An event hosted by leading international law firm Clifford Chance, which brought together members of African law firms and representatives of African and international corporations and financial institutions, has highlighted the growing importance of issues such as merger control and competition enforcement, risk and reputation management, and the role of Islamic financing as an alternative source of funding across the continent.
With many African governments recognising the value of competition as a catalyst for economic development, merger control and competition law is expected to play an increasingly important role on the continent. Whilst regional and national merger control regimes in Africa continue to develop and expand areas of enforcement, companies with business interests in the region are faced with navigating a particularly complex path. Recognising the need for a strategy which actively anticipates and manages competition issues, particularly in an M&A context, can be the difference between success and failure for a transaction.
African markets are increasingly open for business and despite perpetuating concerns about enhanced risk, for the most part; Africa faces the same challenges as other continents.
Experts participating in a panel discussion examining how local and international investors in Africa are addressing risk agreed that Africa’s diversity and complex legal and business framework creates the need for flexibility in any successful business strategy. There was also a consensus among representatives of African corporates that the risk of reputational damage is an area of increasing concern among their board members, with many implementing the same risk mitigation practices as multinationals operating in Europe and the US.
Islamic finance is a fast growing activity in world markets and whilst still very much in its infancy in Africa, Islamic banking and sukuk issuances are on the rise across the continent. With a number of African governments keen to tap into alternative financing mechanisms and access new pools of liquidity, many predict huge growth potential for Islamic finance in Africa over the next decade. With the Republic of Senegal raising CFA100 billion (approximately $200m) via its first sukuk earlier this year and more recently the Republic of South Africa raising US$500 million through its debut sukuk offering, many of the continent’s biggest economies will be watching with interest.
Building on the success of last year’s inaugural African Counsel Retreat, this year Clifford Chance partnered with its relationship firms from across the continent to invite over 50 clients with business interests in the region to join the two-day event. Hosted in London, the Retreat provided legal and commercial insights into doing business in Africa.
“We are committed to building teams of excellence across Africa with colleagues in African firms who share our focus on excellent client service. I’m delighted that so many of our clients joined us at the Retreat to reflect on the opportunities, challenges and legal and business issues faced by investors in Africa,” Edmund Boyo, co-head of Clifford Chance’s Africa practice, said.