IBA LAGOS CONFERENCE 2013

• Afolabi, Harles, Major & others highlight critical issues

By: Theodora Kio-Lawson

At the first plenary session of the conference, titled, ‘Investing in Africa. Investors’ protection & general issues’, discussions centred around fundamental issues that foreign investors must bear in mind when investing in Africa. The topic was addressed from a Pan-African standpoint.

The panel which included, Afolabi Caxton-Martins, Guy Harles, Rebecca Major of Herbert Smith Freehills and David Glennie from London amongst others, shared legal experience on investment protection, exchange control rules, Intellectual Property (IP) protection, anti-corruption laws, restrictions on Foreign Direct Investments (FDIs), project financing, joint venture agreements amidst several other ancillary issues.

Afolabi, whose introductory remarks, re-established Africa as a key destination, announced that the continent was “in sharp focus.” He noted however, that African states would have to intensify efforts at alleviating the concerns of investors, with the present rise f investment disputes.

Highlighting critical factors that affect FDI into Africa, the ACAS Partner identified government interference, arbitrary amendment to legislations, weak institutions and rule of law, post-investment changes, and non-performance of contractual obligations by government, as some factors that pose a risk to investments in Africa.

 “The economies of most African states are dominated by the state. The weaker the institution and rule of law, the greater the investment risk. Post-investment changes also pose a risk to these investments, and,” he warned.

Seeking the right security and protection for investors, another member of the panel and Treasurer, IBA Corporate and M&A Law Committee, Guy Harles from Luxembourg, pointed participants to three key solutions and protection measures for investments and investors in Africa. He mentioned, “Political risk insurance, bilateral investment agreements and multilateral investment agreements.”

Describing insurance as an efficient way of getting protection, Harles noted also that Arbitration, Information Technology (IT) concerns, Intellectual Property (IP) rights, loans, etc., are some of the most significant features of investment agreements – whether bilateral or multilateral.

Dwelling on the issue of Joint Ventures (JVs), Rebecca Major advised participants who were made up of members of the legal profession, financial advisers, investment managers, the media and the business community, on ways to have good partnerships between local and international companies or between one local company and another.

The Herbert Smith Freehills Partner, who has over 20 years’ experience advising on energy and mining related acquisitions, disposals, projects and project finance transactions all over the world, explained that, “the first thing to do is to get an understanding of the intentions of all parties.”

 This she noted, would be followed by other considerations, such as funding, a workable exit strategy, dispute resolution, etc.

At the end of the first plenary, panellists and participants agreed that to make the most of investments in Africa, governments must be ready to protect investors and their investments. Investors must be given the right to repatriate profits subject to taxes; they should also have financial security to guaranty payments outside the court system, with the help of guarantees, bonds, political risk insurance. It was also important to provide guarantees that investors will receive fair and equitable treatment, while the state goes further to give assurances that it would not breach or renege on any agreement(s) reached with the investors, concerning their investments- this includes contractual obligations and obligations stemming from legislation.

The conference, organised by the IBA African Regional Forum, the IBA Corporate M&A Law Committee, supported by the Arbitration Committee and the IBA Asia Pacific Regional Forum, attracted business lawyers, investment and financial advisers from various jurisdictions within and outside the continent.

Africa, a confirmed destination for M&A

• As IBA Lagos conference re-affirms Nigeria’s position as an emerging market

Participants and guests at the 2013 International Bar Association (IBA) Mergers & Acquisition (M&A) and Arbitration conference which held in Lagos last week have affirmed the role of Africa in the development and growth of M&A around the globe.

Declaring the conference open on Thursday, November 7th, 2013 The Governor of Lagos State, Babatunde Raji Fashola, SAN, lent his voice to this affirmation, noting that Mergers and Acquisitions was now an integral part of commercial and industrial activity.

“The portion that the African continent now occupies as a business destination should not surprise the discerning mind,” the governor stated.

“The African renaissance in trade and commerce has been an opportunity waiting to happen – natural resources and good public policy is an inevitable path to conducive business climate.

