WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
‘Law and Development’ in Africa: Paving the Way for Regional
Integration through Harmonisation of Laws
I.
INTRODUCTION
Poverty is the most important public policy issue for all countries in Africa today. One way to
confront that problem is to provide each African economy with a robust private sector that can
create the wealth that is needed to deal with poverty and significantly improve the living
conditions of the citizens. Creating a domestic environment that enables investment – both
domestic and foreign – requires, at the very least, that the economy be provided with a set of
institutional arrangements that guarantees the rule of law.1 Such a legal regime must (i)
adequately constrain state custodians (i.e., civil servants and politicians) so that they cannot act
with impunity and engage in growth-inhibiting behaviours (e.g., corruption and rent seeking);
(ii) provide mechanisms for peaceful resolution of conflict in order to enhance effective
management of ethnic and religious diversity; and (iii) create an enabling environment for
entrepreneurial activities.2 An important characteristic of an enabling environment for wealth
creation is that the law enables and not constrains entrepreneurial activities. Law is expected to
improve the security of property rights (protects the investor’s principal and the earnings
derived from that investment), minimise the risk associated with investment (especially ‘longterm investment’) and pave the way for more mutually beneficial trade and exchanges.
The rhetoric of the rule of law as a prerequisite for a sustained development has been around
for many decades.3 Literature abounds in this sense and this state of affairs gives to today’s
1
See generally Mbaku, JM. 2013. Providing a foundation for wealth creation and development in africa: the role of the
rule of law, Brooklyn Journal of International Law 38: 959; Stein, R. 2009. Rule of law: what does it mean? Minnesota
Journal of International Law 18: 293 (2009).
2
It is the activities of the entrepreneurs that will create the wealth that is needed to fight poverty and improve standards
of living
3
See Trubek, DM. 2001. Law and development, in International encyclopedia of the social & behavioral sciences,
edited by NJ Smelser & PB Baltes. Oxford: Pergamon 2001: 8443. International legal transfers that gave rise to the law
and development movement are basically a product of the World War II aftermaths. In its original version, law and
development was a support to a State-centred capitalist development and import substitution policies where the role of
the law was to make the State more efficient. The later advent of neoliberal ideas prompted a radical shift and change in
that original idea of law and development, which has since undergone mutations. On this score, also see Trubek, DM.
2007. The owl and the pussy-cat: is there a future for “law and development”? Wisconsin International Law Journal
25(2): 235. See also Carothers, T. 2006. The rule of law revival, in Promoting the rule of law abroad: in search of
knowledge, edited by T Carothers. Washington: Carnegie Endowment for International Peace: 3.
1
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
initiatives of institutional reform a feeling of replicas of past policies. 4 The early 1980s was another
period of international institutions’ active push for law reforms, especially in the developing world,
mainly as conditions for continued financial assistance.5 The phenomenon of ‘globalisation’, met by
the surge of regional trade alliances, added a fresh look at the debate, and the felt need for so-called
developing countries to integrate their economies into the global market considerably accentuated
the postulate of development through law.6
Against this backdrop some African countries, at the dawn of the 1990s, initiated a
‘modernisation’ process of their legal systems for the major part inherited from colonialism and
which certainly were no longer suited for the challenges of the globalisation of markets. Whether
this ‘need’ came along with some conditionality is not clearly (if at all) stated in literature and
everything points to the fact that it is a law inspired by Africans for the development of Africa.
Noteworthy, however, is that in the ‘Law and the Neoliberal Market’ moment on the chart of law
and development doctrine and practice, ‘the vision of law [is] an instrument to foster private
transactions’.7 Hence, somehow ‘conscious’ of the power of law to bring development and the
desire to stimulate both national and international investments, the idea will soon translate into the
North, for instance, argues that the quality of institutions matter for economic development stating that ‘Third World
countries are poor because the institutional constraints define a set of payoffs to political/economic activity that do not
encourage productive activity’. See North, DC. 1990. Institutions, institutional change and economic performance.
Cambridge: Cambridge University Press: 110.
5
Trubek (2001). See also Trubek, DM. 2006. The “rule of law” in development assistance: past, present, and future, in
The new law and economic development: a critical appraisal, edited by D Trubek & A Santos. Cambridge: Cambridge
University Press: 74. For a critical assessment of this period when the ‘rule of law’ rhetoric is said to have served as an
instrument of legal imperialism and as a political tool to legitimise despoliation, see Mattei, U & Nader, L. 2008.
Plunder: when the rule of law is illegal. Oxford: Blackwell Publishing. See also Mattei, U. 2003. A theory of imperial
law: a study on US hegemony and the Latin resistance. Indiana Journal of Global Legal Studies 10(1): 383.
6
See e.g. Elias, OO. 2002. Globalization, “law and development”, and contemporary Africa, European Journal of Law
Reform 2(2): 259.
7
See Trubek, D & Santos, A (editors). 2006. The new law and economic development: a critical appraisal. Cambridge:
Cambridge University Press: 5-6. Moreover, it is commonplace that the activities of donor institutions and international
development partners such as the World Bank in the 1990s, as part of their ‘Comprehensive Development Framework’,
were, besides judicial reform, also geared toward assisting countries in their legal reform, especially helping them ‘to
develop legal environments that encouraged local and foreign private investment’, sometimes as ‘conditions or
components of structural adjustment programs [sic]’. See World Bank. 2004. World Bank initiatives in legal and
judicial reform. Washington, DC: World Bank. This view that legal and judicial reform form an integral part of a
comprehensive development is also advocated by Amartya Sen, for whom, however, ‘legal development must be seen
as important on its own as a part of the development process, and not merely as a means to the end of other kinds of
development, such as economic development.’ See Sen, A. 2006. What is the role of legal and judicial reform in the
development process?, in The world bank legal review: law, equity, and development, vol 2, edited by C Sage & M
Woolcock. Washington, DC: World Bank and Martinus Nijhoff: 33. The creation of OHADA in the early 1990s
happens in this context.
