Commencement of the AfCFTA. The landmark African Continental Free Trade Area (AfCFTA) is slated to go into force on July 1, 2020. When fully implemented, the trade agreement will eliminate tariff and non-tariff barriers, and substantially increase intra-regional trade to volumes worth over $3.3 trillion. Twenty-nine countries have deposited their instruments of ratification, and Eritrea remains the only African Union member state that has not signed the agreement. We will be watching the role that technology will play in lifting traditional barriers to entry and accelerating the creation of a well-diversified and inclusive regional value chain. This is especially true for the ease and transparency enabled by e-commerce and the growing trade in digital services.

Increasing the Bankability of Projects in Africa. One of the key issues on the continent in 2020—and in the decade ahead—that we will be watching is the need to increase the bankability of infrastructure projects in Africa. Critical to this effort is the need for development finance institutions (DFIs) and commercial banks to work together more cohesively to deliver innovative solutions for the continent. Consider the launch of the Africa Greenco project in Zambia. This project is designed to introduce a credit enhanced special purpose vehicle (SPV) to act as an intermediary power purchaser from independent power producers (IPPs) in the energy renewables sector, so that the direct risk of IPPs and lenders to national electricity companies is mitigated. This involves DFIs and commercial banks assuming different risk allocations in the SPV and adopting innovative strategies to manage their exposure to the relevant national electricity company. We will also be watching the continued development of standardization, most notably with the International Finance Corporation (IFC)’s Scaling Solar project (recently extended from Zambia to Togo) and KfW’s Global Energy Transfer Feed in Tariff (GET FiT) Programme, together with the standardization of documentation and regulation in other business sectors.

Additionally, as the global movement on climate change gathers momentum and issues of responsible sourcing come to the fore, we will be watching to see if there is a greater emphasis placed on Environmental Social and Governance (ESG) compliance in financing transactions with liability (for lenders and borrowers alike) for noncompliance. We expect that even more finance will go towards clean energy with financial institutions and governments committing more funds towards the achievement of the 7th (Clean Energy) and the 13th (Climate Action) United Nations sustainable development goals (SDGs). In the context of the African Continental Free Trade Area (AfCFTA) agreement, we expect to see an increase in the financing of transport infrastructure, particularly in connecting neighboring countries and regional trade corridors as more countries ratify the AfCFTA. There may well be an upswing in the financing of soft commodities on the back of reduced barriers to intra-Africa trade, which many hope will open up new markets closer to home for many of Africa’s agri-economies.

Climate Change. The 2019 UN Climate Change Conference COP 25 failed and Africa has the most to lose. Though Africa accounts for less than 4 percent of carbon emissions globally, it is extremely vulnerable to climate change scenarios above 1.5 degrees Celsius. The continent is vulnerable because Sub-Saharan Africa has 95 percent of rain-fed agriculture globally, and agriculture accounts for a large share of the region’s GDP and employment. In fact, the two most extensive land-based end-of-century projected decreases in rainfall occur over Africa: one over North Africa and the other over southern Africa. Finally, the capacity of African nations to adopt to climate change is relatively low given the effects of poverty, which reduces choice at the individual level. At COP 21 in 2015, parties resolved to mobilize USD 100 billion per year by 2020 to address the needs of developing countries. They also agreed to set a more ambitious financing target prior to 2025. We will be watching the investments made by industrialized countries to mitigate the most harmful effects of climate change in Africa.

Aligning Africa’s Digital Transformation Strategy with Enabling Regulations. The African Union Commission (“AU”) has put forward a bold vision to build a Digital Single Market in Africa by 2030. The Draft Digital Transformation Strategy for Africa (2020-2030) identifies specific actions to achieve this vision. Specifically, adoption of an AU convention on Cyber Security and Personal Data Protection is a top priority for this year. To achieve this, policy and regulatory reforms need to be harmonized across a widely diverse group of Member States with vastly different priorities. We will be watching these trends to determine whether advances in computing capacity, storage, and the protection of digital data help to build a vibrant digital ecosystem that accelerates economic integration and the development of the continent. We will also be watching to see if the regulations result in excessive costs, compliance requirements, and related barriers for African entrepreneurs and businesses.

Business and Human Rights. For companies doing business in Africa, there are three areas deserving of attention in the business and human rights space in 2020: (1) compliance with existing and emerging regulations, (2) enhanced due diligence in light of an increased number of enforcement actions related to forced labor, and (3) risk mitigation in view of creative lawsuits. As we reported in December 2019, the global regulatory and enforcement business and human rights landscape is evolving rapidly. A plethora of national and regional initiatives have emerged which require companies to either report on their human rights compliance measures or conduct substantive human rights due diligence in relation to their global supply chain, or both. Many companies doing business in Africa are subject to regulations like the California Transparency in Supply Chains Act, UK and Australian Modern Slavery Acts, and the French Duty of Vigilance Act, and must ensure compliance with these regulations.

