.

Porter, ME (1998) ‘The Adam Smith Address: Location, Clusters, and the

‘‘New’’ Microeconomics of Competition’33(1) Business Economics.

Fairbanks, M & Lindsay, S (1997) Plowing the Sea: Nurturing the Hidden Sources of

Growth in the Developing World.

Porter, ME (2000) ‘Location, Competition and Economic Development: Local

Clusters in a Global Economy’14(1) Economic Development Quarterly 15, 20.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 5

more decisive and inevitable inf‌luences are at the microeconomic level’, that

is, in promoting innovation and productivity at the level of the f‌irm.

Business environment

The business environment can be described as the political, economic, social

and technological forces that promote and nurture or constrain and kill

businesses in a given territory and market.

It is the ‘nexus of policies,

institutions, physical infrastructure, human resources and geographic features

that inf‌luence the eff‌iciency with which different f‌irms and industries

operate’.

There is an emphasis on micro-economics rather than on

macro-economics, a point with which we shall re-engage later on. The

‘business environment’ could refer to a narrower ‘regulatory business

environment’ where regulatory initiatives produce transaction costs’burden

of compliance or a broader ‘investment climate’ conception, which refers to

business-enabling factors that encourage investment and productivity

growth, such as infrastructure, health and education.

We use the term

‘business environment’ to encompass the two conceptions.

The ‘African’ business environment

Comparatively, the quality of policies, institutions, infrastructure and human

resources in Africa is generally regarded as constraining micro-economic

eff‌iciency, growth of f‌irms, economic growth and human development.

Africa’s private sector comprises mainly small, medium and micro enterprises

(SMMEs) with comparatively poor productivity and stunted, even arrested,

growth potential.

These enterprises bear the brunt of business environmen-

tal constraints in the form of poor infrastructure, corruption, inadequate

access to capital, weak market linkages, poor quality of human capital, legal

impediments and predatory regulatory challenges, which are devastating

with regard to eff‌iciency and productivity.

Bah and Fang

have estimated

that f‌irms in Africa lose a f‌ifth of their sales and up to forty-four per cent of

total factor productivity to these ineff‌iciencies. Growth of the African private

sector, including by investment, depends on good policies, sound infrastruc-

ture, open competition, eff‌icient markets, growth of competitive clusters and

good governance; in essence, improvements in the business environment

Cf Saleem, S (2010) Business Environment 2.

Eifert, B, Gelb, A & Ramachandran, V (2005) ‘Business Environment and

Comparative Advantage inAfrica: Evidence from the Investment Climate Data’ ICA

WorkingPaper No. 56.

UNIDO & GTZ (2008) Creating an Enabling Environment for Private Sector

Development in sub-Saharan Africa.

Cf Iacovone, L, Ramachandran, V & Schmidt, M (2014) ‘Stunted Growth:

Why Don’t African Firms Create More Jobs?’Center for Global Development Working

Paper 353.

Eifert, Gelb & Ramachandran.

Bah, EM & Fang, L (2011) Impact of the Business Environment on Output and

Productivity in Africa.Available from:

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 20166

and political governance.

North, Acemoglu et al and La Porta et al

suggest that the reason for differential economic development among the

nations of the world is the quality of legal institutions (def‌iciencies in judicial

systems, rule of laws and contract enforcement, ambiguity over property

rights, regulatory red tape and predatory practices). The African Develop-

ment Bank appositely says that: ‘Outdated, unnecessary or inadequate

legislation and government regulations have been identif‌ied as some of the

most important growth constraints in many African countries.’This suggests

that reform programmes that ‘improve both the legal and regulatory

frameworks [could] encourage private investment, accelerate business devel-

opment and increase economic growth’.

In a study aimed at identifying directions for improving governance and

the business environment across Africa from the lens of South African f‌irms

doing business across Africa, ‘the rule of law, which includes a strong and

impartial judicial system capable of enforcing contracts and agreements’,

emerged as the second most listed potential solution.

Emergence of

empowered private sectors by means of better macro-economic manage-

ment, an increase in competitiveness, diversif‌ication and exports, as well as

strengthened regionalism to expand markets and lower costs were other key

solutions identif‌ied.

UNIDO and GTZ

argued that one of the key

impediments to the African business environment is ‘high and rising

informality’, and a preponderance of informal f‌irms and activities. They

presented two options, one of which imperatively requires reforms in

property rights and ‘legalisation’ and the other which emphasises capacity

development in which legalisation may be helpful, but not decisive.

Therefore, the continued importance of law on African development is

underscored by these studies and presents opportunities for research by legal

scholars into how to improve legal and regulatory frameworks in order to

improve the business environment.

Collier, P (2000) ‘Africa’s ComparativeAdvantage’ in Jalilian, H, Tribe, M &

Weiss, J (eds) Industrial Development and Policy in Africa. See also Olof‌in, S (2002)

‘Trade and Competitiveness of African Economies in the 21st Century’14(2) African

Development Review 298–321.

North, DC (1990) Institutions, Iinstitutional Change and Economic Performance;

Acemoglu, D, Johnson, S & Robinson, JA (2004) ‘Institutions as the Fundamental

Cause of Long-Run Growth’ inAghion, P & Durlauf, SN (eds) Handbook of Economic

Growth 380–464; La Porta, R et al (1998) ‘Agency Problems and Dividend Policies

around the World’ NBER Working Paper No. w6594; La Porta, R et al (1999)

‘Investor Protection and Corporate Valuation’NBER Working Paper No. w7403 and

La Porta, R, Lopez-de-Silanes, F & Schleifer, A (2007) ‘The Economic Conse-

quences of Legal Origins’NBER Working Paper No. w13608.

African Development Bank (2015) Macroeconomic Management.

Games, D (2004) The Experience of South African Firms doing Business in Africa:

A Preliminary Survey and Analysis.

Games 5.

UNIDO & GTZ (2008) Creating an Enabling Environment for Private Sector

Development in sub-Saharan Africa.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 7

The legal environment of business in Africa

African countries largely belong to common-law or civil-law traditions or a

mixed tradition, such as in South Africa where the system comprises a mix of

Roman and Dutch law and common law. In most sub-Saharan African

countries the mix includes customary and Islamic law. For NorthAfrica (and

Sudan and Somaliland), Islamic law or a mix of Islamic and civil law or

common law is predominant. Common-law countries generally comprise

former colonies of Britain. Common law is based on judicial precedent,

whilst civil law is based on codes and gives primacy to the opinions of legal

scholars generally.

Civil-law countries have taken the lead in the effort to procure business-

enabling legal institutions meant to promote legal certainty and a central

dispute resolution framework. Francophone countries established by treaty

the Organization for the Harmonization of Business Law in Africa

(OHADA). OHADA unif‌ies the laws in the following areas inter alia,

contract law, commercial law, commercial companies and economic interest

groupings, securities, and insolvency by means of nine Uniform Acts. The

Uniform Acts apply directly in each country, overriding local laws and

providing fairly harmonised practices generally throughout the OHADA

region, in spite of a tendency of national courts sometimes to break ranks and

apply national laws or interpretations. African countries are invited to adopt

the OHADA treaty on the premise that this should harmonise common

practices/legal frameworks and promote common decisions, thereby provid-

ing an incentive for enhanced and eff‌icient cross-border trade and invest-

ment in Africa. GDP growth estimated at 3.4% over a ten-year period in the

francophone countries appears to be lagging behind those of the common-

law countries.

Mataen

suggests that it is not the lack of the right laws and protocols that

hinders intra-African trade, but a lack of uniformity in their interpretation,

such as varying interpretation of rules of origin and valuation by customs

off‌icials in different countries. Richards and Nwankwo

support this

reasoning without referring to OHADA laws. However, they argue that the

quality of enforcement is more important than the content of laws.

La Porta, R et al (1998) ‘Agency Problems and Dividend Policies around the

World’NBER Working Paper No. w6594 at 1118.

Chambord, O (2014) Francophone Africa: The Business Landscape.

Mataen, D (2012) Africa — The Ultimate Frontier Market: A Guide to the Business

and Investment Opportunities in Emerging Africa Chapter 12.

(2005) ‘Reforming the Legal Environment of Business in Sub-Saharan Africa:

Moderating Effects on Foreign Direct Investment’47 Managerial Law 154–63 at 157.

North; Williamson, OE (1994) The Institutions and Governance of Economic

Development and Reform. Proceedings of the World BankAnnual Conference on

Development Economics.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 20168

indicated earlier, the credibility and reliability of judicial adjudication and

enforcement of contracts is perceived to be weak.

Selected country legal frameworks

We shall in this part review only the most essential aspects of the legal

framework for doing business in Egypt, Kenya, Nigeria, South Africa and

Ivory Coast as representative samples of African countries.

Legal systems

Egypt runs a civil-law system, initially derived from France, but largely now

systemised by home-grown principles and jurisprudence. Ivory Coast runs

the civil-law system, largely modeled on French law and OHADA business

laws. Kenya and Nigeria are common-law systems. South Africa runs a

Roman-Dutch law system; the common law is especially persuasive in

companies and business laws, which have largely been adopted from English

law. Islamic law and/or customary laws also apply in various ways in each

country. From a strategy perspective this presents only a level 1 or 2

uncertainty, to use the typology of Courtney et al.

Level 1 uncertainty is

termed a ‘Clear Enough Future’, because the factors shaping the direction of

future events and options for action are unipolar and clear. Residual

uncertainty is irrelevant to making strategic decisions. Level 2 uncertainty is

termed ‘Alternate Futures’ and yields only a few discrete alternatives of future

events to allow a good determination of probabilities. The diversity of legal

systems and laws in Africa, therefore, do not present a Level 4 uncertainty of

‘True Ambiguity’. The nature and direction of legal systems and laws is

known and quite predictable in spite of the fact that there are 53 countries

with their unique institutions and structures.

North, La Porta et al

and others seem to suggest that legal institutions in

common-law countries ensure more favourable business environments for

investment and better economic development than those in civil-law

systems, a theory supported by the Word Bank.

However, Milhaupt and

World Bank (2003) Legal and Judicial Reform: Strategic Directions.Also see Rich-

ards, CD & Nwankwo, S (2005) ‘Reforming the Legal Environment of Business in

Sub-Saharan Africa: Moderating Effects on Foreign Direct Investment’47 Managerial

Law 154–63; Nkurunziza, JD (2005) ‘Reputation and Credit without Collateral in

Africa’s Formal Banking’CSAE Working Paper Series.

Courtney, H, Kirkland, J & Viguerie, P (1997) ‘Strategy under Uncertainty’

75(6) Harvard Business Review 67–79.

North, DC (1990) Institutions, Institutional Change and Economic Performance;

Acemoglu, D, Johnson, S & Robinson, JA (2004) ‘Institutions as the Fundamental

Cause of Long-Run Growth’ inAghion, P & Durlauf, SN (eds) Handbook of Economic

Growth 380–464; La Porta, R et al (1998) ‘Agency Problems and Dividend Policies

around the World’NBER Working Paper No. w6594.

World Bank Group (2004) Doing Business 2004: Understanding Regulations;

Campbell, D & Campbell, C (eds) (2014) Legal Aspects of Doing Business in Africa 84-6.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 9

Pistor

doubted the predictive validity of that theory, arguing that what

mattered was the adaptability of legal systems, rather than their innate

characteristics. Several studies have established that complex regulations, an

absence of the rule of law and poor governance practices tend to increase

transaction costs and promote corruption; stif‌ling business growth and job

creation. These studies indicate that reform in legal and regulatory frame-

works tends to promote a better business environment and economic

effects.