4
2
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
creation of a supranational body empowered to initiate this law reform among the member states:
the Organisation for the Harmonisation of Business Law in Africa (‘OHADA’).8
While ‘reaffirming [High Contracting Authorities to the Treaty’s] commitment in favour of
the establishment of an African Economic Community’,9 the 1993 Treaty in its Preamble spells out
their determination ‘to accomplish new progress on the road to African unity and to establish a
feeling of trust in favour of the economies of the Contracting States in a view to create a new centre
of development in Africa’.10 At Québec, Canada, in 2008, the contracting parties reaffirmed their
determination ‘to use the harmonisation of business law as an instrument to reinforce the rule of
law, as well as legal and economic integration’.11
This paper is an attempt to test the OHADA against the rhetoric of law as a development
engine. It also aims at assessing the extent to which OHADA, as a legal tool, could be useful in
serving the purpose of regional integration and economic growth in Africa.
II.
OHADA AS ‘NEW’ LAW AND DEVELOPMENT IN AFRICA
Until very recently, investors tended to associate doing business in sub-Saharan Africa with high
risk.12 Even though each investment decision comes with an associated risk, there are always some
standards of protection that host States must usually comply with toward potential investors.13
8
The Organisation for the Harmonisation of Business Law in Africa (OHBLA) is best known by its French acronym
OHADA standing for Organisation pour l’Harmonisation en Afrique du Droit des Affaires. For the sake of consistency,
we will stick to that French acronym. See the Treaty on the Harmonisation of Business Law in Africa, in Journal
Officiel de l’OHADA 4, 01 November 1997 available at < http://www.ohada.com/traite.html>, accessed 12 January
2012 [hereinafter ‘OHADA Treaty’].
9
Second intent of the preamble of OHADA Treaty of 1993.
10
First intent of the preamble of OHADA Treaty of 1993. According to Renaud Beauchard, ‘the important word here is
“trust,” which French anthropologist Marcel Mauss describes as “the very foundation of all collective action”’. See
Beauchard, R. 2013. OHADA nears the twenty-year mark: an assessment, in World Bank Legal Review, vol.4: legal
innovation and empowerment for development, edited by H Cissé, S Muller, C Thomas & C Wang. Washington, DC:
World Bank: 326.
11
Second intent of the 2008 OHADA revised Treaty.
12
Once considered a ‘failed continent’, Africa is increasingly widely recognised as ‘the world’s fastest-growing
continent’ with an unprecedented flourishing economy since the independence of many of its countries. With this new
booming economy comes a renewed interest of global investors. See August, O. 2 March 2013. The world’s fastestgrowing continent: aspiring Africa. The Economist, available at <http://www.economist.com/news/leaders/21572773pride-africas-achievements-should-be-coupled-determination-make-even-faster>, accessed 25 March 2013.
13
These standards of protection, beyond the minimum standards provided by customary international law, are generally
written down in (bilateral) investment agreements and they govern the conditions under which investment flows from
one country to another should be regulated, with many obligations incumbent upon the Host State. The latter often not
only guarantees physical protection and security of investments, but also ensures that the laws remain unchanged or do
not otherwise adversely affect investors’ rights. Plus, the Host States also provide for remedies usually in the form of
compensation upon expropriation. For an account of the principles governing international law of foreign investment,
see in particular Dolzer, R. & Schreuer, C. 2013. Principles of international investment law. 2nd edition. Oxford:
Oxford University Press.
3
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
However, when domestic law is considered too obsolete to fit into the new environment in which it
now finds itself operating, and its effects unpredictable, the secured (legal) environment for
attracting such investment is absent. This eventually calls for a remedial action, hence a legal
reform, in order to achieve this objective.
OHADA sets out, among others, to harmonise laws relating to business transactions.
OHADA has already succeeded in its rather short life in achieving consensus in an area where some
countries and regions in the world have taken centuries discussing about,14 and others still
struggling,15 to accomplish: a unification of private laws relating to business activities across
seventeen African States. The one-stop-shop environment contributes to shed some light into the
pre-existing cacophony of laws identified as an obstacle to private sector development and
investment flows into the region.16
A. General considerations about the rationale for a new law
Existing institutional arrangements in African countries today, the majority of which were inherited
from the colonial regimes, have failed to promote investment in productive capacity and, as a result,
many of these countries suffer from poor economic performance. In addition, since the legal
environment for business differs significantly across countries, trade between countries suffers from
extremely high transaction costs and many countries find it very difficult to attract foreign
investment. Hence, a study that seeks to examine the ‘harmonisation of business law’ across a select
14
In Latin America, the initiative dates back to 1878 with the signing of the Lima Treaty (unique in the world at that
time), albeit with private international law as the subject matter. Unfortunately, it never came into force. The
Montevideo treaties of 1888-1889 were to follow with the agenda to ‘harmonise conflict of laws rules’, and later the
Bustamante Code (Pan American Code of Private International Law) of 1928, considered as the most notable
development in this Latin America trend at the time because of its codification of principles of choice of law,
jurisdiction, and recognition of judgement at regional level. See Garro, AM. 1992. Unification and harmonization of
private law in Latin America. American Journal of Comparative Law 40(3): 587, where initiatives aimed at
harmonising private laws under the auspices of the Organisation for American States (OAS) have led to convocations of
Inter-American Specialised Conference on Private Law (CIDIP) to adopt several conventions and model laws to foster
inter-American integration. Whether this is the proper forum for a Latin America’s specific needs is what remains
questionable.