In regard to enforcement actions, we saw a significant uptick in 2019 and expect to see additional enforcement actions in 2020. The United States Customs and Border Protection (“CBP”), for example, has significantly ramped up enforcement of the forced labor prohibitions contained in Section 307 of the Tariff Act of 1930. Whereas only 32 Withhold Release Orders (“WROs”) (which effectively seize goods destined for import into the United States) were issued in the more than 50 years between 1953 and 2015, 13 have been issued in the last four years alone, including seven in 2019. Recent actions taken to block imports from Africa include regional bans on gold mined in artisanal small mines in eastern Democratic Republic of the Congo (“DRC”), rough diamonds from the Marange Diamond Fields in Zimbabwe, and all tobacco from Malawi.

Finally, companies doing business in Africa must be cognizant of the creative human rights lawsuits being filed around the world. For example, lawsuits have been filed in the U.S. based on novel theories of companies aiding and abetting child labor. In the UK, a claim has been filed on behalf of children and parents from Malawi against British American Tobacco alleging unjust enrichment based on the harvesting of tobacco leaves for little compensation.

Anti-Corruption/Compliance: In 2019, we saw continued international anti-corruption enforcement efforts focused on conduct in Africa, including high-profile U.S. prosecutions of individuals involved in Mozambique’s “Tuna Bonds” scandal, UK Serious Fraud Office investigations in the mining sector, and an investigation by Norwegian authorities into the so-called “Fishrot Files” matter in Namibia. We also continue to see increased enforcement activity on the domestic front. For example, in Angola, we saw the first conviction for graft of a senior official under Angola’s president João Lourenço, with the sentencing of the former Transport Minister to 14 years in prison for charges of corruption and embezzlement of state funds. In South Africa, as the “State Capture” inquiry grinds forward, at the end of 2019 we saw a spate of high-profile arrests, some in connection with alleged bribery at state-owned enterprises.

Along with this trend of cross-border enforcement and local authorities stepping up enforcement efforts, we see continually heightening expectations from enforcement authorities for corporate compliance programs. Against this backdrop, we believe that companies operating in Africa should be carefully considering the business case for investing in their compliance programs and taking proactive steps to mitigate compliance risk.

Elections. There are 12 major presidential and parliamentary elections on the continent this year: Burkina Faso, Burundi, Central African Republic, Comoros, Côte d’Ivoire, Ethiopia, Ghana, Guinea, Niger, Tanzania, Seychelles, Sudan, and Togo. Given the anticipated impact on foreign investment, opportunities for positive economic growth, and fears of destabilization and international interference, we are paying special attention to Ghana, Côte d’Ivoire, Tanzania, Central African Republic, and Ethiopia. Ghana is a stable democracy and key to economic growth in West Africa. Though President Nana Akufo-Addo’s face-off with former president John Mahama appears to be a close race, Akufo-Addo’s incumbency and track record on positive economic growth may offer him an advantage. In Côte d’Ivoire, it is unclear whether President Alassane Ouattara will seek re-election (as he has until July to make his decision), but if he declines to run or is defeated, the country will experience its first transfer of power since the 2002-04 civil war. In Tanzania, although Magufuli’s party, Chama Cha Mapinduzi, has been in power longer than any other political party on the continent, Magufuli’s socially conservative laws and alleged human rights abuses may give room for opposition presidential candidate Edward Lowassa to make the election competitive. The control of rebel groups in Central African Republic has caused President Faustin Touadéra to seek military relief from Russian mercenaries. That, along with recent Russian disinformation election tactics in Africa, may affect CAR’s elections. For Ethiopia’s parliamentary elections, Prime Minister Abiy Ahmed’s democratic reform agenda is expected to increase economic growth and greater inclusive development as the country undergoes a number of political and legal reforms.

Trump Administration’s Policy: Russia, China, the UK, the EU, India, Turkey, and other nations are working hard to unlock Africa’s commercial potential. Last year the Trump Administration rolled out an Africa policy built around promoting more U.S. investment on the continent. The key pillars of the policy are Prosper Africa and the new U.S. Development Finance Corporation (“DFC”). We will be watching the implementation of both of these initiatives. Prosper Africa promises “deal teams” that will help American companies with everything from market intelligence to identifying potential local partners. The DFC was created to make equity financing available for projects that have a developmental impact. We will be watching how the Trump Administration implements Prosper Africa and the new DFC in support of U.S. companies in Africa.