Kaniki

reiterates the same point and opines that civil-law systems

fare poorly compared to common-law systems in the area of quality of

enforcement.

Therefore, an empirical study of OHADA and common-law

African countries on this subject is desirable and an area for future study.

Company law

There are two types of companies in Egyptian law.

The f‌irst, the limited

liability company, is a cross between a limited partnership and a common-law

joint stock company. Management inheres, not in a board of directors but in

one of the managers, who may be subject to a shareholders’ managerial

committee. Rights of pre-emption in existing shareholders apply to share

transfers. Shareholders may not be less than two or more than f‌ifty. Limited

liability companies are precluded from banking, insurance and investment

management business. The second type of company, namely joint stock

companies, may be private or public limited companies, comprising of at

least three shareholders and managed by a board of directors, the majority of

whom must be Egyptian.

Milhaupt, CJ & Pistor, K (2008) Law and Capitalism: What Corporate Crises

Reveal about Legal Systems and Economic Development around the World.

Djankov, S et al (2002) ‘The Regulation of Entry’ 117 Quarterly Journal of

Economics 1–37; Djankov, S, McLiesh, C & Ramalho, RM (2006) ‘Regulation and

Growth’ 92(3) Economics Letters 395–401; NEPAD/OCED (2005) Mobilizing Invest-

ment for Development — ODA and Investment Synergies in Africa. Also see Eifert, B

(2009) ‘Do Regulatory Reforms Stimulate Investment and Growth? Evidence from

the Doing Business Data, 2003-07’ Center for Global Development Working Paper No.

159; Kappler, L & Love, I (2011) The Impact of Business Environment Reforms on New

Firm Registrations.

Kaniki, S (2007) ‘The Legal Environment and Finance: Evidence from East

Africa’ (dissertation submitted for the degree of Doctor of Philosophy, School of

Economic and Business Sciences,University of the Witwatersrand).

Also see Beck, T, Demirguc-Kunt, A & Levine, R (2002) ‘Law and Finance:

Why does Legal Origin Matter?’ World Bank Policy Research Working Paper Series; La

Porta, R et al (1998) ‘Agency Problems and Dividend Policies around the World’

NBER Working Paper No. w6594; Beck, T, Demirgüç-Kunt, A & Levine, R (2003)

‘Law,Endowments, and Finance’ 70(2) Journal of Financial Economics 137–81; Beck, T,

Demirguc-Kunt, A & Levine, R (2004) ‘Law and Firms’Access to Finance’ World

Bank Policy Research Working Paper Series; Smith, DG & Ueda, M (2006) ‘Law and

Entrepreneurship: Do Courts Matter?’2(1) Entrepreneurial Business Law Journal 353.

Shalakany, EK (2014) ‘Legal Aspects of Doing Business in Egypt’in Campbell,

D & Campbell, C (eds) Legal Aspects of Doing Business in Africa. Available from:

(accessed on 8August 2015).

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201610

In Ivory Coast there are two types of companies.

The societe anonyme

(SA), the joint stock company, is most suitable for large investments, must

have a minimum capital amount of CFA F 10 million (roughly $20,000), is

administered by a managing director if the company has three shareholders,

and if more than three, by a general manager reporting to up to twelve

directors. A societe a responsabilite limitee (SARL), a private limited company,

requires minimum capital of CFA F 1 million (roughly $2,000), is managed

by one or two managers and does not need to have a board of directors. A

company can be wholly foreign owned.

In Kenya,

Nigeria

and South Africa,

the limited company can be

incorporated either as a private limited or public limited company by

registration. Shareholders may elect directors and companies can be wholly

foreign owned. Non-Kenyan companies may establish branches in the

country, albeit at a slightly higher tax rate than locally incorporated entities.

Similarly, foreign companies can establish branches without incorporation in

Egypt, but initial capital investment must be in a foreign currency and in

South Africa must be registered as an ‘external company’. After two years,

branch off‌ices must be incorporated in Ivory Coast. South African law allows

small businessmen to register ‘close companies’ which have the benef‌it of

limited liability, but dispense with the formalities of the joint stock company.

Exemption from local incorporation is possible in certain cases in Nigeria.

In all these countries investors may, on requisite registration, establish

partnerships, cooperatives, or representative off‌ices on generally similar

principles (in Egypt and Nigeria they must serve as promotional points only),

and with minimum or no restrictions or disabilities for foreign nationals or

entities (Egypt tends to require a majority stake for nationals in partnerships).

In terms of basics, there is a large degree of similarity in the legal vehicles

for transacting business in Africa, which, therefore, does not hold unwel-

come surprises for investors.

Investment guarantees and incentives

The Investment Incentives Law of Egypt entitles entities to benef‌its, such as

immunity from nationalisation or expropriation, the right to own land, to

import plant and machinery, export directly and includes certain exemptions,

Silue, SD (2014) ‘Legal Aspects of Doing Business in Ivory Coast’in Campbell,

D & Campbell, C (eds) Legal Aspects of Doing Business in Africa. Available from: <

www.jurispub.com>

Musau, MB (2014) ‘Legal Aspects of Doing Business in Kenya’in Campbell, D

& Campbell, C (eds) Legal Aspects of Doing Business in Africa. Available from:

jurispub.com>

Taiwo, L, Osinbajo, A& Dada, O (2014) ‘Legal Aspects of Doing Business in

Nigeria’ in Campbell, D & Campbell, C (eds) Legal Aspects of Doing Business inAfrica.

Availablefrom:

Simon, J (2014) ‘Legal Aspects of Doing Business in South Africa’ in Camp-

bell, D & Campbell, C (eds) Legal Aspects of Doing Business in Africa. Available from:

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 11

such as from company law and stamp duties. The Kenyan and Nigerian

Constitutions and investment laws forbid expropriation of property without

due process, other than for national interest and without fair and adequate

compensation; this is the case generally across the continent. In general,

foreigners and nationals are treated equally.

Kenya, Nigeria and South Africa have one-stop shop investment promo-

tion centres to facilitate obtaining of approvals and licenses. Usually, there is a

free transferability of funds regime for investors in these countries. Local

content is encouraged in most countries and is required by law in the

Nigerian oil and gas sector. Most African countries, including those in this

study, have executed bilateral investment treaties (BITs) with developed and

African countries. OHADA and the EU-ACP Economic PartnershipAgree-

ments (EPAs) are multi-lateral investment treaties (WTO agreements are in

this direction).

There is scepticism about the role of foreign direct investment (FDI) in

fostering development,

particularly because of the greater need for good

governance institutions,

development strategies and the negative effects of

skewed preferential incentives, and restrictive and rent-seeking practices that

subvert domestic production and sustainable development in host coun-

tries.

Tax holidays are apparently particularly negatively correlated to rising

FDI inf‌lows and development.

There is noticeable concern that investment treaties and free trade

agreements with developed countries negatively constrain the policy space,

impoverish host countries and exacerbate the dominance of foreign compa-

nies over developing (especially African) countries.

Ajala

highlights the

negative relationship between FDI, TRIMS and sustainable development

Valderrama, IM (2011) Regulatory Framework for Land Acquisition in Sub-Saharan

Africa: A Comparative Study. Available from: http://erd-report.com/erd/report_

2011/documents/dev-11-001-11researchpapers_mosquera.pdf(accessed on 8 August

2015).

Yelpaala, K (2010) ‘Rethinking the Foreign Direct Investment Process and

Incentives in Post-conf‌lict Transition Countries 30(1) Nw.J. Int’l L. & Bus.

Ouedraogo, IM & Kouaman, PT (2014) ‘Governance and Private Investment

in Sub-Saharan Africa’ 2(1) International Journal of African Development.

Acemoglu, D, Johnson, S & Robinson, J (2001) ‘The Colonial Origins of

Comparative Development: An Empirical Investigation’ 91(5) American Economic

Review 1369–401; Scott, RW (2013) Institutions and Organizations: Ideas, Interest and

Identities (4 ed); Ajala, BO (2010) ‘Gearing FDITowards Sustainable Development in

Nigeria: The Role of the WTO TrimsAgreement’ (LLM dissertation, University of

Pretoria, Pretoria). Availablefrom: < http://hdl.handle.net/2263/28403> (accessed

on 8 August 2015).

Van Parys, S & James, S (2010) ‘The Effectiveness ofTax Incentives in Attract-

ing Investment: Panel Data Evidence from the CFA Franc Zone’17(4) International

Tax and Public Finance 400–29; Yelpaala, K (2010) ‘Rethinking the Foreign Direct

Investment Process and Incentives in Post-conf‌lict Transition Countries 30(1) Nw.J.

Int’l L. & Bus.

Peterson, L (2006) ‘SouthAfrica’s Bilateral Investment Treaties: Implications for

Development and Human Rights’Friederich Ebert Foundation Occasional Paper No. 26.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201612

and the constraining effect of the TRIMS Agreement on Nigeria’s trade,

industrial and investment policy, but argues that countries can wisely work

round these challenges. Masamba

agrees with that view and advises African

countries to consider revoking older, inimically worded BITs and to adopt

well-negotiated and well-worded BITs, which include legally eff‌icacious

provisions that protect developmental issues and promote human rights and

environmental concerns.

It is notable that some African countries (for example South Africa and

Mauritius) have also entered into BITS with other African countries,

although Cleeve and Ibeh

concluded that intra-regional FDI was sub-

optimal and represented a missed opportunity. In 2012/2013 South Africa

began terminating and providing notice of the termination of its BITs with

various developed countries. The 2013 Promotion and Protection of

Investment Bill is meant to better protect its interests. The real lesson is that

FDI and FTAsmust be carefully negotiated in order to engender net benef‌its.

Good governance and institutions, as well as functional regional economic

arrangements, can facilitate African development.

The importance and role

of law in all of these is readily obvious. The precise nature and detailed design

of such arrangements is an area for further business-legal research.

Property acquisition

In the countries discussed in this article, foreign companies (and in Kenya,

especially public liability companies) may own property.

Employment

Usually, work permits and expatriate quotas are required for foreigners

taking up a job, as well as acquiring a business permit for the purpose of

establishing a business. Labour law legislation applies in the various countries;

South Africa is characterised by relatively rigid laws relating to job security.

Intellectual property protection

The various international conventions, such as the Berne, Paris, Patent

Cooperation, TRIPS, Universal Copyright and WIPO conventions apply in

Acemoglu, D, Johnson, S & Robinson, J (2001) ‘The Colonial Origins of

Comparative Development: An Empirical Investigation’ 91(5) American Economic

Review 1369–401; Scott, RW (2013) Institutions and Organizations: Ideas, Interest and

Identities (4 ed); Ajala, BO (2010) ‘Gearing FDITowards Sustainable Development in

Nigeria: The Role of the WTO TrimsAgreement’ (LLM dissertation, University of

Pretoria, Pretoria). Availablefrom: < http://hdl.handle.net/2263/28403> (accessed

on 8 August 2015).

Masamba, M (2014) ‘Africa and Bilateral Investment Treaties: To ‘‘BIT’’

or Not?’ Available from: g.za/article/africa-and-bilateral-

investment-treaties-to-bit-or-not-2014-07-23> (accessed on 8August 2015).

Cleeve, E & Ibeh, K (2012) ‘Foreign Direct Investment by Southern Multi-

nationals: The Case of African Firms’. Proceedings of the 13th IAABD Annual

Conference 196–206.

Peterson, L (2006) ‘SouthAfrica’s Bilateral Investment Treaties: Implications for

Development and Human Rights’Friederich Ebert Foundation Occasional Paper No. 26.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 13

much of the continent. Local statutes regulating copyrights, patents, and

trademarks generally follow similar principles. However, there are differen-

tial levels of currency and enforcement (Nigerian legislation is generally not

up to date, although ameliorated in certain instances by administrative

innovation). Ivory Coast, along with fourteen francophone countries,

subscribes to the Bangui Agreement of 1977, revised in 1999, relating to the

creation of the African Intellectual Property Organization, with its headquar-

ters in Yaoundé, Cameroon. The principles are essentially similar to the

intellectual property regime in the other countries.

Insolvency

Ivory Coast is a member of OHADA countries that have a uniform modern

insolvency code. South Africa has adopted the UNCITRAL Model Law on

Cross-Border Insolvency

and, like Kenya, reformed its insolvency legisla-

tion.

However, neither country has legislation as impressive in scope as the

regional approach to cross-border insolvency found in OHADA.

Nigeria

and Egypt

(and many of the other African countries) have insolvency

frameworks that are outdated, emphasise liquidation rather than restructur-

ing of insolvent parties and are inapt and unsuited for cross-border cases,

although reforms are spreading.

In both countries, and in much of Africa,

judicial delays are common in insolvency matters, as well as a lack of

appreciation by all relevant parties (creditors, banks and courts) of the global

emphasis on business rescue.

The consensus and recommendation of African experts is to avoid a ‘one

cap f‌its all sizes’ approach, whilst calling for national institutions attuned to

Weideman, J & Stander, AL (2012) ‘European and American Perspectives on

the Choice of Law Regarding Cross-Border Insolvencies of Multinational Corpora-

tions: Suggestions for South Africa’15(5) PER 133–227.

Idigbe, AI, Chiwete, C & Kalu, O (2012) ‘Insolvency and Restructuring —

Nigeria’ Newsletter of the International Law Off‌ice. Available from: .

internationallawoff‌ice.com/Newsletters/Insolvency-Restructuring/Nigeria/Punuka-

Attorneys-Solicitors/Scheme-of-arrangement-as-a-business-rescue-tool> (accessed

on 8 August 2015).

Massoud, MF (2014) ‘International Arbitration and Judicial Politics inAuthori-

tarian States’39(1) Law & Social Inquiry 1–30.

Idigbe, A (2011)‘Using Existing Insolvency Frameworks to Drive Business

Recovery in Nigeria: The Role of the Judges’(unpublished paper presented at

Federal High Court Judges conference held at Sankuru Hotel, Sokoto, Nigeria, on

11 October 2011). Available from:

judges_in_driving_a_business_recue_approach_in_existing_insolvency_

framework.pdf> (accessed on 8 August 2015).

Salami, I (2012) Financial Regulation in Africa: An Assessment of Financial Integra-

tion Arrangements in African Emergingand Frontier Markets.

Massoud, MF (2014) ‘International Arbitration and Judicial Politics inAuthori-

tarian States’39(1) Law & Social Inquiry.

Massoud; Idigbe, AI, Chiwete, C & Kalu, O (2012) ‘Insolvency and Restruc-

turing — Nigeria’Newsletter of the International Law Of f‌ice.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201614

the adoption of universal principles and models.

However, caution is

necessary to avoid jumping on the reform wagon with formulaic models, as

implementation is more important and the capability to do so is sometimes

suspect.

Implicitly, OHADA’s apparent straitjacket approach is seen as

somewhat undesirable, apart from the tone of obsequious genuf‌lection to

French civil law and francophone insularism that has limited its appeal.

However, given the impact of the direct correlation between insolvency,the

business environment and economic development, this is an area of con-

straint to African national and cross-border business that deserves to be fast

tracked for elimination and for comparative business-legal research.

Mas-

soud

observes that existing literature is slanted towards developed country

perspectives, leading to an apparent dearth of cross-border insolvency

literature that ref‌lects local realities in sub-Saharan Africa.

Competition

The abuse of dominance and anti-competitive practices, although not

approaching the sophistication and complexity witnessed in Europe and the

United States, is usually enjoined by statute, common law, or administrative

arrangements in many African states. Kenya and South Africa have national

competition statutes and regulatory authorities. In Nigeria, legislation is yet

to be passed by parliament; a number of sectoral regulatory bodies are

empowered to enforce anti-monopoly regulations. The Common Market

for Eastern and Southern African States (COMESA) Competition Commis-

sion commenced operations in January 2013, with some scholars ruefully

pointing out the unwelcome addition of an extra layer of regulations for

cross-border investment and calling for adequate synchronisation with

national competition frameworks.

The WestAfrican Economic and Mone-

tary Union (WAEMU) has a common competition policy, but appears to be

plagued by similar problems of undue centralisation, design and institutional

f‌laws, inapt synchrony with national frameworks and implementation

def‌icits.

Other regions do not yet have similar arrangements in place,

Massoud; Idigbe et al.

Owusu-Ansah, S (2006) ‘The Voice of the African Woman: A Theological

Ref‌lection of the Emerging Feminism in Africa’(thesis submitted to the Department

of Religion and Human Values of the Faculty ofArts, University of Cape Coast in

partial fulf‌illment of the requirements for the award of Master of Philosophy Degree

in Religious Studies, University of Cape Coast).

Cf Wihlborg, C (2002) ‘Insolvency and Debt Recovery Procedures in Eco-

nomic Development: An Overview of African Law’UNU/WIDER Discussion Paper

2002/27.

Massoud.

Angwenyi, V (2013) Competition Law and Regional Integration: The Com-

mon Market for Eastern and Southern Africa MIPLC Master Thesis Series (2012/

2013).

Bakhoum, M & Molestina, J (2011) ‘Institutional Coherence and Effectivity

of a Regional Competition Policy: The Case of the West African Economic

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 15

except for the East African Community (EAC) that gave notice of intention

to implement its Competition Act of 2006.

The African Competition

Forum (ACF) is a forum of regulators from forty-one African states for

networking, shared learning and promotion of best practices.

With many African countries still grappling with the introduction and

nurturing of markets, after decades of ‘command and control’ economic

regulation, there is limited regulatory capacity, a lack of competition culture

and pervasive crony capitalism currently in place. Anti-competitive practices

are more likely to be regular features of public service providers or the

monopolistic activities of a few dominant rent-seeking crony business

magnates and foreign business cartels, the very type of activities and persons

that competition off‌icials are politically powerless to indict.

South Africa

appears to be the country with the regime that most resembles that of the

OECD countries. Competition regulation in Africa must avoid concern with

straitjacket harmonisation of competition law and formalistic rules modeled

on neoclassical philosophy.

There is a need to innovate an African model of competition that focuses

on openness, market eff‌iciency, inclusiveness and targeted government

intervention that facilitates bottom-up creation and growth of local/African

f‌irms,

along the lines of the ‘new industrial policy’

or ‘competitiveness

approach’ (discussed later). This model needs to focus on regulatory political

clout and create the technocratic capacity to curb rent-seeking restraints in

markets, and nurture equity and inclusiveness

in order to curtail market-

government failure arising from political corruption as argued by public-

choice theory.

and Monetary Union (WAEMU)’. Available from:

1965508>

Bonge, GM (2010) ‘EAC Competition Law will Increase Cross-border Trade’

Business Daily. Available from: .businessdailyafrica.com/Opinion-and-

Analysis/EAC-competition-law-will-increase-cross-border-trade/-/539548/996812/-/

8nqiufz/-/index.html> (accessed on 8 August 2015).

Fox, EM & Gal, MS (2014) ‘Drafting Competition Law for Developing Juris-

dictions: Learning from Experience’ New York University Law and Economics Working

Paper 374 1–69.

Wood,DP (2002) ‘International Harmonization of Antitrust Law: The Tortoise

or the Hare’3 Chi. J. Int’l L. 391; Fox & Gal.

Cf Pitelis, CN (2003) ‘Privatisation, Regulation and Domestic Competition

Policy’ inWignaraja, G (ed) Competitiveness Strategy in Developing Countries: A Manual

for Policy Analysis 249–51; Porter, Michael E, Snowdon, Brian & Stonehouse, George

(2006) ‘Competitiveness in a Globalised World: Michael Porter on the Microeco-

nomic Foundations of the Competitiveness of Nations, Regions, and Firms’ 37(2)

Journal of International Business Studies 163–75.

Audretsch, DB (1998) ‘Industrial Organization and the New Industrial Policy’

CEPR Discussion Paper Series No. 1997.

Cf Fischer, E & Reuber, R (2003) ‘Industrial Clusters and Business Develop-

ment Services for SMEs in Developing Countries’ in Wignaraja,G (ed) Competitive-

ness Strategy in Developing Countries: A Manual for Policy Analysis 131–65.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201616

Dispute resolution/enforcement of contracts and judgments

Kenya, Nigeria and South Africa run adversarial legal systems, although

arbitration and alternative dispute resolution are now being promoted by law

and/or by court reform measures, especially for commercial disputes.

Foreign (Judgments Enforcement) Acts provide a means of enforcing foreign

judgments by registration within the jurisdiction on the basis of reciprocity;

otherwise these are only enforceable by bringing suit in the local court.

Arbitration Acts make the Convention on the Recognition and Enforce-

ment of Arbitral Awards (the New York Convention) applicable in these

countries. Judicial delays arising from court procedures, inadequate infra-

structure, ineff‌iciency and some measure of corruption detract from the

quality of justice across Africa, negatively impacting investments.

Gener-

ally, only locally registered legal practitioners may appear in the courts.

High and inexpensive enforcement regimes foster lower transaction costs

and higher levels of economic activity as traders are more willing to do

business, extend credit and pursue their rights to judicial recourse.

Bigsten

et al

concluded that contract disputes were frequent and judicial dispute

resolution generally weak in Africa, but that African f‌irms tended to avoid

judicial methods and to rely on direct negotiation and relational inf‌luences,

mostly to the satisfaction of the parties. In countries with better judicial

systems there appeared to be higher levels of recourse to the courts. The

authors argued that non-African f‌irms tend to regard African SMEs as

unreliable and were likely to perceive their tolerance for contractual

f‌lexibility and renegotiating of delivery and payment terms as opportunistic.

Preference for non-litigious methods is found in other regions as well.

Whilst there is an obvious need to reform African judiciaries, to lower

enforcement costs and to increase investment and business activities, the

preference for the use of networks and amicable dispute resolution by African

Economic Commission for Africa (ECA) (2005) ‘ADF IV: Governance for a

Progressing Africa’, 11-15 October 2004; World Bank (2010) Doing Business 2011:

Making a Difference for Entrepreneur’. See also Willebois, ED et al (2011) The Puppet

Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About

It. Available from: g/f‌inance/star_site/documents/

Puppet Masters.pdf>; Rudahindwa, JB (2015) ‘The Role of Integration through

Law in Tripartite African FTA’ESRC Seminar Series 1st Workshop.

World Bank (2004) Initiatives in Legal and Judicial Reforms; Japelli, T, Pagano, M

& Bianco, M (2005) ‘Courts and Banks: Effects of Judicial Enforcement on Credit

Markets’ 37 Journal of Money, Credit, and Banking 223–44; Kaniki, S (2006) ‘The

Importance of Courts for Trade Credit in East African Manufacturing Firms’Univer-

sity of the Witwatersrand Policy Paper 9.