15
See for instance Basedow, J. 1996. A common contract for the common market. Common Market Law Review 33(6):
1169, 1173-1174, where, expressing a wish for a harmonisation of European private law, the author argue that the
harmonisation of laws in the European context was still limited to those sectors deemed necessary to achieve the Single
Market (or the Internal Market as it is today called), the rest being left to national legislators. With a step back,
nevertheless, one can say that new dimensions in the African context must be engaged, probably in the sense of ongoing debates over harmonisation of European private law, i.e. by taking social values, culture, into account, and not
resting merely on the role of law to facilitate the rules of the market. Espousing that view, see Brüggemeir, G et al.
2004. Social justice in European contract law: a Manifesto. European Law Journal 10(6): 653.
16
The one-stop-shop operates so as to allow free movement of a company registered in the territory of one Member
State without having to comply with regulation of each single county. This is also what obtains in the free trade
agreement scenario.
4
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
group of countries is very important for policy. The harmonisation should increase trade and
investment and, at the same time, promote further integration of the economies of member
countries. Although the harmonisation, as discussed in this paper is taking place primarily in former
French colonies, it is a good start, which if successful, could be expanded to the rest of the continent
As the first initiative to harmonise laws in Africa,
The idea behind the creation of OHADA sprang from the political will to strengthen
the African legal system by enacting a secure legal framework for the conduct of
business in Africa, which is viewed as indispensable for the development of the
continent.17
Furthermore, OHADA is described as a ‘legal tool thought out and designed by and for
Africa to serve the purpose of regional integration and economic growth on the continent’.18
OHADA is today comprised of seventeen (17) African states from West and Central
Africa.19 The objective, as spelled out in Article 1 of the Treaty, is to harmonise ‘business laws in
the Contracting States by the elaboration and adoption of simple modern common rules’ and to
promote arbitration as a means of settling contractual disputes. The idea behind this initiative came
as a reason of the fact that the African continent needed a strong and secure legal system that would
serve as engine for its development.20 This call for legal reform is also attributed to OHADA states’
local traders who were desirous to see their investments secured by getting rid of outdated laws, a
securitisation that would in turn be conducive to investment, thus attract business partners from
abroad notably in the form of foreign direct investments.21 In order to achieve its goals, OHADA
issues unified legislation in the forms of Uniform Acts (‘UAs’) on several areas of business law.22
17
Martor, B et al. 2002. Business law in Africa: OHADA and the harmonisation process. London: Kogan Page
Publishers: 5.
18
In the words of late Judge Kéba Mbaye, former President of the Steering Committee for the implementation of
OHADA project, president of UNIDA (Association for a Unified System of Business Laws) and Honorary VicePresident of the ICJ as reported by Martor et al (2002:vii).
19
To the exception of Comoros situated in the Indian ocean, OHADA membership comprises the following other
Central and Western African states: Benin, Burkina Faso, Cameroon, the Central African Republic, Chad, Congo, Cote
d’Ivoire, Democratic Republic of Congo (DRC), Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Mali, Niger,
Senegal, and Togo.
20
See Martor et al (2002:4). See also Forneris, X. 2001. Harmonising commercial law in Africa: the OHADA. Juris
Périodique 46: 77.
21
Mouloul, A. 2009. Understanding the organization for the harmonization of business law in Africa (O.H.A.D.A.). 2nd
edition. Port Louis: 10. However, whether foreign direct investments (FDIs) actually contribute to or bring development
is arguable. Views are shared on this question. See for instance Carkovic, M & Levine, R. 2005. Does foreign direct
investment accelerate economic growth?, in Does foreign direct investment promote development?, edited by T Moran,
E Graham & M Blostrom. Washington, DC: Institute for International Economics & Center for Global Development:
5
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
Membership of the Organisation reflects a common tradition at least in two respects. First,
almost all Member States share the French language in common as their official language with the
exception of Equatorial Guinea (Spanish), Bissau-Guinea (Portuguese) and Cameroon where
English is spoken alongside French. Second, they all share a tradition of Civil law inherited from
their colonial masters except Cameroon where English Common Law applies in the Englishspeaking part. 23
OHADA harmonisation process aims at creating a secured legal and judicial framework for
business and economic activities, which will in turn enhance competitiveness, hence economic
growth. It ensures a level playing field for traders (individuals or firms) operating in each territory
of the Member States by getting rid of domestic laws peculiarities. OHADA uniform legislations
are modelled on (French) civil law, making OHADA laws civil law-based. These ‘civil lawinspired’ OHADA laws call into question the role of this legal tradition as an engine of
development. This is the case especially because literature and studies have revealed the weakness
of civil law to nurture economic growth or foster development. This is an aspect to which we shall
return later.
B. Before OHADA, a feeling of lawlessness? Law as an impediment to development in SubSaharan Africa
The aftermath of independence witnessed changes in institutional arrangements of former colonies.
While putting in place economic policies through what many of newly independent nations will call
‘development plans’, their investment regimes will be adjusted in line of the new aspirations of the
195, who are of the opinion that the degrees of receptiveness are sometimes combined with endowment (natural or
institutional). For them, therefore, contrary to the prevalent assertions of the impact of FDIs on development, it is not
enough to ‘attract’ investment if a country is ‘congenitally’ not fit or simply because institutions in place do not lend
themselves to an environment conducive to growth. In short, ceteris paribus, FDIs do not alone in themselves bring
growth.
22
The adopted UAs currently cover nine (9) areas of business law, viz. General Commercial Law; Commercial
Companies and Economic Interest Groups; Securities; Bankruptcy; Arbitration; Simplified Recovery and Enforcement
Measures; Accounting; Contracts for the Carriage of Goods by Road, and the last UA on Cooperatives adopted in 2010.
Note that at its meeting in Lomé (Togo) in December 2010, the OHADA Council of Ministers (the legislative organ),
besides adopting the UA on Cooperatives, adopted revisions of two of the eight pre-existing UAs, notably on General
Commercial Law and on Securities.
