Lions on the move, excitement builds – May 2013
Ears prick up, anticipation rises, something is about to happen, heart beats quicken, pulses race. This is Africa, these are top predators and they are hungry. Naturally lazy by nature, sleeping most of the day, when they stir and start to move excitement stirs . . .
But sorry, I need to stop there and tell you I am actually referring to the title of a McKinsey report on Africa’s potential and the staggering boom that much of Africa is enjoying.
A number of facts highlight this:
- China imports $23bn of Angola’s oil, and 60% of SA’s iron ore;
- A demographic bonus is when your population peaks in the highly productive 50-60-year-olds. In Japan it was 1964 and 1992. In China it will be 2015. In Africa it will be 2030-2050;
- Africa now has 616 million mobile phones. Think of the possibilities;
- Unlike the popular misconception, two-thirds of its growth is not resource-based;
- Africa’s private capital flows are up strongly since 2003 – passing aid and remittances – and investments in the continent have the highest rate of return of any developing country;
- 60% of the world’s potentially available cropland is in sub-Saharan Africa. A huge potential for better farming, new crops and agricultural investment;
- According to McKinsey returns are going up in Africa, and risks down. Music to investors’ ears;
- Africa has as many cities of over 1-million as Europe, and greater growth in household consumption than India or China;
- By 2020 more than half of all Africa’s households will have discretionary spending power;
- Africa’s likely annual growth sectors are: resources at only 2%, consumer goods at 4% and infrastructure biggest at 9%;and
- Africa’s workforce will be the biggest on the planet in 2040, bigger than China or India.
There are major differences of legal approach and jurisprudence between the legal systems of former English, French, Belgian, German and Portuguese colonies as well as the Arabic speaking North and Roman Dutch common law in South Africa.
These can bedevil any enterprise or investor’s plans. It creates uncertainty and some risk.
But many African governments recognise that such challenges may inhibit progress and have ambitious projects to formalise uniform rules of trade, international disputes and investment.
The law in Africa is primarily based on models from the colonial era, married to traditional African values and evolving all the time.
As the Lions of Africa are stirred to move, so too have the lawyers of Africa been stirred to move by these economic and business developments.
For the past twenty years leading law firms in key African jurisdictions have joined in membership within LEX Africa, the longest established and largest network of African lawyers on the continent. As the African boom picks up pace, so does the need for experienced and skilled legal professionals who know what it takes to reduce risk and build certainty in the challenging business markets of Africa. LEX Africa provides such a network – our lawyers are on the move and our expertise and experience in the complex corporate and commercial world of African business, as well as our belief in a better life for all Africans make us truly Lawyers for Africa.
[Greg Nott is a director of South African LEX Africa member Werksmansand heads its African Practice Group.]