Bigsten et al (2000) ‘Contract Flexibility and Dispute Resolution in African

Manufacturing’36 Journal of Development Studies 1–37.

Messick, RE (2005) What Governments can Do to Facilitate the Enforcement of

Contracts; Hendley, K, Murrell, P & Ryterman, R (2000) ‘Law, Relationships and

Private Enforcement: Transactional Strategies of Russian Enterprises’52 Europe-Asia

Studies 627–56.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 17

businesses should be ref‌lected in such reforms.

Specialised commercial

courts led to radical improvements in Nigeria, DR Congo, Ghana, Lesotho,

Mauritania, Mozambique and Rwanda.

Arbitration is embraced and encouraged by most African countries

and is

recommended by trading partners.

OHADA countries have the Uniform

Arbitration Act, which like the arbitration laws of Egypt, Kenya, Nigeria,

South Africa and some other African states, is based on UNCITRALModel

Law. Awards are f‌inal and binding in all OHADA states, similar to the rules

applicable to countries that subscribe to the New York Convention. Other

sub-regional organisations’ agreements, such as ECOWAS, provide for the

establishment of sub-regional Arbitration Tribunals. Kiggundu

doubts the

practicality of such approaches, given the dysfunctional implementation of

core mandates and the lack of capability to promote continent-wide capacity

in institution building. Nigeria and Egypt also play host to Regional Centre’s

for International Commercial Arbitration, although preference appears to be

for Egypt within Africa and Paris, London and increasingly Dubai outside the

continent.

OHADA’s Common Court of Justice and Arbitration is a court of f‌inal

appeal for member states and an arbitration court for business-law cases,

although parties may choose ad hoc tribunals. National supreme courts are

denuded of appellate jurisdiction with regard to OHADA laws. Critiques of

this arrangement generally highlight the issue of transfer of sovereignty;

however, the apparent over-centralisation, likely stultif‌ication of judicial

redress and apparent emphasis on adjudication is a weightier and more

overlooked shortcoming.

Cf Thomas-Hawthorne, L (2008) ‘Communication: Harmonisation of Con-

tract Law Characterized by Formality and Strong Enforcement Mechanisms Impera-

tive for Economic Development’13(1-2) Revue de Droit Uniforme.

World Bank (2013) ‘Remarkable Declines in Global Poverty, But Major Chal-

lenges Remain’ World Bank Press Release. Available from: .world

bank.org/en/news/press-release/2013/04/17/remarkable-declines-in-global-poverty-

but-major-challenges-remain> (accessed on 8August 2015).

Douajni, GK (2003) ‘The Recognition and Enforcement of Arbitral Awards in

OHADA Member States’ 20(2) Journal of International Arbitration 205–10.

Zhu, W (2011) ‘Arbitration as the Best Option for the Settlement of China-

African Trade and Investment Disputes’(paper presented at the workshop on Africa-

China Relations: Towards Sustainable Chinese Investment in Africa, University of

Hong Kong); also available in 2013 57(1) Journal of African Law 149–63.

Kiggundu, MN (2013) ‘China-Africa Legal and Judiciary Systems: Advancing

Mutually Benef‌icial Economic Relations’4(4) Beijing Law Review 155.

Dutson, S, Webster, L & Smyth, T (2014) ‘Arbitration is Fast Becoming the

Dispute Mechanism of Choice in Africa’ The Global Legal Post 24 June.Available at

style-82836387/> (accessed on 8 August 2015).

Cf Mancuso, S (2008) ‘The New African Law: Beyond the Difference Between

Common Law and Civil Law’14(1) Annual Survey of International & Comparative Law.

Beauchard, R & Kodo, MG (2011) ‘Can OHADA Increase Legal Certainty in

Africa?’World Bank Justice and Development Working Paper Series 24–5.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201618

Less reported is the issue of high legal costs relative to claims, which has led

to the introduction of small claims courts in some jurisdictions.

Dispute

resolution and enforcement is obviously an area for further business-law

research.

Cross-border trade and regional integration

Regional integration makes sense for Africa, given the sheer number of small

populations/economies, land-locked and other geographic disadvantages of

many countries and poor cross-country transport and communication links.

However, the def‌ining characteristic of African cross-border trade and

regional integration is the abysmally low level of intra-African trade. Much

of this trade is informal,

and suffers from constraining multiple regulations,

high taxation and corrupt border/customs barriers. Also notable is the

hyperactive, unhelpful, even contradictory, duplication or overlapping

membership in about fourteen regional integration arrangements.

The linear model of free trade area, to customs union, to economic

community to political union is the proposed route map, with the Economic

Community of West African States (ECOWAS), Common Market for

Eastern and Southern Africa (COMESA), Economic Community of Central

African States (ECCAS) and Arab Maghreb Union (AMU) supposed to lead

to an African Economic Community and ultimately to political union, the

Africa Union (AU).

The New Partnership for Africa’s Development

(NEPAD) initiative, meant to spearhead development through better gover-

nance and inclusive approaches, particularly through peer review and

pressure, has now been assimilated into AU frameworks

and may be

regarded as a welcome process for improving political and economic

governance.

Regrettably, most regional economic arrangements appear to be founder-

ing at the level of a customs union because of skirmishes over issues of

common tariffs, protectionist ploys

and the predilection of political leaders

World Bank (2010) Doing Business 2011: Southern African Development Commu-

nity (SADC) — Making a Difference for Entrepreneurs.

Mwaniki, J (2004) The Impact of Informal Cross-border Tradeon Regional Integration

in SADC and Implications for Wealth Creation. Available from:

org/documents/d0001002/CFA-Mwaniki_CORN.pdf> (accessed on 8 August

2015). See also Oculi, O (2005) ‘Cooperation and Integration in Africa: The Case of

Informal Cross-Border Trade’ 11th CODERISA General Assembly Rethinking Afri-

can Development: Beyond Impasse, Towards Alternatives, 6–11 December, Maputo,

Mozambique.

Hartzenberg, T (2011) ‘Regional Integration in Africa’ WTO Staff Working

Paper ERSD-2011-14.Available from:

Fagbayibo, B (2012) ‘Exploring Legal Imperatives of Regional Integration in

Africa’45(1) Comparative and International Law Journal of Southern Africa 64–76.

Viljoen, F (2012) International Human Rights Law inAfrica 167.

Moore, M (ed) (2004) Doha and Beyond: The Future of the Multilateral Trading

System; Hartzenberg, T (2011) ‘Regional Integration in Africa’ WTO Staff Working

Paper ERSD-2011-14.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 19

for the retention of the coercive powers of the state for prebendal and

rent-seeking purposes.

Lack of industrial capacity, skewing towards inter-

continental trade, and a reliance on commodities and a few traded sectors also

constrain the growth of merchandise and intra-Africa trade.

Microeco-

nomic eff‌iciency and capacity growth at the level of the f‌irm is, therefore,

urgently required to spur higher and more diverse merchandise and services,

as well as cross-border trade. The need for the creation of clement business

investment climates is again highlighted.

South Africa, Mauritius and Botswana are regarded as the best competitive

markets in sub-Saharan Africa and their institutional, infrastructural and

f‌inancial environments are the best. Nigeria and Ivory Coast are the

dominant economies in ECOWAS and Ivory Coast in OHADA and

WAEMU. However, they feature relatively harsh business environments,

with Nigeria performing poorly, albeit currently the largest economy in

Africa. ECOWAShas had diff‌iculty progressing into a customs union and the

francophone/anglophone divide has been problematic.

Kenya, the domi-

nant economy in EAC, appears to have been more successful in its

integration efforts. The EU-ACP Economic Partnership Agreements (EPAs)

introduced thorny challenges of equity, given the imbalance between the

parties and the perceived threat to the developmental policy space in which

African countries could navigate. The differing national interests of the

various countries made sub-regional agreements diff‌icult to conclude and the

EU imposed an ultimatum to conclude EPAs by late 2014. The pre-

dominant sentiment appears to be that the EPAsare not in the best interests of

African countries or for regional integration.

100

Overall, regionalism should be viewed as practical, desirable and benef‌i-

cial

101

since the possibility of reconf‌iguring African states by f‌iat is unrealis-

tic.

102

Further research and positive measures are required to encourage

smoother self-sustaining economic, legal, cultural and political cluster

Fagbayibo, B (2012) ‘Exploring Legal Imperatives of Regional Integration in

Africa’45(1) Comparative and International Law Journal of Southern Africa.

Economic Commission for Africa (ECA) (2010) Assessing Regional Integration in

Africa IV: Enhancing Intra-African Trade. Available from:

aria4/index.htm> See also Sindzingre, A (2011) ‘Towards Structural Change or

Locking in Path Dependence? Sub-Saharan African Economies at the Crossroads’

The Economist, 6 January.

Fagbayigbo; Asante, SKB (1997) Regionalism and Africa’s Development: Expecta-

tions, Reality and Challenges.

100

Taf‌irenyika, M (2014) ‘Trade in Africa: Unf‌inished Business’ Africa Renewal.

Availablefrom:

101

Economic Commission for Africa (ECA) &African Union (AU) (2006) Assess-

ing Regional Integration in Africa II, Rationalizing Regional Economic Communities; Eco-

nomic Commission for Africa (ECA) (2004) ‘Assessing Regional Integration in

Africa’UNECA Policy Research Report.

102

Ramutsindela M (2001) Unfrozen Ground: South Africa’s Contested Spaces. See

also Fagbayibo, B (2012) ‘Exploring Legal Imperatives of Regional Integration in

Africa’45(1) Comparative and International Law Journal of Southern Africa.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201620

formations across African borders. These clusters should be viewed as points

of contact

103

leading gradually to the envisioned pan-African common

market.

Harmonisation, unif‌ication of laws and OHADA

There is some terminological confusion in the use of the terms ‘harmonisa-

tion’ and ‘unif‌ication’, as well as the strategic measures for implementing

them. Harmonisation has been def‌ined as a process of welding different

types, traditions and standards of laws into a coherent separate whole system

of laws by an international organisation that is thereupon directly binding on

states.

104

Harmonisation may also be viewed as denoting degrees of unifor-

mity of laws. In ‘minimum harmonisation’ the intermixture sets a f‌loor and

treaty obligations the ceiling, whilst allowing separate legal systems to adopt

higher standards than the minimum, if they so wish. In ‘maximum harmoni-

sation’ the intermixture must exist alone and all other systems must cease to

exist. In between, various combinations may allow various forms of

co-existence. This is especially so, where the dictates of practicality require

the continued existence of national laws or seek their approximation to a

‘common standard’ due to cultural, political or logistical realities or to foster

competition between legal systems in the hope that the existing uniform law

can be improved by the adoption of the outcomes of the ‘competition’.

Unif‌ication refers to the process of the creation and imposition of identical

rules.

105

‘Convergence’ may be regarded as an evolutionary process of

steering differing laws, standards and rules to an eventual approximated

standard or identical rules, sometimes by independent legislation of sovereign

states, or by judicial and doctrinal development of laws.

106

Law is the primary

tool and object for all of these forms of ‘integration’.

107

OHADA laws are

confusingly discussed as ‘harmonisation’ or ‘unif‌ication’ of laws. However, it

should probably be regarded as a unif‌ication of laws, since the OHADA

Uniform Acts apply directly to the exclusion of national rules, once adopted

by the requisite organ of a regional organisation.

108

Unif‌ication has been

103

Barkindo, BM (1985) ‘The Mandara Astride the Nigeria-Cameroon Boundary’

in Asiwaju, AI (ed) Partitioned Africans 29–50; Asiwaju, AI (1985) ‘The Conceptual

Framework’in Asiwaju, AI (ed) Partitioned Africans 1–18.

104

Lohse, EJ (2011) ‘The Meaning of Harmonisation in the Context of European

Union Law–A Process in Need of Def‌inition’in Andenas, M & Andersen, CB (eds)

Theory and Practice of Harmonisation.

105

Lohse, EJ (2011) ‘The Meaning of Harmonisation in the Context of European

Union Law — AProcess in Need of Def‌inition’ in Andenas, M &Andersen, CB (eds)

Theory and Practice of Harmonisation.

106

Lohse.

107

Lohse.

108

Yakubu, JA(2012) ‘Community Law in International Business Transactions’ in

Moore-Dickerson, C (ed) Unif‌ied Business Laws for Africa: Common Law Perspectives on

OHADA (2 ed).See also Beauchard, R & Kodo, MG (2011) ‘Can OHADAIncrease

Legal Certainty in Africa?’ World Bank Justice and Development Working Paper Series

24–5; Mbaye, K (2004) ‘L’histoire et les objectifs de l’OHADA’205 Petites Aff‌iches at

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 21

described as ‘the most intensive form of harmonisation’.

109

There is probably

no form of unif‌ication that will result in absolute convergence or immutable

uniformity of laws and legal orders in multi-jurisdictional harmonisation

processes,

110

particularly in the interpretation of the law, even as regards

OHADA.

111

However, harmonisation of laws limits the role of law as a trade

barrier,

112

so any level of integration is probably better than none.

OHADA is perceived in some quarters to be a subtle instrument and ploy

in the long game of French imperialism.

113

There is some ambivalence to the

adoption of OHADA by other countries because of the differences in legal

traditions, the perception of non-ref‌lection of peculiar regional interests/

trade practices and poor congruence with other regional judicial institu-

tions.

114

Other reasons include: ignorance of or resistance to OHADA by

non-OHADA community lawyers, importation rules which are in contra-

diction to other regional agreements

115

and the ineff‌iciency of ‘centralising’

regional institutions in Africa.

116

6, quoted in Kalm, G (2011) ‘Building Legal Certainty through International Law:

OHADA Law in Cameroon’ Buffett Center for International and Comparative Studies

WorkingPaper Series 11-005 at 11.

109

Lohse.

110

Boodman, M (1991) ‘The Myth of Harmonization of Laws’ 39 American Journal

of Comparative Law 699.

111

KPMG (2012) Doing Business in Cameroon; Beauchard, R & Kodo, MG (2011)

‘Can OHADA Increase Legal Certainty inAfrica?’ World Bank Justice and Development

WorkingPaper Series 24–5.

112

Matinyenya, P (2011) ‘South Africa’s Non-ratif‌ication of the United Nations

Convention on Contracts for the International Sale of Goods (CISG): Wisdom or

Folly, Considering the Effect of the Status Quo on International Trade’(LLM thesis,

Faculty of Law, University of the Western Cape). Available from:

ac.za/handle/123456789/2926> at 28; KPMG (2012) Doing Business in Cameroon;

Mancuso, S (2008) ‘The New African Law: Beyond the Difference Between Com-

mon Law and Civil Law’14(1) Annual Survey of International & Comparative Law.

113

Kalm, G (2011) ‘Building Legal Certainty through International Law: OHADA

Law in Cameroon’Buf fett Center for International and Comparative Studies Working Paper

Series 11-005; Beauchard, R & Kodo, MG (2011) ‘Can OHADA Increase Legal

Certainty in Africa?’ World Bank Justice and Development Working Paper Series 24–5;

Ntongho, RA (2012) ‘Political Economy of the Harmonisation of Business Law in

Africa’5(2) Journal of Politics and Law 58–67.

114

Anyamele, U (2011) ‘The United Nations Convention on Contracts for the

International Sale of Goods: A Proposal for Nigeria’ (LLM thesis, University of

Durham). Available from: .cisg.law.pace.edu/cisg/biblio/anyamele.

html#141> (accessed on 8 August 2015); Shumba, T (2014) ‘Harmonising the Law

of Sale in the Southern African Development Community (SADC): AnAnalysis of

Selected Models’ (Doctoral dissertation, Stellenbosch University, Stellenbosch,

South Africa).

115

Beauchard, R (2012) ‘OHADA Nears the Twenty-Year Mark: AnAssessment’

in Cisse, H et al (eds) World Bank Legal Review: Legal Innovation and Empowerment for

Development 223–333. See also Shumba.

116

Kiggundu, MN (2013) ‘China-Africa Legal and Judiciary Systems: Advancing

Mutually Benef‌icial Economic Relations’4(4) Beijing Law Review 155.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201622

Lethargic adoption of OHADA, the low level of trade within and with

francophone Africa; the insular nature of OHADA laws; initially solely

couched in French, but now also available in ‘very poor quality’ English,

Spanish and Portuguese translations

117

and wholly beholden to French civil

law,

118

suggests OHADA’s limited relevance to non-French-speaking

Africa. Similarity between some OHADA Uniform Acts and global conven-

tions (such as CISG) has also been presented as a reason why other African

countries should rather ratify those conventions, which are perceived as

being more practically attuned to the objective of increasing Africa’s global

trade and overall competitiveness,

119

or use them alongside OHADA and

CESL as building blocks for improved regional laws.

120

There is no doubt that OHADA is an instructive model of the successful

integration of laws, as it has largely led to unif‌ication of laws in member

states, albeit with varying degrees of acceptance and uniformity.

121

The

problem of a weak enforcement framework remains,

122

as the under-funded

Common Court of Justice and Arbitration (CCJA), located in Ivory Coast, is

plagued by a backlog of cases.

123

The CCJA is perceived as geographically

distant and is sometimes treated as an unwelcome rival by legal professionals

and apex appeal courts of other OHADA countries.

124

The need to prioritise

commercial arbitration is apparently not suff‌iciently ref‌lected in the original

117

Beauchard & Kodo.

118

Kalm.

119

Anyamele, U (2011) ‘The United Nations Convention on Contracts for the

International Sale of Goods: A Proposal for Nigeria’ (LLM thesis, University of

Durham); Idris, MB (2012) ‘Harmonization of Business Laws in Africa —An Insight

into the Laws, Issues, Problems and Prospects’ in Moore-Dickerson, C (ed) Unif‌ied

Business Laws for Africa:Common Law Perspectives on OHADA (2 ed) 7–27.

120

Shumba, T (2014) ‘Harmonising the Law of Sale in the Southern African

Development Community (SADC): An Analysis of Selected Models’ (Doctoral

dissertation, Stellenbosch University, Stellenbosch, South Africa); Goode, R

(1993)‘Harmonization, Unif‌ication and Internationalisation’ in Goode, R & Cran-

ston, R (eds) Commercial and Consumer Law. See also Di Matteo, LA (2012) ‘The

Curious Case of Transborder Sales Law: A Comparative Analysis of CESL, CISG,

and the UCC’ in Magnus, Ulrich (ed), CISG vs Regional Sales law Unif‌ication with a

focus on the new Common European Sales Law.

121

KPMG (2012) Doing Business in Cameroon; Kodo, MJV (2010) L’application des

Actes uniformes de l’Ohada.

122

Dickerson, CM (2005) ‘Harmonizing Business Laws in Africa: OHADA Calls

the Tune’44 Columbia Journal of Transnational Law 17.

123

Beauchard, R & Kodo, MG (2011) ‘Can OHADA Increase Legal Certainty in

Africa?’World Bank Justice and Development Working Paper Series 24–5.

124

Frilet, M (2013) ‘Legal Innovation for Development: The OHADA Experi-

ence’ 4 The World Bank Legal Review; Beauchard & Kodo; Diakhate M (2010)

‘Simplif‌ied Procedures and Enforcement Proceedings: The Diff‌icult Gestation of

Community Legislation’ Revue sénégalaise de droit des affaires 2–4.Available from:

&q_boolean=or&inmotscles=on& action=rechercher&type=doctrine> or

ohada. com / ohadata D-05-10> (accessed on 8 August 2015). See also Dickerson.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 23

design or operation of OHADA and may suggest a need for conscious

emphasis in that direction by the organisation.

125

From a practical point of view, the relatively low uptick in cross-border

trade within OHADA suggests that integration of laws, although a boon,

126

is not the primary source, stimulant or incentive for increasing trade or

economic activity within or across African borders. Appositely, Matin-

yeneya

127

observes that harmonisation of laws probably does not directly lead

to creation of trade; however, it reduces trade barriers. It has been suggested

that business people do not regard legal diversity as a key barrier to trade and

may in fact prefer competition that helps the market select the best legal

institutions.

128

A survey of leaders of African multi-nationals, albeit with a

very low level of response, appeared to buttress the point that poor transport

and communications links, an unfriendly business environment and anti-

competitive practices, in that order, were regarded as more serious challenges

to internationalisation than differences in business laws or legal diversity

(Exhibit 1). The survey results also suggested that the leaders of African

multinationals surveyed preferred the adoption of CISG, rather than

OHADA, across Africa (Exhibit 2).

An inclusive and participative process of re-conceptualisation, redesign,

reformulation and modif‌ication of OHADA

129

may be a better option and

strategy. This should accommodate other legal orders, traditions and states

within Africa in that process.

130

Beauchard and Kodo

131

argue that OHADA

institutions require ‘substantial modif‌ication and reform’ to enhance their

eff‌iciency and effectiveness. Reforms may facilitate commitment, a more

125

Beauchard & Kodo; Richards, CD & Nwankwo, S (2005) ‘Reforming the

Legal Environment of Business in Sub-Saharan Africa: Moderating Effects on For-

eign Direct Investment’47 Managerial Law 154–63.

126

KPMG (2012) Doing Business in Cameroon.

127

Matinyenya, P (2011) ‘South Africa’s Non-ratif‌ication of the United Nations

Convention on Contracts for the International Sale of Goods (CISG): Wisdom or

Folly, Considering the Effect of the Status Quo on International Trade’(LLM thesis,

Faculty of Law, University of theWestern Cape).

128

Shumba, T (2014) ‘Harmonising the Law of Sale in the Southern African

Development Community (SADC): An Analysis of Selected Models’ (Doctoral

dissertation, Stellenbosch University); Goode, R (1993)‘Harmonization, Unif‌ication

and Internationalisation’ in Goode, R & Cranston, R (eds) Commercial and Consumer

Law; Di Matteo, LA (2012) ‘The Curious Case ofTransborder Sales Law: A Compar-

ative Analysis of CESL, CISG, and the UCC’ in Magnus, Ulrich (ed), CISG vs

Regional Sales Law Unif‌ication with a Focus on the New Common European Sales Law.

129

Onyema, E (2014) ‘Regional Arbitration Institution for ECOWAS: Lessons

from OHADA Common Court of Justice andArbitration’ 17(5) International Arbitra-

tion Law Review 99–111; Shumba, T (2014) ‘Harmonising the Law of Sale in the

Southern African Development Community (SADC): An Analysis of Selected

Models’ (Doctoral dissertation, Stellenbosch University, Stellenbosch, South Africa);

Tumnde, MS (2009) Unif‌ied Business Laws for Africa: Common Law Perspectives on

OHADA.