At its meeting in Bangui in March 2001, the Council of Ministers decided that the harmonisation programme
would also embrace ‘competition law, banking law, intellectual property law, contract law, the law of proof.’ In this
vein, at the request of the International Institute for the Unification of Private Law (UNIDROIT), as transmitted to the
OHADA Permanent Secretariat in September 2004, the draft UA on Contract law was prepared by a group of eminent
jurists, awaiting adoption. See Fontaine, M. 2004. The draft OHADA uniform act on contracts and the UNIDROIT
principles of international commercial contracts. Uniform Law Review 9(3): 573. See also, Explanatory note to the
preliminary draft OHADA uniform act on contract law. Uniform Law Review 13(1-2): 638.
23
Martor et al (2002): 5.
6
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
people, i.e. political and economic freedom.24 Development connoting economic growth, diversity
of laws is then perceived as an obstacle to commercial transactions, within individual countries,
among African countries, as well as with non-African states.25
Post-colonial investment laws, to speak of them particularly, contained wide
‘nationalisation’ provisions, which, although legitimate for not being contradictory to customary
international law rules relating to expropriation,26 were intended to discourage Foreign Direct
Investments (FDIs) in favour of public loans.27 Even though the main objective pursued by these
independent States was to consolidate their economic independence vis-à-vis the West,28 they
would soon realise to their dismay that they remained dependent on external/foreign grants, loans
and FDIs for many of their infrastructure projects because unable to raise enough capital
domestically.29 SSA’s economies being outward oriented, and former colonial powers still in
control of the ‘production and distribution of world’s resources’,30 a suitable law would be needed
in order to consolidate present advantages, and with a view of attracting new forms of investments.
One (if not the) problem of Africa’s participation in world trade, a guarantee of economic
development, is identified in the diversity of its laws as Bamodu argues.31 In fact, diversity is
encountered at different levels.32 At domestic level, ‘informal’/indigenous laws (customs and
African traditions) coexist alongside ‘formal’ laws (foreign/colonial laws that remained unchanged
when independence was acquired).33 Also, institutional arrangements, whereby some countries
would elect a federal system of governance, will be a fertile ground for conflicts of laws.34
Akinsanya, A. 1981. Host governments’ responses to foreign economic control: the experiences of selected African
countries. The International and Comparative Law Quarterly 30(4):769, 770.
25
Bamodu, G. 1994. Transnational law, unification and harmonization of international commercial law in Africa.
Journal of African Law 38(2): 125.
26
Akinsanya, A. 1980. The expropriation of multinational property in the third world. New York: Praeger Publishers:
16-48, cited in Akinsanya (1981):770 footnote 2.
27
Akinsanya (1981), 770-771.
28
Picciotto, S. 1993. International business and global development, in Law and crisis in the third world, edited by S
Adelman & A Paliwala. London: Hans Zell Publishers: 152.
29
Akinsanya (1981): 773.
30
Ibid., 774.
31
Bamodu (1994). This view is shared by many, if not all, scholars who undertook to write on the rationale for a new
business law in Africa. See for example Mouloul (2009). See also Dickerson, CM. 2005. Harmonizing business laws in
Africa: OHADA calls the tune. Columbia Journal of Transnational Law 44(1): 17.
32
This feature is what has been termed by lawyers and anthropologists as ‘legal pluralism’ sometimes defined as the
plurality or coexistence of legal systems in a given geographical area or society (the classical one) and even at global
level. See for instance Merry, SE. 1998. Legal pluralism. Law & Society Review 22(5): 869.
33
Bamodu (1994): 125.
34
Ibid.
24
7
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
As far as intra-African diversity is concerned, African countries differ with each other for
many reasons, the main and obvious one being that they were colonised by different (European)
powers which they inherited their laws from – even in countries such as Nigeria & Benin or Nigeria
& Cameroon, where customs and traditions may be quite similar one can easily spot this level of
diversity. Faced with the difficulties to insert African legal systems in the existing legal families at
the time, which he would agree to be ‘customary law family’,35 Bamodu suggests that the
contemporary legal systems of African countries should be classified into either of the following:
‘common law family, continental European civil law family, and mixed legal family
jurisdictions.’36 This diversity across the continent is posited as the main obstacle to an intraregional economic integration as well.
The third level of diversity resides in the developments of laws in former colonial powers,
which have not been followed by former colonies that kept the formers’ legal systems upon
independence, and even for a long time thereafter.37 In fact, the laws in Continental Europe as well
as Anglo-American laws, while they did not stand still and have for the most part undergone several
reforms, remained unchanged at the periphery since their inception. This creates diversity not only
across African countries that either adopted ‘civil law’ or ‘common law’, but also and foremost with
those systems African legal systems believe to have borrowed from and consequently believe to
belong to. Furthermore, African legal systems have not always stuck to the law as it then was, but
some have operated many changes internally sometimes borrowing from other legal systems they
were originally not ‘affiliated’ with.38
In summation, the disparity of laws is not only an obstacle to trade among African countries
inter se, but also between African states and the rest of the world because of this myriad of legal
systems to which an outsider is not comfortable with, or simply ignorant of, and therefore prefers
In fact, in the legal map existing at that time, a Euro-American way of looking at ‘major systems’ of the world
reserved a residual place to other systems not belonging either to Continental Europe or to Anglo-American legal
systems. See for instance Zweigert, K. and Kötz, H. 1998. An introduction to comparative law, 3rd edition. Oxford:
Oxford University Press. Their ‘legal families’ are today made of the following: the Romanistic legal family, the
Germanic legal family, the Anglo-American legal family, the Nordic legal family (Scandinavia), Law in the Far East
(China and Japan), and Religious legal systems (Islam and Hindu).
