An Exploratory Study on the Possibility of Harmonizing Investment Protection Regimes within the OHADA Zone

With its large population and natural resources, Africa needs investors who can sustain its development. At the same time, foreign investors expect returns on their investments. In this regard, they have shown a preference for countries with more legal stability regardless of the incentives provided, be it tax incentives or access to low-cost labourers. However, there are divergent legal cultures and systems in Africa. French-speaking African countries have inherited the Civil law system, while English speaking African countries have inherited the Common law system. Furthermore, customary law has played an essential role in the normative regime of countries. This legal pluralism has been detrimental to foreign investors, especially transnational companies. The likelihood of facing legal and judicial uncertainties remains high and costly. It is in light of these concerns that the Organization for the Harmonisation of Business Law in Africa (OHADA) was established in 1993.

The Uniform Acts enacted for implementing the OHADA Treaty focus on reducing the significant differences in member states' business legislation and aim to address negative perceptions about OHADA countries. Notwithstanding, the key question is whether OHADA's harmonisation should be deepened to extend to the promotion and protection of foreign investment? This paper aims to assess the existing tools provided by OHADA Uniform Acts for protecting the foreign investor and the possibility of harmonising investment law within the OHADA space. As a preliminary conclusion, this paper argues that the rationale behind adopting the OHADA Uniform Acts is to provide a proper harmonisation tool to promote and not to protect investments. Currently, investments are protected by special legal regimes at national, bilateral, regional and continental levels. BITs and the investment codes of OHADA states are in a state of convergence. Furthermore, the Pan African Investment Code (PAIC), to a certain degree converges with the standards found in OHADA member states BITs.