Good Governance Key to Doing Business in Africa, Key Changes Proposed for Foreign Investment in Ghana & More on The Impact of Tax Reforms in Nigeria

Afriwise Insights

Good Governance Key to Doing Business in Africa

This article was written for Business Day by Vishala Panday , Head of Compliance Services at Afriwise

It’s no secret that Africa is at the forefront of expansion and investment for large global multinationals and small businesses alike.

Home to some of the globe’s fastest-growing economies with a burgeoning population of more than 1 billion people, the continent’s rapid urbanisation and digitisation makes for an attractive business destination. Despite this, Sub-Saharan Africa demonstrated an economic growth rate of just 3.3% in 2023, with the perception of corruption in Africa continuing to diminish the potential that the continent has.

According to Transparency International’s 2023 Corruption Perceptions Index (CPI), an index that ranks 180 countries and territories by their perceived levels of public sector corruption, Africa still faces significant challenges in combating corruption. Measured on a scale of 0 (highly corrupt) to 100 (very clean), 90% of countries in Sub-Saharan Africa scored below 50. SA garnered a total of 41/100 while Kenya scored 31/100; the Democratic Republic of the Congo and Nigeria reflected some of the lowest scores on the CPI, scoring 20/100 and 25/100 respectively. The culprits of corruption are public sector underfunding and mismanagement, extortion, political interference, bribery and abuse of power.

As corruption is inextricably woven into the narrative of doing business in Africa, an uncompromising commitment to good governance and compliance is a business imperative.

Rules of Engagement:

Compliance is a demonstration of commitment to one’s own values of honesty, integrity and fairness, including respect for the value chain and the broader environment in which one intends to operate. Together with the global endorsement of formal anti-corruption and anti-money laundering compliance programmes where businesses are expected to proactively demonstrate that they have procedures in place to prevent bribery and corruption, understanding the rules of engagement not only aids in managing risks specific to corruption, but is also vital for entering a new market.

However, constructing a framework for compliance is easier said than done when the continent is governed by an increasingly complex ecosystem of regulations. Africa consists of 54 countries, each bound by different social, political and economic dynamics with their own unique policies and legislation, meaning that potentially hundreds of rules and laws must be considered just to fulfil basic business requirements.

According to Thomson Reuters’ 2023 Cost of Compliance Survey, the extent and pace of regulatory developments translated into about 234 daily alerts on regulatory updates. When considering that laws across the African continent are not standardised, not consistent and often documented in different languages and formats, the sheer volume and variability of information available makes the regulatory landscape incredibly difficult to navigate.

African businesses have relied on their own networks to fill in the gaps, but access to business intelligence on a grassroots level is not something that is easily afforded to organisations penetrating the African market from different continents.

"Businesses that enter Africa with the desire to comply and play by the rules set a precedent for sustainable business and commercial practices and set the tone for an ethical and compliant culture being tangibly experienced across Africa."

The access to legal intelligence and compliance solutions seeks to build that culture of ethics and compliance one company at a time, while enabling ease of doing business in African markets and, ultimately, making Africa a more attractive destination for future investment

Selected Articles

Ghana - Templars

Foreign Investment in Ghana: Key Changes Proposed Under the GIPC Amendment Bill, 2023

The Ghana Investment Promotion Centre Act, 2013 (GIPC Act), which was enacted on 26th August 2013, remains a key legislation and regulatory consideration for foreign individuals or entities entering the Ghanaian market. Among others, the GIPC Act establishes the Ghana Investment Promotion Centre to facilitate interactions between companies with foreign shareholding and the relevant Ministries, Departments and Agencies. The Parliament of Ghana is however currently considering significant amendments of the GIPC Act and an overhaul of the regulatory framework affecting companies with foreign shareholding. Continue reading

Mauritius - Orison Legal

Financial Crimes Commission Act: Moving the Game Forward for Mauritius?

On the back of joining top-tier jurisdictions that are ‘compliant’ or ‘largely compliant’ with all the 40 FATF Recommendations, the Parliament has recently voted in favour of a new Financial Crimes Commission Act (FCCA). The FCCA, which represents a significant step in the jurisdiction’s fight against financial crimes, received presidential assent on 21 December 2023. The FCCA is however not yet in force as of date, awaiting proclamation by the Parliament. Continue reading

Nigeria - Pavestones

Tax Regulations in Nigeria: Understanding the Impact of Recent Reforms

There is a current shift in the tax administration system in Nigeria which is observed in the promulgation and reform of existing regulations in recent months. Some of these reforms are aimed at enhancing revenue generation, improving compliance, and boosting economic growth, especially within pioneer sectors of the economy. This newsletter analyses some of these changes and their impact on Nigeria’s tax administration. Continue reading

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by Africa Risk Consulting (ARC)

Zambia

International Monetary Fund (IMF)?trims Zambia’s economic outlook for the second time this year to 1.2% from 2.3%, a 25-year low, due to a worse-than-anticipated impact from a record drought that the lender warns will stunt growth.

Tanzania

The?International Monetary Fund (IMF)?reaches a staff-level agreement with Tanzania on a review that will make about $265.8m available to the country.

Senegal

Government unveils a 25-year development plan focused on economic sovereignty, promising to increase the average individual income by 50% in five years and decreasing debt and the budget deficit.

Learn more about ARC

On The Horizon: A 2025 African GC Perspectives

ACGC and Afriwise have launched a pivotal research initiative focused on General Counsels (GCs) and in-house counsel in corporate and public sector entities operating across Africa. As key research partners, we are conducting a study to explore the challenges, disruptors, and opportunities shaping the legal landscape for GCs today and in the future.

Your participation in this study is essential to capturing the realities and priorities of GCs working on the continent. By sharing your insights, you will be helping to map out African perspectives, ensuring that the voice of the legal community is heard and included in shaping the future of the profession.

All data collected will be fully anonymized, but your input will contribute to a groundbreaking report that will define the outlook for GCs across Africa by 2025. Be part of this important conversation and help shape the future of legal practice in Africa.

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