36
Bamodu (1994): 126-127. See also Mattei, U. 1997. Three patterns of law: taxonomy and change in the world’s legal
systems. American Journal of Comparative Law 45(1): 5, where the author classifies African legal systems into ‘rule of
political law’ because of the idea of ‘law of development’ that underpins it. He nevertheless warns that sub-families
make it possible for this system to be at the border between both the ‘rule of political law’ and the ‘rule of traditional
law’. This taxonomy clearly exemplifies the difficulty of classifying legal systems in the contemporary world. The
bottom line is that the two both authors argue about the difficulty of placing African legal systems into one of the
existing classifications for lack of homogeneity among these systems.
37
Bamodu (1994): 128.
38
Ibid.
35
8
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
not to delve into. Solutions resided therefore in resolving these differences by an approximation of
laws, an exercise that would not only accelerate African sub-regions economic integration,39 but
also strengthen the continent’s ability to withstand challenges of international trade and competition
in a new era of advanced globalisation.
Concerning business and laws, inspiration from a Cameroonian legal system where both
French civil law and English common law are juxtaposed and coexist as they governed transactions
depending on which part of the national divide one found himself 40 could have been resorted to.41
Cameroonian legal systems is a bit peculiar in sub-Saharan Africa where both civil law and
common law apply as well as customary law (and religious law), a mixed legal system par
excellence. But OHADA texts drafters elected taking advantage of the already existing international
movements aimed at framing international and ‘transnational’ commercial laws,42 some of which
are binding while other are soft laws. The United Nations Commission on International Trade Law
(UNCITRAL) conventions could be seen as an example of the former while the International
Institute for the Unification of Private Law (UNIDROIT) Principles is an example of the latter.43
The Draft OHADA Uniform Act on contract law is modelled upon UNIDROIT Principles. 44
39
Africa is composed of many regional economic communities (RECs) (with sometimes overlapping memberships) of
which only 8 have been designated by the African Union, pursuant to Abuja Treaty of 1991, as ‘building blocks’ toward
an African Economic Community (AEC) to be achieved by 2027. These are the following: CEN-SAD (Community of
Sahel-Saharan States), COMESA (Common Market for Eastern and Southern Africa), EAC (East African Community),
ECCAS (Economic Community of Central African States), ECOWAS (Economic Community of West African States),
IGAD (Intergovernmental Authority on Development), SADC (Southern African Development Community) and UMA
(Arab Maghreb Union). It is expected that harmonisation of laws could speed up the process even though current
OHADA’s membership is perceived to reflect a kind of bias in favour of civil law.
40
This is not to say that the sources of Cameroonian law reflect French and English-derived laws only. In fact,
customary laws enjoy recognition, although with some limitations, before courts (to the extent that the customs is
recognised and agreed by the parties to be applicable to them, and is not ‘repugnant to natural justice, equity and good
conscience’ or judged incompatible with any existing [formal] law – Section 27 (1) of Southern Cameroons High Court
Law of 1955). Nevertheless, Sharia law is a prominent source of law in the Muslim northern part of the country.
Customs lie at the bottom of the ladder of the hierarchy of norms under Cameroonian legal system.
41
Bamodu (1994), 134.
42
Ibid: 138 et seq.
43
In fact, the UN Convention on Contract for the International Sales of Goods (CISG) of 1980, a unification of world
substantive sales law, is the brainchild of UNCITRAL and at the time of writing, it is composed of 78 contracting states.
See <http://www.cisg.law.pace.edu/cisg/countries/notables.html>, accessed 13 March 2013. UNIDROIT has
contributed to the ‘restatement’ of general principles of contract law since 1994, ‘a set of rules designed to be used
throughout the world irrespective of the legal traditions and the economic and political of the counties in which they
are to be applied’ (Art. 1.6(2) UNIDROIT Principles 2004, at XV), to the extent that its work, despite its non-binding
character, was qualified by Joseph Perillo as ‘a significant step towards the globalization [sic] of legal thinking’. See
Perillo, JM. 1994. UNIDROIT principles of international commercial contracts: the black letter text and a review.
Fordham Law Review 63(2): 281, 282, cited in Bonell, MJ. 2008. The CISG, European contract law and the
development of a world contract law. American Journal of Comparative Law 56(1), 18, footnote 93.
44
Bonell (2008): 20.
9
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
OHADA comes into being in the early 1990s, a period of paradigm shift and the coming of
neo-liberalism at its peak in the reforms in the developed world coupled with the transfers of the
Washington Consensus package in Africa. It is a period also dominated by the debate over
globalisation of exchanges.
C. OHADA and ‘Law and Finance’ Literature – a Strong Case for a Paradigm Shift
The challenges of the critics of the Washington Consensus is this: they need to
provide an alternative set of policy guidelines for promoting development, without
falling into the trap of having to promote yet another impractical blueprint that is
supposed to be right for all countries at all times.45
The post Washington Consensus acknowledges that neoliberal reforms have failed tremendously
since the ‘consensus’ did not succeeded in bringing development purported to be achieved upon
scrupulous implementation of these policies. Rather, poverty increased and signalled searches for
new alternatives, this time to address context-specific problems. The same paradigm shift can be
said of ‘law and development’ doctrine that no longer rests solely on neoliberal aspect of
development. It is widely recognised today that one size does not fit all and that reform must be
conducted with consideration to the context, while taking note that pace and sequencing matter.46
The advent of OHADA in the early 1990s is met by the wave of neoliberal policy reforms:
fiscal policies and tax reforms, redirection of public spending, trade liberalisation, privatisation of
state owned enterprises, deregulation of the economy, law reforms geared towards securitisation of
property rights, to name but these. In short, this period marks the transfer of the economy from the
public sector to the private sector which is labelled as ‘efficient’,47 thus guaranteeing development.
This is in substance a tenet reflecting the Americanisation of international financial institutions of
the time.48
45
Rodrik, D. 2002. After neoliberalism, what?, Remarks at the BNDES Seminar on New Paths of Development, Rio de
Janeiro, September 12-13.