130

Beauchard & Kodo.

131

Beauchard & Kodo.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201624

acceptable and practically useful model of integration and a framework for

increasing inter-African business activity and trade. Alternatively, the adop-

tion of OHADA may be brought to the front burner of AU or NEPAD, so

that political authorities may engage with national and regional legal

communities to obtain their buy-in and the formulation of change pro-

grammes, leading to adoption of a modif‌ied and widely acceptable OHADA

framework. This is another area for further business-law research.

In the end, although there are strictures that cloud the subtle campaign for

the unconditional adoption of OHADA, there is no unqualif‌ied endorse-

ment of CISG, which has been adopted by Africa’s major trading partners,

and by scholars, particularly given the alleged weaknesses in, or ambiguity of,

some provisions, institutional structures and methods of harmonisation.

There is general agreement that harmonisation of business laws in Africa is

desirable and there is support by multi-lateral development institutions for

that process. Unif‌ication is not regarded as an inevitable or necessary legal

development, meaning that convergence or pluralism may even be an

option,

132

as in European company

133

and sales laws,

134

or in the ASEAN

region

135

for example. The debate is, therefore, likely to continue.

136

What

the dominant economies of Africa or international trade partners choose to

implement as their inter-African trade strategy, rather than the technical

merits or promotion of unique ‘African’ models, may be more determina-

tive.

African global competitiveness — the role of clusters

Competitiveness is used in management and business literature to describe

the ability of f‌irms to deploy management skills to create specialised assets

from inputs and combine them with innovation and superior productivity to

offer a product that is preferred, thereby extracting sustainable value or rents

and prevailing over competition in markets. Clusters are: ‘geographic

concentrations of interconnected companies, specialized suppliers, service

providers, f‌irms in related industries, and associated institutions (for example,

132

Shumba.

133

Deakin, S (2000) ‘The Many Futures of the Contract of Employment’ Cam-

bridge WorkingPaper Series No. 191.

134

Piers, M & Vanleenhove, C (2012) ‘Another Step Towards Harmonization in

EU Contract Law: The Common European Sales Law’ 50(13) Revista Trimestral De

Direito Civil 163–90.

135

Cf Zeller, B & Nikolic, J (2015) ‘Trade Harmonisation-How Harmonised Is It?

XVIII Int’l Trade & Bus. L. Rev.118–61.

136

Cf Akin-Olugbade, AA (2007) ‘The African Development Bank’s Contribution

to the Harmonization of Investment Laws in Africa and Prospects for Future Harmo-

nization of such Laws’ in Proceedings of the Annual Meeting, The American Society of

International Law 451–54.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 25

universities, standards agencies, trade associations) in a particular f‌ield that

compete but also cooperate’.

137

Porter

138

posits that the competitiveness of clusters depends on the quality

of specif‌ic conditions that facilitate the continual upgrade and creation of

f‌irms’ specialised assets and competitive positions that produce success in

global markets and extraction of superior rents. These conditions are: factors

and inputs, demand conditions, related and supporting industries and the

context for f‌irms’ strategy and rivalry. The emphasis is on enabling business

environmental conditions that generate competition and creative tension for

mutual learning, innovation and high productivity within clusters, resulting

in superior microeconomic eff‌icency and value creation. A contrary

approach focuses on extending government protection or support to

hand-picked sectors and players, creating non-competitive business environ-

ments that fail to stimulate qualitative management, improvements in

microeconomic efff‌iciency and success in global value chains.

Clusters emphasise the inter-connectedness of businesses, economies and

societies and the value created by the quality of a business environment. Poor

business environments may be expected to produce poor quality f‌irms with

poor competitive perfromance.

139

This emphasises the importance of

enabling regulatory frameworks and highlights the possibility that Africa can

unite to create cross-border clusters and nurture a continent-wide qualitative

and competitive businesss environment that upgrades the capacity and global

performance of African f‌irms to world-class standards.

Policies that drive serious investment in infrastructure, business-friendly

regulatory frameworks, good governance, access to capital, and human and

social development

140

are required.

141

Delgado et al argue that lower levels of

clustering/specialisation on a regional level tend to produce lower levels of

prosperity. By implication, continent-wide cluster formation and business

environment upgrades in a collaborative and synergistic manner are neces-

sary, as this will boost local/African f‌irms and attract a greater level of

investment by offering a more competitive platform for global f‌irms to

operate at higher productivity and reap the gains of the enhanced business

environment, redounding in greater all-round prosperity.

142

The implication

137

Porter, ME (2000) ‘Location, Competition and Economic Development: Local

Clusters in a Global Economy’, 14(1) Economic Development Quarterly 15.

138

Porter.

139

Alfaro, L (2008) ‘Globalization Meets National Institutions: International Capi-

tal Flows’Harvard Business School Module Note Instructor Only 708–41.

140

Cf Agbor,JA & Taiwo, O (2014) ‘The Fundamental Determinants of Competi-

tiveness in African Countries’Economic Resear ch SouthernAfrica (ERSA) Working Paper

No. 463.

141

Delgado, M, Porter, ME & Stern, S (2014) ‘Clusters, Convergence and Eco-

nomic Performance’43(10) Resear ch Policy 1785–99.

142

Porter, Michael E, Snowdon, Brian & Stonehouse, George (2006) ‘Competi-

tiveness in a Globalised World: Michael Porter on the Microeconomic Foundations

of the Competitiveness of Nations, Regions, and Firms’ 37(2) Journal of International

Business Studies 163–75.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201626

is that cluster-based approaches should be adopted and regulatory red tape,

trade barriers and productivity-sapping institutions must be removed. Inter-

conectedness of f‌irms, economies and societies should be encouraged.

Aditionally, openess, competition, innovation, skills development, good

corporate governence and other institutions that engender microeconomic

eff‌icency must be embraced by African countries in concert.

Suff‌ice it to say that our study countries and many others on the continent

pursue ‘cluster-based’ policies and initiatives, with varying degrees of

commitment, consistency, skill and success: South Africa,

143

East Africa and

Mozambique,

144

North Africa,

145

Nigeria,

146

and African ICT & knowledge

clusters. Zeng

147

and McCormick

148

in their study of clusters in Africa

observed that weak linkages occasioned by small markets, poor infrastruc-

ture, weak legal, social, economic and political institutions, weak asssocia-

tional ties between cluster participants, a poor macroeconomic environment

and lack of policy support constrained the growth of industrial clusters within

nations. They called for governments, donors and the business community to

support existing clusters and encourage new ones with favourable reguatory

and incentive environments.

Nogales’

149

study of agricultural clusters (ACs) in developing countries,

including Africa, agreed with those prescriptions and noted the need for laws

to serve as a framework for clustering. He added that ACs seldom start

autonomously, need to be induced and require careful calibration and

balance of government intervention. Morris and Barnes

150

observed that

143

Melax, S (2013) ‘An Implementation and Management Framework for Cluster

Initiatives in South Africa’ (Doctoral dissertation, Stellenbosch University, Stellen-

bosch, South Africa).

144

Nordkvelde, M (2014) ‘Emerging Clusters in the East African Community and

Mozambique’ Research Report 2/2014 BI Norwegian Business School. Available

from:

7b036a35e9a341c2c1257c990040441c/$FILE/2014-02-Nordkvelde.pdf> (accessed

on 8 August 2015).

145

Benner, M (2012) ‘Cluster Policy as a Development Strategy: Case Studies from

the Middle East and North Africa’ University of Lüneburg Working Paper Series in

Economics No. 255. Available from: .leuphana.de/f‌ileadmin/user_

upload/Forschungseinrichtungen/ifvwl/Working>(accessed on 8 August 2015).

146

Meagher, K (2007) ‘Manufacturing Disorder: Liberalization, Informal Enter-

prise and Economic ‘‘Ungovernance’’ in African Small Firm Clusters’ 383 Develop-

ment and Change 473–503.

147

Zeng, DZ (2008) ‘Knowledge, Technology, and Cluster-based Growth in

Africa: Findings from 11 Case Studies of Enterprise Clusters in Africa’in Zeng, DZ

(ed) Knowledge, Technology, and Cluster-based Growth in Africa 1–13.

148

McCormick, D (1999) ‘African Enterprises Clusters and Industrialization: The-

ory and Reality’27(9) World Development 1531–51. See also Zeng.

149

Nogales, EG (2010) ‘Agro-based Clusters in Developing Countries: Staying

Competitive in Globalised Economy Agricultural Management, Marketing and

Finance’FAO Occasional Paper No. 25.

150

Morris, M & Barnes, J (2006) ‘Regional Development and Cluster Manage-

ment: Lessons from South Africa’in Scott, AJ & Garofoli, G (eds) Development on the

Ground: Clusters, Networks, and Regions in EmergingEconomies.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 27

orthodoxy leaned against government intervention in industrial policy

151

and the limited capacity of governments to drive cluster policy, but

concluded that governments could play a role in facilitating the start-up of

clusters, apart from providing enabling environments. Implementation of

cluster policy by specialised agencies at regional levels that develop the

requisite skills and sensitivity for business interests through regular interac-

tion with cluster players was particularly important, because of the need to

integrate economic development measures. The ECA,

152

in a study of

mineral clusters in South Africa and Mozambique, argued that regional

cooperation between national clusters could increase intra-regional FDI and

economic gains. Indeed, De Oliveira

153

argues that physical connectedness is

no longer an imperative for partcipation in a cluster in light of the internet,

cheaper effcient transport and logistic links and easier access to capital.

It is notable that a Pan African Infrastructure Development Cluster

initiative supported by the African Union, United Nations, ECCAS,

ECOWAS and SADC is under way. The Maputo Development Corridor

Spatial Development Initiative is an attempt at regional integration between

South Africa and Mozambique, especially through infrastucture upgrades,

which has resulted in increased FDI inf‌lows and human communication,

although apparently one sided and faltering at consistent implementation of

follow-through action.

154

This reveals that much hard work, follow-

through, observance of the subsidiarity principle and encouragement of

bottom-up approaches, involving business-to-business and people-to-

people contact is required to make regional cluster intitives take root and

thrive. Gathii

155

usefully suggets that linkages between the regional eco-

nomic communities (RECs) will go a long way in fostering regional and

continental clusters, meaning that methodical implementation and achieve-

ment of the AEC project is an over-arching framwork through which

inter-African clusters can evolve. That is a top-down route; therefore, a

complementary second route must be the removal of barriers to cross-

country cluster initiatives between African businesses and fostering, by

deliberate policy and coordinated implementation, the emergence and

growth of such intitiatives.

Integrated national/regional framework legislation has been used to

facilitate cluster formation and management, both at administrative and

151

Porter, ME (1996) ‘What is Strategy?’74(6) Harvard Business Review 61–78.

152

Economic Commission for Africa (ECA) (2010) Assessing Regional Integration in

Africa IV: Enhancing Intra-African Trade.

153

De Oliveira, AJP (2008) Upgrading Clusters and Small Enterprises in Developing

Countries: Environmental, Labor, Innovation and Social Issues.

154

Roodt, MJ (2008) ‘The Impact of Regional Integration Initiatives and Invest-

ment in a Southern African Cross-Border Region: The Maputo Development

Corridor’ 12(1) African Sociological Review 88–102.

