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Top 5 Legal Regimes for Business in Africa

Centurion Law Group compiles an extensive list of the Top 5 Legal Regimes for Doing Business in Africa.

As 2018 launches on improved commodity prices and a sense of overall market stability, Centurion Law Group has compiled an extensive list of the Top 5 Legal Regimes for Doing Business in Africa. The attorneys looked at several factors in making the determination, including:

• Market size and economic diversification
• Ease of registration of businesses and foreign investment
• Local content and transfer of technology requirements
• Capital flow and repatriation
• Financial sector stability
• Telecommunication
• Taxation laws and tax compliance complexity
• Judicial system
• Subscription to international conventions
• Legal framework for investment incentives
• Public private partnership
• Land acquisition system
• Sanctity of contracts, stabilisation and expropriation
• Intellectual property rights protection
• Labour laws and market
• Environmental regulations
• International rankings on Ease of Doing Business (World Bank)

Although ranked highly on the World Bank’s Ease of Doing Business index, tourism-heavy countries like Mauritius and the Seychelles have been excluded, as the focus is on the real sector investment environment as well as market size. Rwanda has, however, been included due to its strategic location and access to the East African market, among other factors.

Based on the above criteria, South Africa, Nigeria, Cote d’Ivoire, Senegal and Rwanda have been selected as the top five destinations for business in Africa.

In arriving at the top legal regimes for business in Africa, investor behaviour is also considered. Many decisions for market entry in Africa are made mainly on the basis of market size and mineral deposits. Some decision-makers will also consider market maturity and the level of local infrastructure development. Also, in recognition of the fact that, similar to the Asian business culture, African business is driven more by relationships and less by transactions, many choose to rely on certain business links they have already established in a certain market prior to entry. Research shows that African states are also coming to the realisation that reducing of bureaucracy, streamlining of the legal framework, addressing corruption and stabilizing the economy are more likely to attract FDI than tax holidays and other fiscal incentives.

South Africa

South Africa offers investors one of the most diverse economies on the African continent, including a stable, developed and diverse financial sector — one of the major obstacles to development in many other countries. The backbone of the sector is the South African Reserve Bank, which regulates the sector and also participates in a wide range of international organizations, such as the Financial Stability Board and the G-20 Finance Ministers and Central Bank Governors. The country’s Financial Services Board supervises the Johannesburg Stock Exchange, which is also one of the most robust on the continent. The financial sector is largely considered one of the most sophisticated of the emerging markets. Non-residents of South Africa are also able to transfer capital in and out of South Africa, though such transactions must be reported.

Ease of investment and entry into the Southern Africa Development Community is also a significant advantage for South Africa. South Africa is a member of the Southern Africa Customs Union (SACU) and the Southern Africa Development Community (SADC). SACU has a common external tariff and tariff-free trade between its five members, offering a regional advantage on investment.

The country offers investors ease of doing business, including a one-stop in the Department of Trade and Industry. The one-stop shop, which also has regional offices and an online portal, is aimed at offering investors assistance in entering the country. There are no onerous local content requirements. However, there is a profound sensitivity about the inclusion of historically disadvantaged South Africans in industry. Additionally, the country has a strong telecommunications and infrastructure network.

The independence of the judiciary is widely lauded, and has been demonstrated in the past years through rulings against the sitting President. Arbitration in South Africa follows the Arbitration Act of 1965, which does not distinguish between domestic and international arbitration and is not based on UNCITRAL model law.

South Africa’s growth strength lies in its uptake of technology, efficient financial markets and strong institutions.


Nigeria is the largest economy and most populous country in Africa with an estimated population of more than 180 million and an estimated gross domestic product of up to USD 510 billion in 2013 (currently about USD405 Billion). Having surpassed South Africa in 2014 as the largest economy on the continent after it overhauled its gross domestic product data for the first time in two decades, Nigeria’s recent economic recession slowed down her growth. The foregoing fact notwithstanding, Nigeria remains one of the most attractive business destinations in Africa for the foreseeable future.

Apart from the fact that it offers a large and active market for business, Nigeria ranks highly as a business destination in Africa due to the crystallisation of its legal, regulatory and commercial framework and openness to foreign investment. The fact that the corporate tax rate in Nigeria is significantly lower than that of similar markets coupled with a broad legal framework for incentives makes it particularly attractive for return on investment. Its political climate, although chequered, is largely predictable and the drawbacks to investment are common knowledge and are very tractable, especially where suitable local partners are identified. Nigeria has a non-discriminatory approach to FDI and investors from all over the globe undertake projects in Nigeria.