46
Trubek, D. (2006):89-93. See also Mattoo, A & Fink, C. 2002. Regional agreements and trade in services: policy
issues, World Bank Policy Research Working Paper No. 2852 (June).
47
‘Efficiency’ is at the core of law and economics scholarship. A market is said to be efficient when it guarantees the
optimal allocation of resources (i.e. wealth maximisation). The role of the law in this context should therefore be geared
toward guaranteeing this efficiency (which ensures an undistorted competition in the market, itself a proof of an
efficient market….and so on and so forth). See Cooter, R & Ulen, T. 2011. Economic analysis of law, law and
economics. 6th edition. Prentice Hall Publishing.
48
Mattei (2003): 25 et seq.
10
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
‘Law and Finance’ literature’s tenets can be briefly summarised in the following lines. 49
Poor countries regulate business the most. This regulation encompasses the time required to start a
business, costs associated to meeting the requirements, minimum capital to commence a business.
Heavy regulation in turn brings bad outcomes. These are exhibited in the inefficiency in public
institutions (longer delays and higher costs), more unemployed people, corruption, less productivity
and investment, bad quality of private and public goods. One size fits all in that the manner
businesses are regulation in developed countries could work in developing countries if regulation
could be limited to the essential (e.g. statistical registration, tax and social security registration)
without imposing unnecessary burden on businesses.
Consumers face higher prices when firm’s entry regulation are cumbersome. Foreign
investors avoid investment in countries with more burdensome regulations thereby offsetting the
potential welfare benefits to consumers in the country, which regulation was sought to increase by
addressing market failures such as monopolies and externalities.
The overall ‘legal origin’ theory tends to show that, when it comes to doing business,
countries based on (French) civil law are less attractive for investments and for the development of
domestic businesses.50 OHADA countries have nonetheless chosen this model to modernise their
business law and the question raised is that of the competition between civil and common law as
better suited for investment in OHADA states.51
Addressing this issue of ‘civil law’ and ‘common law’, one author notes that ‘French legal
system is at worst neutral as compared to the common law system’, 52 and not inferior as law and
finance theories tend to portray. Although French civil law is correlated with slow development, it
49
See La Porta, R et al. 1998. Law and finance. Journal of Political Economy 106(6): 1113. Glaeser, EL & Shleifer, A.
2002. Legal Origins. The Quarterly Journal of Economics 117(4):1193. See also World Bank, Doing business in 2004:
understanding regulation. Washington, DC: World Bank and Oxford University Press.
50
Dickerson (2005): 22. See also Mahoney, PG. 2001. The common law and economic growth: Hayek might be right.
The Journal of Legal Studies 30(2): 503, whose claim, based on law and finance theory and following Friedrich
Hayek’s view, is that English legal institutions are superior to French ones. Because of common law’s orientation
toward private economic activity by providing better investment protection, the argument goes, countries of this
tradition have experienced faster growth than those under civil law whose institutions are geared toward government
intervention and redistribution.
51
In Edgardo Buscaglia’s opinion, this is one of the challenges developing countries face when they envisage
upgrading their laws that of choosing between centralised law (top-down) as opposed to decentralised law-making
(bottom-up, especially from judges). See Buscaglia, E. 2000. Law and economics of development, in Encyclopedia of
law and economics, vol. 1: the history and methodology of law and economics, edited by B Bouckaert & G De Geest.
Cheltenham: Edward Elgar Publishing: 566.
52
Dickerson (2005): 22. Concurring, see Mancuso, S. 2008. The new African law: beyond the difference between
common law and civil law. Annual Survey of International and Comparative Law 14(1): 39.
11
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
does not necessarily cause it, because other factors such as natural endowments influence the way
development occurs.53
The debate over civil law vs. common law notwithstanding, one of reasons to praise legal
origins theories is their denunciation of red tape, corruption, that impede upon an effective
functioning of an administration, hence their repercussions on the economy as a whole. Needless to
say that many OHADA countries feature today among the most corrupted nations of the world,
even though corruption is not the panacea of the region as such. 54 ‘Good governance’ – whatever
the meaning – is therefore primordial.
OHADA AS AN ‘INSTRUMENT’ FOR REGIONAL INTEGRATION IN AFRICA
III.
The OHADA also aims at using the harmonisation of business law as an instrument to reinforce
legal and economic integration.55 It is in this spirit that OHADA was described by Judge Kéba
Mbaye, one of OHADA’s founding fathers, as a legal tool conceived to serve the purpose of
regional integration and economic growth on the African continent.56
A. Economic Integration and OHADA
In this increasing globalising world, regional economic integration appears as preparatory steps – or
building blocks in trade parlance – towards multilateral liberalisation. Structural adjustment
programmes (SAPs) having been an obstacle to these trends in SSA,57 it can be expected that the
willingness to join OHADA will coincide with that of new impetus in economic integration in those
blocs.
53
Dickerson (2005): 37-38.
See Transparency International Corruption Perception Index (CPI) that measures countries’ level of public-sector
corruption available at < http://cpi.transparency.org/cpi2012/results/>, accessed 25 March 2013.
55
See the second intent of the Preamble of 2008 OHADA revised Treaty.
56
See Judge Kéba Mbaye cited in Martor et al (2002).