155

Gathii, JT (2011) African Regional TradeAgreements as Legal Regimes 389.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201628

intra-cluster level.

156

Less prescriptive, ‘bottom-up’approaches focus on

industry leadership, with government provision of part funding for strategic

plans and asscociational activities. Economic incentives, information,

research, training and competitive regional grants are possible in some other

cases.

157

A ‘one cap f‌its all’ approach is not feasible and there should be an

effort to understand what will work best in each African country and across

the continent. Therefore, this is another area for further business-legal

research.

Entrepreneurship development and the African Enterprise

Economy concept

The role of entrepreneurs in resource accumulation and allocation, innova-

tion, economic growth and sustainable economic development is well

established. African entrepreneurs have been characterised as: small scale,

labour intensive, and low in skills.

158

They are also static and innovation

regressive.

159

The huge potential of entrepreneurship development to

African economic development has also been noted.

160

The need for

appropriate institutions to promote that cause has been canvassed. For

example, Richard Joseph regards Africans as ‘inveterate entrepreneurs’ who

require governance, institutions and appropriate policies to unleash the

forces to drive sustainable long-term growth and proposed the creation of

‘enterprise societies’.

161

Although the overall institutional environment and governance regime in

African countries requires great change, certain policies appear to improve

the quality of entrepreneurship in a narrow sense. These include appropriate

policies, entrepreneurship education,

162

access to f‌inance, infrastructure, and

156

Cf Borrás, S & Tsagdis, D (2008) Cluster Policies in Europe:Firms, Institutions and

Governance 116.

157

Mills, K, Reynolds, E & Reamer, A(2008) Clusters and Competitiveness: A New

Federal Role for Stimulating Regional Economies.

158

Frese, M (ed) (2000) Success and Failure of Microbusiness Owners in Africa: A

Psychological Approach 161–90.See also Murphy, DF (2001) African Enterprises and the

Global Compact: Adding Value through Human Relationships (also available in 2003(11)

Journal of Corporate Citizenship).

159

Sherief, SR (2005) Entrepreneurship as an Economics Force in Rural Development.

Available from: .africaeconomicanalysis.org/articles/gen/rural_

entrepreneurship.html>. See also Tesfayohannes, M (2012) ‘African Entrepreneurs

Should Plan and Aspire Beyond the Fence at the Current Complex Global Business

Environment’, European African Alliance Conference 2012: Development Initia-

tives, Trade Relations and Interregional Cultural Exchange in the European African

Alliance, Berlin, Germany.

160

Tesfayohannes.

161

(2008) ‘Accelerating the Creation of Enterprise Societies: A New Nigerian

Mindset’Brookings Institution. Available from:

speeches/2008/10/22-nigeria-joseph>

162

Kiggundu, MN (2002) ‘Entrepreneurs and Entrepreneurship in Africa: What is

Known and What Needs to be Done’ 7(3) Journal of Developmental Entrepreneurship

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 29

marketing

163

and the strategic development of alliances. Von Ravensburg

164

also mentions the value of entrepreneur cooperatives as a form of enterprise

cluster to promote small, medium and micro-sized enterprises (SMMEs), and

growth and employment in Africa. She recommends an evolutionary and

f‌lexible approach to the development of supportive legal principles and rules,

albeit without any restrictions on the cooperatives, to the benef‌it of legal and

natural persons.

There is a long history on the mishaps associated with cooperatives, such as

politicisation, poor governance, regulatory failures, inertia to globalisation

and economic change

165

and some literature on the subject in Africa.

166

It is a

subject that many governments ‘talked up’ in the past, albeit without putting

in place the required policies and strategies or level of skills development,

access to f‌inance and regulatory support.

167

The Recommendation on the

Promotion of Cooperatives, 2002,

168

adopted by the International Labour

Organization (referred to as ‘Recommendation No. 193’ and ‘the ILO’

respectively), may be regarded as a benchmark standard.

Almost all countries in East and southern Africa have a ‘Cooperatives

Law’,

169

as do many other regions. These generally prescribe for declaration

of cooperative principles, cooperative autonomy, membership, organs and

governance processes, registration procedures, three or four levels of cooper-

ative structures, f‌inance and audits, among other things. Noticeable short-

comings include: low awareness amongst the general public about

cooperatives in general, sub-optimal use of cooperatives for ‘bottom-up’ and

grassroots cluster formation, inapt policies and legal frameworks. Other

239–58;Sherief; Bailey, H (2007) ‘Entrepreneurial Spirit as Crucial Driver for

Development and Cooperation’ Wittenberg Center for Global Ethics Discussion Paper

2007-1.

163

Schaumburg-Mûller, H, Jeppesen, S & Langevang, T (2010) ‘Entrepreneurship

Development in Africa: Report from a Workshop 6–8 September’ CBDS Working

Paper Series, No. 12/2010; United Nations Off‌ice of the Special Advisor on Africa

(UNOSAA) (2008) Small Scale Enterprise Development and FDI in Africa: Challenges and

Opportunities. Availablefrom:

164

VonRavensburg, NG (2009) ‘Enterprise Future Lies in Cooperation: Entrepre-

neur Cooperatives in Africa’CoopAFRICA Working Paper No. 2.

165

Wanyama, FO, Develtere, P & Pollet, I (2009) ‘Reinventing the Wheel?

African Cooperatives in a Liberalized Economic Environment’ 80(3) Annals of Public

and Cooperative Economics 361–92.

166

Wanyama, FO, Develtere, P & Pollet, I (2008) ‘Encountering the Evidence:

Co-operatives and Poverty Reduction in Africa’41(3) Journal of Co-Operative Studies

16–27; Hiez, D & Tadjudje, W (2013) ‘The OHADACooperative Regulation’ in

Cracogna, D, Fici, A & Henry¨, H (eds) International Handbook of Cooperative Law 10.

167

Theron, J (2010) ‘Cooperative Policy and Law in East and Southern Africa: A

Review’ILO CoopAFRICA Working Paper No. 18.

168

ILO (2002) R193 — Promotion of Cooperatives Recommendation No. 193.

Recommendation Concerning Promotion of Cooperatives Adoption: Geneva, 90th

ILC session.

169

Maghimbi, S (2010) ‘Cooperatives in TanzaniaMainland: Revival and Growth’

ILO CoopAFRICA WorkingPaper No. 14.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201630

shortcomings include a lack of incentives, inadequate cooperative and

business models, inadequate linkage to other business laws, poor overall

economic strategy and growth sectors/value chains, as well as inadequate

support for training and entrepreneurial advice.

The East African Community Legislative Assembly passed the 2014 East

African Community Cooperative Societies Bill in January 2015, which aims

to promote EAC cooperatives that operate across the region and can go into

joint ventures with different businesses in the region. This is exciting, as it

should support cross-border enterprise cluster formation likely to promote

collective action and socio-economic development in the region.

Develtere et al

170

observed that there has been a renaissance; the unif‌ied

cooperative model popular in common-law countries has gradually been

eroded by the social economy model, which is popular in Francophone

countries. There is movement from agricultural and credit services to other

services and some cooperatives are adopting multiple functions and services.

However, they conclude that: ‘It is apparent that the cooperative sector is

present, but relatively silent and, to a certain extent, timid due to the absence

of vertical structures to articulate its interests and show its presence.’

171

That

speaks to the ongoing need for appropriate legal and policy frameworks, as

well as integration into national and regional economic and social strategies,

sectors and value chains. This also is a viable area for future business-legal

research, legal reform and legislation.

Political economy of intra-African economic development

The discussion so far has concerned law and directly relevant institutions and

has been somewhat transactional in scope. Although primarily about law, the

discussion is integrally about policy, business and governance. However, it

cannot merely be a discussion about private law and cross-border contracts,

but must also be about public laws, monopolies of political and economic

power and political legitimacy. Law is not a neutral instrumental norm, but

enshrines power relations and is an institution that incentivises path-

dependent socio-economic structures. Therefore, it is at least minimally

relevant to separately consider the role of policy and, perhaps even better, to

go further into analysing, albeit brief‌ly, the structure of power relationships

that inform policy.

Part of the context of business in any society is the nature of political

institutions and power relationships among economic actors and citizens.

Politics inf‌luences economic choices, policies and laws, as well as the

economic outcomes on a society. The regulation of the private sector, the

nature of industry competition and internationalisation of f‌irms’ activities are

170

Develtere, P; Pollet, I & Wanyama, FE (eds) (2008) Cooperating out of Poverty:

The Renaissance of the African Cooperative Movement.

171

Develtere et al xxii.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 31

inf‌luenced by government policies and actions.

172

Rodrigues emphasises that

government policies regarding economic and social development, rather

than merely rational calculations, provide an overarching basis for f‌irms’

investment decisions.

173

The recent spurt of intra-African business expansion is anchored on

supportive government policies and laws across Africa, such as economic

liberalisation

174

and encouragement of regional and national policies.

175

Therefore, progress will depend on favourable and collaborative policy

approaches. As discussed above, several commentators and scholars advocate

greater congruence among and rationalisation of the multiplicity of African

regional groups and the adoption of common or identical policies on business

activity. The tendency to pay lip service to existing regional arrangements

and to raise trade barriers to intra-African trade is counterproductive. Collier

argues that regional agreements do not contain institution-building incen-

tives; therefore, they cannot optimally aid or be depended on for quicker and

effective intra-African business and economic development.

176

Existing economic incentives for politicians and leaders appear to favour

neo-patrimonialism,

177

tenacious monopolisation of power at the national

level and hiding behind the doctrine of state sovereignty to facilitate

rent-seeking behaviour and institutions.

178

Historically, multinational com-

panies and indigenous crony capitalists variously described as ‘ethnic minor-

ity networks’

179

or ‘policy-induced big businesses’

180

have been complicit

172

Cf Rodrigues, SB (2010) Towardsa New Agenda for the Study of Business Interna-

tionalization:Integrating Markets, Institutions and Politics. Available from:

handle.net/1765/20068>; Collier, P (2006) ‘Africa: Geography and Growth’ TEN

(Fall Issue) 18–21.

173

Rodrigues.

174

Okeahalam, CC & Wood, S (2009) ‘Financing Internationalisation: A Case

Study of an African RetailTransnational Corporation’ 9(4) Journal of Economic Geogra-

phy 511–37;Ibeh, K, Wilson, J & Chizema, A (2012) ‘The Internationalization of

African Firms 1995–2011: Review and Implications’ 54(4) Thunderbird International

Business Review 411–27.

175

Cleeve, E & Ibeh, K (2012) ‘Foreign Direct Investment by Southern Multina-

tionals: The Case of African Firms’. Proceedings of the 13th IAABDAnnual Confer-

ence 196–206; Adams, K et al (2014) ‘Causes of Financial FDI Inf‌lows into Sub-

Saharan Africa (SSA): Evidence from Ghana’ 56(5) Thunderbird International Business

Review 439–59.

176

Rodrigues.

177

Eisenstadt, SN (1973) Traditional Patrimonialism and Modern Neopatrimonialism;

Budd, EN (2004) Democratization, Development, and the Patrimonial State in the Age of

Globalization.

178

Cf Chabal, P & Daloz, JP (1999) Africa Works: Disorder as Political Instrument

(African Issues Series); Erdmann, G & Engel, U (2006) ‘Neopatrimonialism Revis-

ited: Beyond a Catch-all Concept’ German Institute of Global and AreaStudies Working

Paper No. 16.

