Doing Business in Sub-Saharan Africa: A Legal Revolution

Article excerpt

"Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has." This comment by the anthropologist Margaret Mead could aptly be borrowed to describe a group of 16 u-Saharan African countries that are engaged in a legal reform that is unprecedented anywhere in the world. The reform, which is drastically changing the business environment in Western Africa,based on uniform business laws for the whole group of countries. A series-of t laws have come into force during 1998, acting as a major step towar mic integration.

The name to remember in connection with this sweepling legal change is OHADA, which stands for the Organization for Harmonization in Africa of Business Law (l'Organisation pour l'harmonisation en Afrique du droit des affaires). At present, the 16 OHADA countries are Benin, Burkina Faso, Cameroon, Central African Republic, Chad, the Comoros, the Congo, Cote d'Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Mali, the Niger, Senegal, and Togo. Most of these countries are French-speaking except Equatorial Guinea (Spanish-speaking) and Guinea (Portuguese-speaking). Cameroon is bilingual (English-French). Other countries can join OHADA.

The same company law for 16 countries

If we try to describe in one sentence what OHADA means to people doing business in West Africa, we could say that OHADA provides 16 states with identical business laws; commercial and company laws; bankruptcy procedures; banking, accounting, labour, sales and transport laws; and a uniform system to interpret these laws! This, for example, has not yet been achieved in the European Union. In France, Germany or the United Kingdom different rules apply for creating a company.

In the 16 OHADA countries, the same rules apply to any company that undertakes a commercial activity in the territory of a member state. In practical terms, should a German company wish to create a joint-venture company, let us say, in Togo, the same process and statutes can be applied to the 15 other OHADA countries under the same ground rules. Before, differing rules would have had to be taken into account in each of these countries.

More change in the past five years than in the last forty

OHADA was created to respond to general concern about legal security in commercial transactions, access to legal texts governing a business venture, and lack of confidence in the judicial system. …