Bureaucracy, which was previously a major drawback to business activity has been tackled in recent years. Its on-ground ease of doing business has also significantly improved in the last three years. Nigeria has recently overhauled its business interface platforms to ease business compliance at major interface points such as the tax offices, land registries and the Companies Affairs Commission. Several Nigerian states have reformed their land registries. This means that transferring land in Nigeria is becoming far quicker and more secure. Lagos State led the way in reforming its land registry, introducing a computerised document management system for land titles and transfers in 2006. Searches at the Lagos Land Registry can now be completed in less than an hour.

Nigeria has also implemented an Executive Order to mitigate issues with bureaucracy, requiring every Ministry, Department and Agency of the federal government to publish a list of requirements to acquire permits, licenses, etc. The Executive Order provides for default approvals, i.e., where the relevant agency or official fails to communicate approval or rejection of an application within the time stipulated in the published list, all applications for business registrations, certification, waivers, licenses or permits not concluded within the stipulated timeline shall be deemed approved and granted.

Nigeria boasts an advanced financial sector with project funding available through local financial institutions to a very high degree. It has a well-educated work force with technical skills that can compete all over the world. Adoption of technology for business is also significantly higher in Nigeria than a majority of African states.

The Nigerian legal and regulatory framework guarantees unfettered access to the flow of investment capital. Other business support facilities such as telecommunication and air transport hubs are advanced and Nigeria’s infrastructure index is improving steadily.

Nigeria is in the process of overhauling the legal framework for its oil and gas sector, which is its mainstay economically. Renewed efforts at boosting gas production, infrastructure and distribution as separate from crude oil development, opportunities in power production amongst others shows that there is significant potential for exponential growth and in view of the size of the Nigerian market, it will remain one of the top business destinations for the foreseeable future.

Cote d’Ivoire


Côte d’Ivoire is the largest economy in French-speaking West Africa and the third largest in West Africa after Nigeria and Ghana. Located in the inter-tropical coastal zone of West Africa, the Republic of Côte d’Ivoire has a relatively young population of about 23 million inhabitants. According to the International Monetary Fund (IMF), Côte d’Ivoire’s economic performance remains strong despite external shocks and domestic events. The IMF also projects growth at about 7 percent per year in 2018–19 and inflation is expected to remain subdued. The Country is best known as the world’s leading cocoa exporter, Cote d’Ivoire also exports coffee, palm oil, cotton, and rubber, among others making it the 4thlargest exporter of goods in sub-Saharan Africa behind South Africa, Nigeria, and Angola. Oil has become one of Cote d’Ivoire’s leading exports, and the development of new gold mines in recent years in the central and northern areas of the country has also contributed to national economic growth.

One of the main pillars for investment promotion is the legal framework of the country, which has experienced a constitutional transformation in 2016 pointing to better democratic conditions and therefore a more stable political climate. With the onset of political stability in Côte d’Ivoire, international institutions have relocated their headquarters back to the country in recent years. The African Development Bank (AfDB) returned to Abidjan in 2014 from Tunisia’s capital, Tunis, where it had been headquartered throughout Côte d’Ivoire’s period of instability.

Côte d’Ivoire also offers investors comparatively well-developed infrastructure, boasting the second-largest port in West Africa, a modernized airport and a strong national airline. The country also has a strong road system and is rapidly improving in access to electricity and power generation capacity.

The country provides investors regional opportunities as well, as it is a member of the West African Economic Monetary Union (WAEMU). The union, an eight-country currency union, does provide investors with a sound jumping off point for regional investment, including streamlined customs and the same currency.

Côte d’Ivoire has also made it easy to set up a business, creating the Investment Promotion Centre (CEPICI). The promotion centre aims to streamline the administrative processes of opening a business, as well as business expansion. The Promotion Centre has seen the processing time to open a business take as little as two or three days.



Rwanda represents a stable and predictable business environment with robust economic growth and low inflation, a stable currency and a strong commitment to private sector development as well as impeccable peace and security. Rwanda is thus the ideal place for investment. With tourism as the fastest growing sector in Rwanda, and despite almost a decade of civil war, citizens and leaders’ commitment to reform has paid off with a strong economy and healthy business climate.

The government or Rwanda maintains an investor-friendly attitude by welcoming and facilitating investments, both before and after their establishment. This awareness is reflected in several ways in the investment regime. Compared to other African states, including its East African neighbours, Burundi (36.7%), Uganda (33%), Kenya (31.9%) and Tanzania (28.6%) Rwanda stands out on anti-corruption with a 6.6% country corruption prevalence and is therefore an attractive place to conduct business.

Rwanda is an open trading economy with relatively low tariffs and few nontariff barriers. It is easy to set up a company in Rwanda, open a branch for your foreign company, open private and business bank accounts, rent or buy an office or a house and bring capital in or out of the country. Rwanda ranks 56 out of 190 on the World Bank Ease of Doing Business ranking and 2nd in Africa. Rwanda was also rated the most competitive place to do business in East Africa and 3rd in Africa.

