‘Do we believe in Africa?’

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As we reported in our dispute resolution Insight ‘Clause and effect’ last year, Africa has become a disputes hotspot. With a fall in commodities prices leading to abandoned projects, disputes work is becoming even more plentiful.

Discussing dispute resolution in a developing continent comprising 54 disparate jurisdictions can lead to huge generalisations, but when it comes to arbitration there seems to be a case for a pan-African focus. The UNCITRAL Model Law on International Commercial Arbitration has been implemented in a number of African countries, while the Organisation for the Harmonization of Business Law in Africa (OHADA) – covering 17 states in west and central Africa – has created a legal community with unified arbitration legislation and a common arbitration court. There has also been a proliferation of arbitration institutions throughout Africa. However, many of these institutions remain untested and do not have the support of the court system. Continue reading “‘Do we believe in Africa?’”

A safe bet – charting the rise of private equity in Africa

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Africa’s economic transformation has made it a key target for globe-trotting private equity houses. Can the continent pay out for the lengthening queue of investors?

For the private equity (PE) community, where risk and return are uneasy bedfellows, Africa represents less of a gamble. Given the continent’s increasing political stability and steady economic growth, the stakes are becoming stacked progressively in the sponsors’ favour. Not so long ago, investors’ bets were as safe as buying a handful of lottery tickets.

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Constructing continents – the clients and advisers targeting Africa’s booming infra market

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In August this year, President Obama hosted the largest US-Africa leaders’ summit ever, with the heads of nearly every African nation gathering in Washington DC. As well as working on governance and leadership issues, Obama talked to a business forum hosted in the Mandarin Oriental, with 90 US firms and over 100 major African companies attending, in an attempt to broker deals and build relationships across the Atlantic.

The summit came after 18 months that have seen increasing numbers of US institutions committing money to the continent and stoking opportunities for law firms. But the US is late to the game with Asian, Middle Eastern and European players having an established presence while local developers have become increasingly prominent. Continue reading “Constructing continents – the clients and advisers targeting Africa’s booming infra market”

‘We own the time’ – the Africa 2020 vision

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‘I’m standing saying that those who miss the boat now, will miss it forever. So if you want to be in Africa, think about investing,’ said Nigerian finance minister, Ngozi Okonjo-Iweala, earlier this year in a public speech.

Before most foreigners had become bullish on Africa, Stephen Jennings, founder of Renaissance Capital, who successfully bet on the opportunities in post-Soviet Russia, put it more pithily when he was quoted in 2007 as saying: ‘If Russia was a once-in-a-lifetime opportunity, sub-Saharan Africa is a second once-in-a-lifetime opportunity.’ Continue reading “‘We own the time’ – the Africa 2020 vision”

Africa: into Africa

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Recently it seems that not a week goes by without new clamour surrounding another legal market as law firms race to enter countries in Asia, Africa and Latin America. But of all the new frontiers that have been gaining favour with law firms, Africa’s focal points are the most difficult to pinpoint.

Australia’s immense popularity clearly leverages off its status as an English-speaking platform into key Asian markets, while the most popular hubs in Latin America are Brazil and Mexico – the two largest economies in the region. However Africa’s size and multiplicity of languages dictates that the continent has a plethora of regional springboards: UK firms are attracted to South Africa; Francophone firms have made Morocco their regional hub; while Lusophone players have rushed into Portuguese-speaking countries. And collaboration between those centres is far from straightforward. Continue reading “Africa: into Africa”

The right track

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Everything seems to conspire to prevent all but the most adventurous and patient of investors from entering Angola. A room at the ‘four star’ Tropico hotel, a 1970s’ block in downtown Luanda, will set you back $500 a night. Once checked in expect to pay $10 for a two-litre bottle of drinking water, $6 for a beer and $20 for a sandwich. It’s not surprising that the capital Luanda is now one of the most expensive cities in the world. Working in Angola requires not only deep pockets but also patience and preferably a bit of Portuguese. Yet investors and their lawyers remain unperturbed, lured into oil-rich Angola by double-digit growth rates and growing investment opportunities.

Angola is a country of paradoxes, a stark contrast of boom town and abject poverty. Executives at the country’s national oil company Sonangol will travel to Lisbon to meet its lawyers because working in and travelling to Angola is so difficult. Despite the difficulties, with real GDP growth rates of 21% and 13% in 2007 and 2008 respectively, and major mandates on offer, international law firms are finding there is work to do in the country. Oil is at the heart of this growth, with revenues from the sector accounting for a massive 85% of the country’s GDP. Having overtaken Saudi Arabia and Iran to become China’s biggest oil supplier, Angola is also benefiting from a stream of multi-billion-dollar Chinese investments. Among them money from China has been paved into the reconstruction of the Benguela railway, much of which was destroyed in the recent civil war.

Continue reading “The right track”