57
In fact, implementation of SAPs – especially macroeconomic stabilisation – prescribed by Bretton Woods halted SSA
countries (OHADA States in particular) from incurring more expenditures than prescribed for their individual domestic
functioning thereby frustrating contributions to common regional projects that would have been beneficial to them as a
group. Because in pursuing SAPs African countries unilaterally engaged into trade liberalisation and deregulation it
resulted in ‘governments already losing revenue from the SAP-imposed liberalisation of external trade [no longer being
in the] mood to implement free trade further even at the regional level’. Ojo, OBJ. 1999. Integration in ECOWAS:
success and difficulties, in Regionalism in Africa: integration and disintegration, edited by D Bach. Bloomington:
Indiana University Press: 122, quoted by Lee, M. 2002. Regionalism in Africa: a part of the problem or a part of the
solution. Polis/R.C.S.P./C.P.S.R. 9, 9 available at < http://www.polis.sciencespobordeaux.fr/vol10ns/lee.pdf>, accessed
19 March 2011.
54
12
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
Regionalism itself is not a new phenomenon in Africa since the oldest customs union is
found on the continent.58 But the recent boom of regional trade blocs in many parts of the globe,
and in Africa in particular, can be assimilated with the desire of nation-states involved to secure a
fair share of international exchanges’ benefits. Reasons for such patterns existing in the
contemporary world are numerous and can stem from benefits associated with scale economies
(even among homogeneous countries) based primarily on comparative advantage theory. Other
reasons are related to political economy strategies to jointly affect terms of trade as a ‘group’ when
it is impossible for one State to do it individually on its own.59
In this context, OHADA poses as a stepping stone toward such regional integration(s) in
Africa in that a successful ‘unification’ of members’ laws would eventually reduce obstacles to
intra-Africa trade. A well designed and well conducted integration in Africa would help the
continent withstand challenges of international competition where the countries involved adopt a
concerted strategy and speak with a unique voice in international (economic) forums. Obstacles of
OHADA’s role as facilitator of economic integration remain present in the conflict of competences
in areas not ‘supposed’ to be covered by OHADA law itself because of its narrowly defined agenda
around a somewhat ‘traditional’ business law. A subsequent institutional reform would allow
tackling other aspects not currently envisaged as falling in the ambit of its reach.
B. Legal Integration – a De Novo Approach to African Integration
As a fully-fledged international organisation, OHADA pursues its goal of a common law among
Contracting Parties through the establishment of institutions with particular functions, and an
innovative law-making process.
1. Institutional models
Regional integration often revolves around two main institutional dimensions: the vertical
dimension of institutional arrangements on the one hand, and the vertical dimension on the other
58
In fact the Southern Africa Customs Union (SACU) was formed as early as 1910 and makes SACU a centenary (100
years) at the moment of writing. The SACU 1910 Arrangement was re-negotiated in 1969 to reflect the independences
wave and democratisation era and new challenges of the time (a dispute settlement mechanism, common policies in
competition, in agriculture, in industrial development, etc. were instituted ); and the ensuing Agreement was signed in
2002.
59
According to Krugman, two countries might wish to enter into a trade agreement because it gives them more sway to
affect jointly terms of trade since they cannot do it individually on their own. Whether true for African countries remain
an empirical question. See Krugman, P. 1991. The move toward free trade zones, Economic Review (Nov-Dec): 5
13
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
hand.60 If the vertical dimension distinguishes between intergovernmental institutional model and
the supranational institutional model of regional integration, the horizontal dimension on its part
‘describes the process of delegating policy tasks from regional intergovernmental organisations to
private sector agencies’ in view of achieving faster and deeper economic integration.61 OHADA
opted for the supranational institutional model of integration.62
2. The law-making process
The idea behind the creation of an organisation to harmonise business laws in Africa germinated in
a Franc Zone63 finance ministers’ meeting in Ouagadougou, Burkina Faso, in April 1991, and later
in Paris, France, in October of that same year.64 After noticing that their respective countries and the
region as a whole were lagging behind in terms of development and business opportunities, those
officials decided to look more into the obstacles along their ways.65 In this process, a group of
eminent African jurists led by the late Kéba Mbaye was entrusted with the task of gauging the
workability of the project. Obstacles having been identified as being the judicial and legal insecurity
(or diversity) across the region,66 the ensuing consultation rounds across the continent, in the States
60
Mattli, W. 2003. Institutional models of regional integration: theory and practice, in Bridges for development:
policies and institutions for trade and integration, edited by R Devlin & A Estevadeordal. Washington: Inter-American
Development Bank: 161
61
Ibid.
62
The European integration process itself is an incarnation of ‘supranationalism’, although one also finds here instances
of ‘intergovernmentalism’. That’s why instead of using ‘supranational’ and ‘intergovernmental’, Professor Ramon
Torrent prefers the terms ‘two techniques’ of international economic law creation where rules enacted by means of the
first technique are referred to as ‘primary law’ and those enacted by means of the second as ‘secondary law’. See R
Torrent. 2003. Regional integration instruments and dimensions: an analytical framework, in Bridges for development:
policies and institutions for trade and integration, edited by R Devlin & A Estevadeordal. Washington: Inter-American
Development Bank: 119, 122.
63
The Franc Zone is an economic and principally monetary area constituted by former French colonies of central and
west Africa (except for Equatorial Guinea and Guinea-Bissau that were not its colonies but are members of the zone).
Furthermore, Cameroon is not de jure a French colony but it has been administered as such since the end of WWII. The
‘Franc des Colonies Françaises d’Afrique (CFA)’ – African French colonies – was introduced in 1945 when France
joined Bretton Woods, in view of not only assuring a fixed parity with the French Franc (FF) but also of sustaining the
exchange rates for these colonies with the dollar. See Zafar, A and Kubota, K. 2003. Regional integration in central
Africa: key issues. Africa Region Working Paper Series 52: 2. The currency was renamed upon independence and
subsequently as Franc de la Communauté Financière Africaine – African Financial Community – for UEMOA, and as
Franc de la Coopération Financière en Afrique – Financial Cooperation in Africa – in CEMAC. Memberships come
from CEMAC countries (Cameroon, Central Africa Republic, Chad, Congo, Equatorial Guinea and Gabon) and
UEMOA countries (Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo) and Comoros,
and France naturally. See B. Martor et al (2002): 290.
64
Literature traces back a similar initiative as earlier as May 1963 (the aftermath of independences) at one of the
meetings of Justice Ministers of francophone Africa led by René David. See Mouloul, (2002): 17. See also Forneris
(2009): 77.