Rwanda is a member of the East African Community since the year 2007. The East African Community (EAC) is an intergovernmental organisation comprising the five east African countries Burundi, Kenya, Rwanda, Tanzania, and Uganda. The key aspects of the customs union include a Common External Tariff (CET) on imports from third countries, duty-free trade between the member states, and common customs procedures. The conducive business and tourism environment of Rwanda represents a strategic launching pad to access the EAC, which is one of the pillars of the African economic community. Although Rwanda’s small market size and landlocked position is widely viewed as a downside, Rwanda is a smart and safe gateway to both the East African Community trade to the east, and the Democratic Republic of the Congo (DRC) with vast untapped market opportunities to the west


Senegal is consistently ranked as one of the top economies in Africa, and is currently listed as one of the top three-growing as well. The country boasts a stable political environment, sound infrastructure and a strategic location in West Africa. Similar to Côte d’Ivoire, Senegal is a member of the West African Economic Monetary Union (WAEMU). The eight-country currency union certainly provides investors key advantages for operating in West Africa, including streamlined customs and the same currency. The union (established in 1994 to promote economic integration among countries that use the same CFA franc currency) is symbolically led by Senegal, a country that rises above the rest for its stability, specifically after Senegal elected a new president in 2012.

The Government of Senegal has further prioritised efforts to improve the business climate. Thanks to public expenditure, Senegal has made significant progress in infrastructure development, including the transport, electricity, and water sectors. In fact, the country has aggressively pursued public-private partnerships for completing infrastructure projects. The country’s Act Build Operate Transfer law, passed in 2004, provides a regulatory framework for such transactions.

Senegal is ranked by the World Bank’s Doing Business report as one of the world’s top business reformers, and consistently ranks in the top ten business environment improvers. The minimum capital required to start a business as well as stamp duties on business start-ups were abolished in 2015.

Some investors believe that Senegal can position itself as a centre for Islamic finance, as a country with an approximate 95 percent Muslim population. About 54 percent of West Africa’s population is Muslim. Senegal also offers a simple system for repatriation of capital.

Finally, the country has strong ambitions in the oil and gas sector and recent mega discoveries off the country’s coast point to a dynamic future in the oil and gas sector. The Mauritania-Senegal-Guinea Bissau Basin is now considered a key entry point for oil and gas, and key development projects are slated to move ahead in the coming years.

Top Contenders and Regional Cooperation


Countries like Ghana, Ethiopia, Tanzania and South Sudan, despite their remarkable growth and investment potential, have been marginally excluded from the top 5 due to restrictions to foreign investment in some sectors, questions on stability, and other country-specific factors. Ghana, for example, is one of the most stable democracies on the continent and provides investors with a peaceful and predictable operating environment, serving as a key point of entry into West Africa. Ghana, however, currently faces a significant fiscal overhang, which has a negative effect on its economy for the short to medium term, according to Deloitte. Tanzania, though it has strong macroeconomic indicates compared to Southern and East Africa, also did not make the top five due to recent questions about the business climate and the stability of contracts. Although Kenya boasts one of the world’s fastest-growing economies and is on the way to becoming an economic and technology powerhouse in Africa, it was excluded due to the current political climate, with political uncertainty and unrest driving instability.

Others with significant promise, including South Sudan and Botswana rank lower than the top five due to the fact that their economies are comparatively less diversified and there are regional destinations with better infrastructure and other advantages. Botswana, despite being an incredibly open market to foreign investment, is often overshowed by the economic might of neighbouring South Africa. South Sudan, though it offers a new business landscape with a very investor-friendly regulatory framework and aggressive pursuit of investment, poses a stability risk to investors and has a significant anti-corruption gap to fill.

When it comes to doing business in Africa, it’s neither one country nor 54 countries. Rather investors have to take a regional approach. A quote from’s Insider’s Guide to Business Travel aptly describes this scenario- “Many business travellers to West Africa find Accra to be close enough to access Nigeria’s large market, but prefer the quality of life that Accra affords visitors.” Therefore, neighbouring states with similar investment potentials will be hedged by each other, in terms of attracting FDI, based on factors such as a more stable legal and regulatory framework, political climate and superior business support infrastructure. The existence of regional integration constructs such as West African Economic and Monetary Union (WAEMU), the Southern African Development Community (SADC), the Economic and Monetary Union of Central Africa (CEMAC) and the East African Community (EAC) means that there is also significant access to regional markets once a business destination choice has been made and therefore every point counts for the host countries in attracting significant FDI.