179

Collier, P(2006) ‘Africa: Geography and Growth’ TEN (Fall Issue) 18–21.

180

Schneider, BR (2009) ‘A Comparative Political Economy of Diversif‌ied Busi-

ness Groups, or How States Organize Big Business’ 16(2) Review of International

Political Economy 178–201.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201632

allies and tools. Multinationals are generally perceived to be predators rather

than tools of African despots. Collier aptly observes that: ‘There is indeed

some recent evidence that large foreign f‌irms have prof‌ited excessively from

their relations with African governments.’

181

Latter-day Asian business

expansion into Africa is perceived in a similar light.

182

The general narrative

is that Africa cannot rely on foreign f‌irms for national development or

cross-boundary expansion that can generate regional development; hence,

the hope and optimism that African multinationals may come to the rescue.

As African businesses regionalise, expansion will be led by, or increasingly

undertaken by, the ‘African ethnic minority networks’, ‘policy-induced big

business’, or, to use a neutral term, by ‘sizeable indigenous actors’.

183

Therefore, it may be more perceptive to infer that such businesses represent

rentier capitalism or ‘network capitalism’ according to Rodrigues, and

primarily benef‌it and mask the linkage with the comprador class.

184

Only

secondarily, and perhaps fortuitously, will any meaningful benef‌its accrue to

the masses, at least in the immediate or short term.

185

Corruption has been

partly responsible for, and an outcome of, institutional voids that stif‌le

opportunities for greater and more meaningful foreign direct investment and

induce the growth of ethnic minority business networks and policy-induced

big businesses.

186

The tendency is towards monopoly, super-normal prof‌it

making and ‘state capture’.

187

Rent-seeking policies mire the economy in a

cycle of ineff‌iciency and under-development. Collier suggests that the

long-term solution is to reform the African legal environment, although

admitting a quandary as to the best practical steps to adopt.

188

He thinks that

regionalism and ceding of sovereignty to pan-African institutions, along the

lines undertaken by Europe, is required, but despairs that NEPAD, the AU

and current sub-regional arrangements appear to be a long shot because of

the power-hugging disposition of the African ruling classes.

Cross-boundary expansion of business and business clusters may perhaps

offer some panacea, albeit with grim prospects for improving political

governance if a reform of the African political economy and legal environ-

ment is not simultaneously undertaken because of the predatory nature of the

181

Rodrigues, SB (2010) Towardsa New Agenda for the Study of Business International-

ization: Integrating Markets, Institutions and Politics. Availablefrom:

net/1765/20068>; Collier, P (2006) ‘Africa: Geography and Growth’ TEN (Fall

Issue) 18–21.

182

Mohan, G (2013) ‘Beyond the Enclave: Towards a Critical Political Economy

of China and Africa’44(6) Development and Change 1255–72.

183

Cleeve & Ibeh.

184

Rodrigues.

185

Cf Beekers, D & Van Gool, B (2012) ‘From Patronage to Neopatrimonialism:

Postcolonial Governance in Sub-Sahara Africa and Beyond’ African Studies Centre

WorkingPaper No. 101.

186

Beekers & VanGool 15.

187

Rodrigues.

188

Rodrigues.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 33

political elite.

189

In this regard, Rodrigue’s concept of ‘social innovation’,

190

as a means of expanding businesses in developing countries through rela-

tional networking, may offer a worthwhile conceptualisation of the practical

route to explore by internationalising SMEs in Africa.

Legal and judicial frameworks

The development of jurisprudence on human and other rights by African

regional courts has noticeably given succor to aggrieved citizens,

191

trans-

porting them beyond national courts that appear more attuned to preserving

the status quo. Supra-national judicial and legal institutions appear, therefore,

to be slowly moving the bar of governance, albeit in the narrow area of

human and other rights.

192

Alter et al

193

argue that an unwillingness by national political elites to cede

power to mount intra-regional trade barriers, the lack of enabling national

legislation to empower national courts to directly treat cases relating to

regional economic agreements, ignorance of the judicial framework of these

agreements by national judges (in regard to ECOWAS, for example) and the

lack of direct access by private traders (or suits by and against companies) to

the ECOWAS court are partly responsible for the lack of cases promoting

economic integration in ECOWAS. However, it must be noted that the

court in Pinheiro v Ghana

194

restated its jurisdiction to sanction states that fail

to implement the ECOWAS treaty obligations or the rights of community

citizens. Rudahindwa

195

argues that the new East African Economic Com-

munity and its Court of Justice, have been more successful in being assertive

and creative in exercising jurisdiction over cases related to economic

189

Cf Douma, P (1999) Poverty, Conf‌lict and Development Interventions in Sub-

Saharan Africa; see also Mbeki, M (2005) Perpetuating Poverty in Sub-Saharan Africa:

How African Political Elites Undermine Entrepreneurshipand Economic Development.

190

Rodrigues, SB (2010) Towardsa New Agenda for the Study of Business International-

ization: Integrating Markets, Institutions and Politics. Availablefrom:

net/1765/20068>; Collier, P (2006) ‘Africa: Geography and Growth’ TEN (Fall

Issue) 18–21.

191

Ebobrah, ST (2012) ‘Application of the African Charter by African Sub-

Regional Organisations: Gains, Pains and the Future’ 16(1) Law, Democracy & Devel-

opment 49–68; Possi, A (2013) ‘The EastAfrican Court of Justice: Towards Effective

Protection of Human Rights in the East African Community’ 17(1) Max Planck

Yearbookof United Nations Law Online 173–95.

192

Murungi, NL & Gallineti, J (2010) ‘The Role of Sub-Regional Courts in the

African Human Rights System’ 7(13) International Journal on Human Rights 118–43;

Sceats, S (2009) ‘Africa’s New Human Rights Court: Whistling in the Wind?’

Chatam House Brief‌ing Paper IL BP 09/01.

193

Alter, KJ, Helfer, LR & McAllister, JR (2013) ‘A New International Human

Rights Court for WestAfrica: The ECOWAS Community Court of Justice’ 107(4)

American Journal of International Law 737–79.

194

ECOWAS Community Court of Justice, Suit No. ECW/CCJ/APP/07/10,

Judgment No. ECW/CCJ/JUD/11/12, 6 July 2012.

195

Rudahindwa, JB (2015) ‘The Role of Integration through Law in Tripartite

African FTA’ ESRC Seminar Series 1st Workshop.

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201634

integration, thereby promoting a strategy of integration through law (much

like the OHADA model), a view corroborated somewhat by Gathii.

196

Arguably, therefore, this appears to be a practical method for fostering

economic integration through legal and judicial frameworks that ‘speak’ and

‘interpret’ a ‘supreme business law of the land’,

197

even if this is done in a

differentiated and incremental manner; f‌irst at sub-regional levels and

perhaps then at a regional level.

Investment treaties between African countries may serve as another

feature of protective justice for advancing the spread of intra-African

businesses. Idornigie

198

suggests that regional investment treaties could be a

useful innovation, urging ECOWAS to inaugurate a model treaty. However,

without additional, simultaneous or complementary reforms in political and

economic institutions, any positive outcomes of legal reforms are likely to be

stunted and limited.

199

Unfortunately, xenophobic tendencies still erupt

across the continent and trade barriers remain pervasive. The need for better

supra-national and national legal and judicial frameworks and institutional

reforms at sub-regional, regional and national level is obvious and further

business-legal research on this subject is required.

A summary report of what some companies consider primary institutional

challenges prior to entry into the African country where they operate is

represented in Exhibit 1 below. Exhibit 2 contains an indication of steps they

believe all African countries should take to advance investment.

Conclusion

Growth of the African private sector, including by investment, depends on

good policies, sound infrastructure, open competition, eff‌icient markets,

growth of competitive clusters and good governance; in essence, improve-

ments in the business environment and political governance.

200

Therefore,

the business environment in African countries must be radically improved to

move beyond dependence on the extractive and agrarian sector to high

value-adding industrial and services sectors in order to enhance growth and

inclusive development.

196

Gathii, J (2013) ‘Mission Creep or a Search for Relevance: The East African

Court of Justice’s Human Rights Strategy’24(2) Duke J. Comp. & Int’l L. 249–96.

197

Cf Alter, KJ (2011) ‘The Evolving International Judiciary’7 Annual Review of

Law & Social Science 11–16.

198

Idornigie, PO (2011) ‘Investment Treaty Arbitration and Emerging Markets:

Issues, Prospects and Challenges’ Third Inaugural Lecture Series, Nigerian Institute

of Advanced Legal Studies 65.

199

Cf Isanga, JM (2012) ‘Constitutive Act of the African Union, African Courts

and the Protection of Human Rights: New Dispensation’ 11 The Santa Clara J. Int’l

L. 267–302.

200

Collier, P (2000) ‘Africa’s ComparativeAdvantage’ in Jalilian, H, Tribe, M &

Weiss, J (eds) Industrial Development and Policy in Africa; Olof‌in, S (2002) ‘Trade and

Competitiveness of African Economies in the 21st Century’14(2) African Development

Review 298–321.

AGENDA FOR INTRA-AFRICAN ECONOMIC DEVELOPMENT 35

The critical importance of law as a key infrastructure and its role in shaping

behavior, practices, and institutions in order to facilitate African business

growth and development has been highlighted in this paper. A fairly detailed

review of literature was undertaken, outlining African business-legal frame-

works, enablers and impediments for intra-African economic development.

A number of hopefully practical and informed suggestions as to available

business, policy and legal options, as well as the challenges and opportunities

they present have been delimited in the paper. Some specif‌ic areas and

opportunities for further research as to how to improve legal and regulatory

frameworks in order to improve the business environment have also been

identif‌ied. There is justif‌ied hope for optimism that Africa-to-Africa

approaches can begin to play a more important and pivotal role in the quest

for African development and that the agenda for future research listed here

will, hopefully, be useful.

Exhibit 1

JOURNAL OF COMPARATIVE LAW IN AFRICA VOL. 3, NO. 1, 201636

Exhibit 2

The data in Exhibits 1 and 2 were generated from responses to an online

survey (Survey Monkey) of African and global multinational companies with

operations in the West, East and southernAfrican regions. It was forwarded

by email link to sixty-four prospective respondents, from whom only

fourteen responses were eventually received. The low response rate of 22% is

probably owed to the survey’s length (illustrated by the fact that data

presented here relate to questions 21 and 23).

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Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
Find What You Need, Quickly

Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
Over 2 million registered users

Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.

Subscribers are able to see a visualisation of a case and its relationships to other cases. An alternative to lists of cases, the Precedent Map makes it easier to establish which ones may be of most relevance to your research and prioritise further reading. You also get a useful overview of how the case was received.

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Why Sign-up to vLex?

Over 100 Countries

Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
Thousands of Data Sources

Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
Find What You Need, Quickly

Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
Over 2 million registered users

Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.

Subscribers are able to see the list of results connected to your document through the topics and citations Vincent found.

You can sign up for a trial and make the most of our service including these benefits.

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Why Sign-up to vLex?

Over 100 Countries

Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
Thousands of Data Sources

Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
Find What You Need, Quickly

Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
Over 2 million registered users

Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.

Agenda for Intra-African Economic Development: Business-Legal Frameworks, Enablers and Impediments

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Over 100 Countries

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Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users

You can sign up for a trial and make the most of our service including these benefits.

Why Sign-up to vLex?

Over 100 Countries

Thousands of Data Sources

Find What You Need, Quickly

Over 2 million registered users