65
Martor et al. (2002): xxiii and 5.
66
On the diversity of laws as a reason enough to embark on the harmonisation of commercial law on the African
continent, see Bamodu (1994).
14
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
concerned, led to a treaty signed on 17 October 1993 in Port-Louis, Mauritius, thereby officially
giving birth to this international organisation. The Treaty later entered into force on September 18,
199567 and was modified at Québec (Canada) on 17 October 2008. This acceptance of Heads of
States to create a supranational entity in charge of making new and modern laws suitable for a new
development trend also comes at the moment of serious debt crisis and cuts in public spending.
But unlike the traditional (economic) integration in Africa where the practice so far was to
negotiate basic market access rules and rules of treatment with law used as an instrument to increase
economic flows by eliminating obstacles to trade,68 OHADA harmonisation process follows a quite
revolutionary and ground-breaking method. Legal integration in its own right is the main
objective.69
In fact, besides the objectives identified in the preamble of the treaty, 70 OHADA’s objective
is threefold;71 the harmonisation of business laws in the Contracting States:
-
by the elaboration and adoption of modern common rules adapted to their economies,
-
by setting up appropriate judicial procedures, and
-
by encouraging arbitration for the settlement of contractual disputes.
The term ‘harmonisation’ itself is a misnomer since beyond the exercise tending to
harmonise the result is that of ‘unification’ of substantive laws and procedures.72 UAs enter into
force ninety (90) days after their adoption unless a particular UA provides otherwise. 73 Pursuant to
Article 10 of OHADA Treaty, UAs are of a supranational character because once adopted they
become directly applicable in the territory of Contracting Parties and override all national laws on
the subject matter, present and subsequent, but only to the extent they are inconsistent or conflict
For a detailed OHADA’s roadmap, see Mouloul (2009): 17-20.
One can cite as far as rules of market access are concerned the example of provisions relating to the ‘elimination of
tariffs’ as well as ‘quantitative restrictions’. Concerning rules of treatment, we have the basic provisions of ‘most
favoured nation’ (MFN) treatment or of ‘national treatment’ (NT) in trade agreements. In fact these
69
See Pougoue, PG. 2001. OHADA, instrument d’intégration juridique. The African Law Review 2(2): 11. cf Basedow
(1996) on the fact that harmonisation of laws in the European context is still limited to sectors that are necessary in the
achievement of the European internal market, the other sectors being left to national legislators.
70
That of ‘development’ (First Intent) and that of the use of the ‘rule of law’ to that end and as instrument of economic
integration (Second Intent) in the Revised Treaty. This is what David Trubek identifies as a paradigm shift of
development theories: from ‘law and development’ to ‘rule of law’. See Trubek, D (2006): 80.
71
Article 1 of OHADA Treaty.
72
In fact, the French word ‘harmonisation’ instead of ‘unification’ was consciously chosen for political reasons. See
Beauchard (2013), 324 (n 10).
73
Article 9 of OHADA Treaty.
67
68
15
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
with the UAs concerned.74 Judicial uniform interpretation of the Treaty, UAs and other Regulations
is ensured by the CCJA.
IV.
CONCLUSION
The diversity of laws across countries is a major constraint to trade and investment. In fact, trade
between former colonies of France and Britain in West Africa has been hindered by conflict of
laws. It has been noticed that trade and investment are being hindered by ‘modern’ legal regimes
introduced through colonialism and sustained by the post-independence governments. Hence, an
effort to ‘harmonise business laws’ in these countries should augur well for both trade and
investment. Although the harmonisation, as discussed in this proposal is taking place primarily in
former French colonies, it is a good start, which if successful, could be expanded to the rest of the
continent
OHADA was created with the idea that it will serve as a development engine on the African
continent which was lagging behind in terms of investment opportunities due to outdated laws. In
order to build confidence and trust, OHADA can be praised to have achieved in a rather short
period of time to set up functioning institutions and produce uniform laws on a range of areas of
business laws in furtherance of its goals, thereby strengthening investors’ confidence in the
region.75 French civil law was relied upon since, to avoid reinventing the wheel, it was the most
efficient way to effect change in law in those countries sharing that legal tradition in common –
even though the divide between common law and civil law today is much of a cosmetic nature.
OHADA law is also an asset in the pursuit of economic integration and it can only be hoped
that other African Union Member States will join the initiative. But all with OHADA is not bright
though. Much is still left to be done in other areas not belonging to ‘pure’ business laws like
competition law and investment laws in order to avoid regulatory disparities and other effects such
as race to the bottom. This problem is accentuated by the fact that almost each African REC has its
competition rules and investment regimes, hence the issue of implementation. Corruption being also
OHADA CCJA Advisory Opinion No. 001/2001/EP of 30 April 2001 given at the request of Cote d’Ivoire. Article
10 of OHADA Treaty reads: ‘Uniform Acts are directly applicable and overriding in the Contracting States
notwithstanding any conflict they may give rise to in respect of previous or subsequent enactment of municipal laws’.
75
See Lee, A. 2013. African security enforcement improves under OHADA. International Financial Law Review.
Available
at
<http://www.iflr.com/Article/3215747/Banking/Africa-security-enforcement-improves-underOhada.html>, accessed 16 June 2013, on the issue that foreign investors looking to Africa are reaping the benefits of
greater certainty under the OHADA’s investment framework and arbitration regime.
74
16
WORK IN PROGRESS – PLEASE DO NOT CITE WITHOUT AUTHOR’S PRIOR CONSENT
endemic in the region, OHADA success could at some point depend on how laws allow fighting
against not only administrations’ red tape and the likes, but also business and economic crimes.76
See for instance Vogl, T. 2009. La lutte contre la corruption: condition essentielle pour la réussite de l’OHADA.
Recueil Penant 867 : 206.
76
17