Africa is seen as one of the best investment destinations as the continent continues to attract investors from other parts of the world.
One of the sectors that have attracted massive investment is the power and oil sector due to the important role they play in the running of the economy.
With the influx of investors into the continent, one thing that African governments should be mindful of is the possibility of litigation between government and investors.
Sadly, African nations have not paid attention to building the capacity of lawyers working in various government institutions to be able to help in drafting contractual agreements and also to defend or advise the country in an event of a dispute.
According to a report by Bettina Muller and Cecilia Olivet at Trans National Institute(tni.org), an international research and advocacy institute, by the end of August 2019, African states were hit by a total of 106 known investment treaty arbitration claims. The figure represents 11 per cent of all known investor-state disputes worldwide.
The report noted that African states were the main losers in the investment arbitration cases.
The African continent, which had been struggling to develop, lost a total of US$ 55.5 billion as claimed by investors since 1993.
The claimant includes power and oil and gas investors.
The report cited European investors as those who initiated the majority of the lawsuit against African countries, accounting for 70 per cent of all cases
Speaking to an international commercial lawyer and Queens Counsel, Khawar Qureshi, who has been in practice for 30 years and has acted for and against around 80 States, including many African States such as Zambia, Uganda, Ghana, Botswana, Kenya throughout his career, he proposed solutions to enable African governments to prevent or deal more effectively with disputes between them and investors.
He suggested that the first thing African states should do when signing contract with foreign investors is to ensure due diligence.
” I make no criticism of any Government in particular. Nevertheless when any party enters into a contract, it must ensure due diligence is undertaken. Is the contract commercially necessary and viable? Has it been drafted to provide reasonable protections or is it one sided? The contract has to be reviewed and drafted with expertise and when a dispute arises you must make sure it is handled by knowledgeable professionals.
“If a dispute is about to occur, make sure you have the best legal advice available,” he added.
Khawar Qureshi QC further suggested capacity building for African lawyers for them to be aware of and able to deal with emerging issues.
He noted that capacity building for lawyers who handle government contracts and disputes can be more effective, saying: “In my international practice as a Queens Counsel, I ensure that when I work for a government, I help in capacity building by training government lawyers.”
Khawar Qureshi QC was instructed to advise the Government of Ghana after the GPGC arbitral award was handed down.
Click on the link below to watch the interview: