By Mouhamed Kebe, Senior Partner at Geni & Kebe SCP
Introduction
On October 1993, 16 African states signed a treaty known as the ‘Organisation pour l'Harmonisation du Droit des Affaires en Afrique’ (Organisation for the Harmonization of Business Law in Africa, the ‘OHADA Treaty’).
Two years later, in September 1995, it entered into force and provided its members1 with a uniform business law, a regional arbitration and dispute resolution institution for the settlement of contractual disputes, and a regional institute for the training and specialization of magistrates and staff of the judiciary.
Fifteen years later, an overview of OHADA and its effects on regional integration and investment reveals that what was announced an adventure has turned out a considerable success.
The Impact of OHADA on Integration and Investment
The core purpose of OHADA is to promote economic development and integration between its members, as well as to ensure a secure legal and judicial environment in Africa. The OHADA treaty represents a single framework unlike any in other in the world.
While in the Americas, Asia and Europe, similar schemes like NAFTA, MERCOSUR, ASEAN, and the EU exist, none of these systems has reached the level of harmonisation achieved by the OHADA members. Although these regional systems have set up very dynamic mechanisms in the fields of trade and economy, so far none have harmonised their laws: even the EU, which is perhaps the most progressive, with a single currency, has not.
This first reason explains why OHADA gives rise to a deep interest in the Americas, Asia and in Europe, the regions where these other systems are being tested. The second reason lies in the fact that OHADA has undoubtedly improved integration between and investment in its members.
In fact, OHADA has helped in boosting investment between members, as well as from outside, by setting up a uniform and harmonised system of business law implemented in 16 African states.
It is clear that in the current context of globalisation, Africa, with its ample natural resources, is attracting more and more public and private foreign investors. In addition, the current performance of many African countries, and the considerable resilience they have demonstrated during the recession, act as a catalyst for foreign investment.
In such a context, investors who plan to set up crossborder projects are interested in a system like that of OHADA, with an enhanced dispute resolution mechanism and harmonised business rules.
How can OHADA unite Africa’s business law systems?
Despite this success, OHADA still has a big hill to climb. The present dominance of the French language and of civil law within OHADA is expected to change over time given the pan- African dimension of OHADA and the fact that many African rulers acknowledge the positive impact it would have in the process of economic integration and in improving investment in the continent.
The relationship between African states and the other regions of the world is taking a new direction, based on a model of ‘trade, not aid’. The boldest illustration of this new tendency is the Cotonou Agreement, signed in 2000, which gives priority to bankable investment projects handled by private companies, focusing on sectors like industry and services. Institutions like European investment banks and other similar bodies are more comfortable with regional projects where there are uniform rules.
This explains why Ghana, known for being at the forefront of the fight for African integration, established in 2001 a National Committee on OHADA, on the initiative of the former Minister of Justice Akufo-Addo, to investigate how OHADA can act as a glue to unite common and civil law systems in Africa.
The members of the Economic Community Of West African States (ECOWAS) have recently adopted a directive on the harmonisation of guiding principles and policies in the mining sector, and the process to implement it is currently ongoing. Given that ECOWAS is composed of Anglophone, Francophone and Lusophone countries, this experiment in the mining sector can be a new starting point to widen OHADA and build a new bridge between common law and civil law systems in the African continent.