Initiatives Promoting Coherence in Investment Regulation and Supporting Investment for Africa’s Transformation

There is a growing interest among both African and foreign investors in harnessing investment opportunities in Africa. Africa’s macroeconomic policies, improved governance and regulatory environment continue to play a positive role in attracting investment, even after the end of the commodities super cycle. Notwithstanding these improved prospects, the continent often remains perceived as a risky and uncertain investment destination. This perception has impinged on its ability to realize its full investment potential. The need to continue to promote investment inflows, including foreign direct investment (FDI) and intra-African investment, in support of regional integration and structural transformation is evidenced by recent changes taking place at the continental, regional and national level to improve international trade and investment prospects.

At the continental level, there have been efforts to establish a continental market, which will support Africa’s objective of enhancing productive capacities and boosting structural transformation for sustained economic growth and development. One key initiative is the Continental Free Trade Area (CFTA), which is instrumental in creating a single continental market for goods and services, with the free movement of business persons and, in particular, investment, thus paving the way for accelerating the establishment of a continental customs union and the attainment of an African Economic Community.

The Pan-African Investment Code (PAIC) is another effort being made at the continental level to harmonize investment regulations in member states. The draft PAIC presented by the African Union Commission (AUC) was adopted by the Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning and Integration of the African Union in October 2017 as a non-binding guiding instrument on investment policy. The same Committee also requested the AUC to submit the draft PAIC to other STCs, including the one on Trade, Industry and Minerals, as it is involved in the CFTA negotiations. [1] The ECA, in partnership with other institutions, has been supporting policymakers and other stakeholders by organizing panel discussions during major events, such as the 2016 Africa Trade Week, the AU-ECA Conference of Ministers in March 2017 and the Annual High-Level International Investment Agreements Conference in October 2017 in order to ensure the alignment of the PAIC with the investment chapter of the CFTA and the potential role of the PAIC as a powerful guiding instrument in CFTA negotiations. [2]

At the regional economic level, there are ongoing initiatives to develop regulations that may support the regional member States in attracting greater investment to their subregional markets by offering uniform or harmonized investment protection and regulation. [3] Moving forward, greater coherency and consistency at the African level will also require coordination and consistency between such instruments and those being developed at the national and regional level.

At the national level, Bilateral Investment Treaties and Double Taxation Treaties have been an integral part of African policymakers’ strategy to counter the perception of risk and promote more inward FDI. The ECA continues to undertake policy research with the aim of informing the ongoing national, continental and global debates on the reform of investment and tax regimes and to provide evidence-based information to policymakers on issues relevant in improving the investment prospects of African Member States [4]. Furthermore, in partnership with national and international institutions, the ECA continues to support member states by developing and launching online investment guides called iGuides as important tools to provide in a centralized manner useful information, on a specific country’s investment regulations, requirements and other information relevant to investors [5].



[1] Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration of the African Union, Report of the Meeting of Ministers, Eco/STC/MAEPI/MIN/Rpt, (26-27 October 2017 in Addis Ababa); Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration of the African Union. Draft Report of the Meeting of Experts, Eco/STC/MAEP/EXP/Rpt (23-25 October 2017 in Addis Ababa)

[2] The African Trade Week and the Meeting of the African Ministers of Trade were held concurrently at the Africa Union Commission between 28 and 30 November 2016 in Addis Ababa, Ethiopia. On the occasion of the 10th Joint Annual Meetings of the African Union Specialized Technical Committee on Finance, Planning, and Integration and the ECA Conference of African Ministers of Finance, Planning and Economic Development, a side event entitled “Aligning the Pan-African investment code with the investment chapter of the CFTA”, was held on 26 March 2017 in Dakar, Senegal. The Annual High-Level International Investment Agreements Conference was hosted in October 2017 in Geneva, Switzerland, by the United Nations Conference on Trade and Development. A special lunch event entitled “The Pan African Investment Code (PAIC) and the investment chapter of the Continental Free Trade Area (CFTA): Opportunities for rationalizing investment regulation” was organized by ECA on 10 October 2017 during that Conference.

[3] Initiatives at the regional economic communities include the Protocol on Finance and Investment of the Southern African Development Community (SADC), the Investment Agreement for the COMESA Common Investment Area, the East African Community Model Investment Code and the Supplementary ACT A/SA.3/12/08 Adopting Community Rules on Investment and the Modality for their Implementation with ECOWAS.  

[4] Economic Commission for Africa, Investment Policies and Bilateral Investment Treaties in Africa: Implication for Regional Integration, (Addis Ababa, 2016)

 Economic Commission for Africa, Linkages between Double Taxation Treaties and Bilateral Investment Treaties, (Addis Ababa, 2018)

 Economic Commission for Africa, Drivers for boosting intra-African FDI flows towards Africa's transformation, (Addis Ababa, 2018)

[5] The iGuides have been developed and will soon be launched for Malawi, Nigeria, Republic of Congo and Zambia. The list of iGuides are available under the following link