 

 

 

Photo of Benjamin Haley Benjamin Haley

Ben Haley leads the firm’s White Collar and Anti-Corruption Practice in the Middle East and Africa and is a chair of the firm’s broader Africa Practice. With deep experience representing clients before regulators in high-profile white collar and disputes matters and a history operating on…

Ben Haley leads the firm’s White Collar and Anti-Corruption Practice in the Middle East and Africa and is a chair of the firm’s broader Africa Practice. With deep experience representing clients before regulators in high-profile white collar and disputes matters and a history operating on the ground in emerging markets, he helps clients assess and mitigate a wide range of complex legal and compliance risks.

Complementing his investigations and dispute resolution practice, Ben has a broad-based compliance advisory practice, helping clients proactively manage compliance risk in areas including anti-corruption, trade controls, anti-money laundering, fraud, and data privacy.

Ben represents corporate and individuals clients in a wide range of investigations and disputes, including:

  • Investigations under the U.S. Foreign Corrupt Practices Act (“FCPA”).
  • Investigations into anti-money laundering, financial crimes, anti-terrorism, and sanctions and export control issues.
  • Securities fraud and accounting matters.
  • Board investigations and shareholder litigation.
  • Insurance recovery.

Ben also regularly advises clients on a range of regulatory compliance and corporate governance issues. His compliance advisory practice includes:

  • Performing risk and compliance program assessments.
  • Leading compliance reviews on business partners and assisting companies with third-party risk management processes.
  • Conducting forensic accounting reviews and testing and enhancing financial controls.
  • Advising on market entry, cross-border transactions, and pre-acquisition diligence and post-acquisition integration.
  • Assisting companies in designing, implementing, and maintaining best-in-class compliance programs.

In recent years, Ben has steered a number of clients to successful resolutions and declinations in complex FCPA and corporate fraud matters with the U.S. Department of Justice and Securities Exchange Commission. In his advisory practice, Ben has served as lead compliance counsel on a number of major M&A and investment transactions. He has developed special expertise assisting clients in leveraging technology in their compliance programs, including assisting one of the world’s largest consumer goods companies in the design and implementation of an award-winning compliance data analytics and monitoring system.

Ben has been described by the Chief Compliance Officer of one of his clients as “[a]n outstanding senior lawyer and advisor,” and “a guiding light for all things compliance advisory in Africa,” whose “advice is crystal clear, covers all angles and is business friendly.”

Photo of Sarah Bishop Sarah Bishop

Sarah Bishop is a U.S. and UK-qualified lawyer who advises companies on ethics and compliance programs, compliance with anti-corruption and anti-money laundering laws, business and human rights (BHR) and environmental, social, and governance (ESG) matters, white collar investigations, and suspension and debarment.

Sarah’s…

Sarah Bishop is a U.S. and UK-qualified lawyer who advises companies on ethics and compliance programs, compliance with anti-corruption and anti-money laundering laws, business and human rights (BHR) and environmental, social, and governance (ESG) matters, white collar investigations, and suspension and debarment.

Sarah’s compliance advisory practice includes helping multinational corporations develop and test the robustness of ethics and compliance programs, conducting risk assessments, conducting transactional and third party due diligence, supporting post-acquisition compliance integration projects, and delivering compliance training. She has particular expertise advising on the U.S. Foreign Corrupt Practices Act (FCPA) and UK Bribery Act and has advised companies in the energy, mining, pharmaceutical, healthcare, technology, and consumer goods sectors, among others, on anti-corruption compliance risks and program development.

As a member of Covington’s Business and Human Rights practice group, Sarah advises companies on the developing legal and enforcement landscape related to the corporate responsibility to respect human rights. She advises on enforcement risks under Withhold Release Orders (WROs), the Uyghur Forced Labor Prevention Act (UFLPA), and the Trafficking Victims Protection Reauthorization Act (TVPRA) in the United States, as well as developing ESG due diligence and reporting requirements in Europe. Sarah has helped multinational corporations in the healthcare, technology, automotive, energy, mining, and consumer goods sectors develop human rights due diligence programs, navigate human rights-related enforcement matters, and report on human rights due diligence efforts.

Sarah has extensive experience conducting internal and government-facing white collar investigations. Sarah has conducted investigations involving allegations of bribery, money laundering, export control and sanctions violations, fraud, human rights violations, and other forms of misconduct. She has handled matters before major international enforcement authorities and has been recognized in the Global Investigations Review Women in Investigations survey.

Sarah also assists clients in suspension and debarment matters before the World Bank and other international financial institutions.

Photo of Mosa Mkhize Mosa Mkhize

Mosa Mkhize is a policy advisor and leads the firm’s Africa Public Policy Practice. Drawing on her experience both in government and in various roles in the private sector, Mosa provides strategic policy and regulatory advice to clients doing business with and across…

Mosa Mkhize is a policy advisor and leads the firm’s Africa Public Policy Practice. Drawing on her experience both in government and in various roles in the private sector, Mosa provides strategic policy and regulatory advice to clients doing business with and across Africa. Mosa does so by leveraging close to two decades of experience in international trade, public policy and government affairs.

Mosa assists clients on a broad range of issues including advocacy, strategic policy, regulatory, and dispute resolution advice in various sectors, including technology, energy and life sciences. In addition to this, Mosa’s capabilities include building strategic relationships and coalitions in support of smart technologies. Furthermore, she is currently working with government officials, private corporations, academia, and the general public on the development of regulations and policies that will bring about an enabling environment for digital transformation and economic growth in Africa.

Photo of Deon Govender Deon Govender

Deon Govender is a vice chair of the Africa Practice Group. He focuses his practice on project development and corporate and project finance transactions across Africa, with particular emphasis on southern Africa. His experience ranges from advising on the development and financing of…

Deon Govender is a vice chair of the Africa Practice Group. He focuses his practice on project development and corporate and project finance transactions across Africa, with particular emphasis on southern Africa. His experience ranges from advising on the development and financing of renewable energy and thermal power projects and various other infrastructure assets in the transportation and telecommunications sectors. Deon’s experience additionally includes advising on financing independent power producer projects under the South African government’s Renewable Energy Independent Power Producer Procurement Programme.

Photo of Hannah Edmonds-Camara Hannah Edmonds-Camara

Hannah Edmonds-Camara advises on a range of both international and domestic employment issues including drafting and implementation of policies and compliance programmes, international employment aspects of global transactions and contentious employment matters.

She also has particular expertise in helping businesses navigate the evolving global…

Hannah Edmonds-Camara advises on a range of both international and domestic employment issues including drafting and implementation of policies and compliance programmes, international employment aspects of global transactions and contentious employment matters.

She also has particular expertise in helping businesses navigate the evolving global regulatory and best practice landscape surrounding the corporate responsibility to respect human rights. Her experience includes advising on: the development and implementation of global human rights due diligence and ethical sourcing compliance programmes, including in response to pressure from NGOs, investors and regulators; human rights due diligence in an M&A context; global risk assessments; transparency and reporting requirements; design of project-specific human rights frameworks and stakeholder engagement strategies; assessment of downstream human rights risk; and conflict minerals compliance.

Hannah gained valuable experience while on secondment to a large pharmaceutical client. She is a member of the firm’s Diversity Committee, Public Service (pro bono) Committee, and Africa Initiative.

Photo of Ahmed Mokdad Ahmed Mokdad

Ahmed Mokdad is an associate based in the Johannesburg office, and a member of the firm’s White Collar Defense and Investigations and Anti-Corruption Practice Groups, as well as the Privacy and Cyber Security Practice Group. With a depth of experience representing clients across…

Ahmed Mokdad is an associate based in the Johannesburg office, and a member of the firm’s White Collar Defense and Investigations and Anti-Corruption Practice Groups, as well as the Privacy and Cyber Security Practice Group. With a depth of experience representing clients across various sectors, Ahmed regularly assists clients navigate and mitigate a broad spectrum of regulatory and compliance risks.

Ahmed’s investigations practice includes internal and government investigations into anti-corruption, anti-money laundering, fraud, and financial crimes matters more generally. Complementing his investigations practice, Ahmed has a broad-based compliance advisory practice in these areas and in data protection and information security matters. This includes assisting clients in numerous sectors with compliance under South Africa’s Protection of Personal Information Act (POPIA).

Adding to his investigative, regulatory and compliance advisory experience, Ahmed has extensive experience advising on numerous M&A and complex financial transactions. He has also been involved in several high profile international arbitrations, and litigious matters before the South African courts relating to, among other things, commercial and tax disputes, exchange control violations, government procurement irregularities, and defending white collar crimes. This experience gives Ahmed valuable perspectives and insights when advising on compliance advisory matters.

For international clients facing compliance issues cutting into Africa, Ahmed regularly advises on a range of issues that can arise in such context, e.g., labor and employment considerations, legal professional privilege, whistleblower protections, corporate governance reporting obligations, and control processes and protocols for engaging with government and law enforcement agencies. Ahmed is recognized by clients for providing practical advice and solutions on complex legal issues in ambiguous statutory regimes.