'Investment laws hinder capital inflows'

Published: 22 November 2013

FOREIGN investors are looking for flexible laws in African countries in order to realise profit and security for their investments, a legal officer said.

Presenting a paper entitled: "Unveiling the legal challenges affecting China-Africa investment relationship" at the just ended Forum for China- Africa Cooperation (Focac) 4th legal forum in Victoria Falls, Mr Adrian Ndunguru, a legal officer from Tanzania said:

"The current investment laws have rules with competing interests. Developing states wants to protect their economic development interests and the local investors by tightening investment laws while the investors are looking forward to flexible laws in order to realise profit and security of their investments. This results in a divergence in the partners' relationship like lack of common solutions to the investment legal barriers."

Mr Ndunguru said common legal barriers affecting China-Africa investments included cumbersome procedures for obtaining investment licences and procurement of goods.

"There are multiplicity of investment laws that is too many pieces of laws regulating investment which results into contradicting decisions, absence of procedures for settlement of disputes between foreign investors and citizens of the host country, imbalance between investors incentives and their obligations to the host country," he said.

Mr Ndunguru said there was need of designing regional investment legal framework which will provide for general principles guiding investors' obligations to the African host countries and their people.

He said Africa and China should learn that investment laws should focus on cooperation than defensiveness in order to facilitate closer relationships between the two partners.

"This approach will enable the two partners merge their interests and come out with common goals in making and enforcing the investment laws.

The current investment laws needs to be reviewed to eliminate the non- tariff barriers to enhance the two partners relationship," he said.
- chronicle