“Now Africa ranks easily as one of the fastest growing regions in the world with an average GDP growth rate in excess of 5% per annum; a one billion strong consumer market expected to double by 2050; and the increasing diversification of African economies. As our economies continue to perform better, business will inevitably begin to look to strategic decisions,” he noted.

It would be recalled that Thomson Reuters only recently identified Mozambique, South Africa and Nigeria as being the top-targeted destinations for M&A in Africa.

According to another report by KPMG, the total value of M&A transactions in Nigeria increased by 379% to $7.415 billion from 37 deals in 2012; from $1.548 billion in 29 deals in 2011.

Participants at the IBA Lagos conference, who were largely foreigners, reiterated Nigeria’s position as a key player in the African economy and the fastest growing economy in sub-Saharan Africa.

In the views of the Co-Chair of the African Regional Forum, Mrs. Olufunmi Oluyede, “Africa has become the beautiful bride – being wooed and courted globally in glorious splendour, as corporate finance, Mergers & Acquisition events continue to make world headlines,” she announced.

Earlier, in his remarks, conference co-chair, Gbenga Oyebode, MFR, had noted that much as Africa is identified as the last frontier, Nigeria was a bigger piece of that frontier.

Nigeria has also been identified as one of the eleven countries (‘The Next Eleven’), with a high potential of becoming, along with the BRIC countries (Brazil, Russia, India and China), the world’s largest economies in the 21st century.

The conference which took place at the prestigious Eko Hotel & Suites, Victoria Island, Lagos recorded an usual number of international delegates, within and outside Africa, confirming the report that expanding multi-nationals are predictably focusing on pro-growth emerging economies in Africa, such as Nigeria.

The foreign guests were treated to a traditional Nigerian welcome and taken on a tour around the historical city of Lagos.

The IBA Lagos conference 2013 opened with a welcome cocktail on Wednesday November 6th  at the Freedom Park, Lagos.

The event, which took place at rooftop of the Kongi’s Harvest Art Gallery, was well attended by international delegates, most of whom had arrived Nigeria, a day before the event.

The Freedom Park was chosen for the welcome reception by the Conference Host Committee, due to the rich historical significance it holds for Lagos – host state of the conference. The park, fundamentally linked with colonialism, is first a celebration of freedom from colonialism and a symbol of renewal.

The park, which used to be a colonial-built prison with inmates like Herbert Macaulay, Chief Obafemi Awolowo, Sir Adeyemo Alakija, was converted into public-use in 2010 as a leisure park, housing an art gallery, a fishpond, a museum, historic artefacts and a food court.

International guests who walked through the beautiful Kongi’s Harvest Art Gallery with other local delegates, had the pleasure of looking through and admiring the gallery’s unique paintings and art collection, on their way to the rooftop.

Kongi’s Harvest is one of Soyinka’s most popular plays, and the Nobel Laureate is fondly called Kongi, by members of the literary world and admirers. The gallery is named Kongi’s Harvest Art Gallery to appreciate the literary giant’s role in the growth of African art and culture, home and in the Diaspora. A section of the gallery, houses some of Soyinka’s works, such as books and artefacts.

Notable guests and delegates spotted at the cocktail event include, Managing Partner, Herbert Smith Freehills, Michael Walter, Senior International Counsel, Christoper Carroll, Travers Smith; Herbert Smith Freehills Paris, Partner, Rebecca Major, General Counsel to the Lagos State Governor, Oyinkansola Badejo-Okusanya, Former Member Of House Of Representatives, Agbajoh Oliva,  Dorothy Ufot, SAN, Dr. Nechi Ezeako, Yinka Edu of Udo Udoma & Belo-Osagie, Yomi Audifferen of City Partners, and of course Conference Co-chairs, Gbenga Oyebode and Sergio Sanchiez Sole (from Barcelona), as well as several other participants from within and outside Africa.

The welcome cocktail was sponsored by commercial law firm, Udo Udoma & Belo-Osagie (UUBO).