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Regis SIMO Bocconi University, Milan, Italy African Economic Conference1.

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Presentation on theme: "Regis SIMO Bocconi University, Milan, Italy African Economic Conference1."— Presentation transcript:

1 Regis SIMO Bocconi University, Milan, Italy African Economic Conference1

2 Outline Introduction OHADA as New L&D in Africa OHADA as an Instrument of RI in Africa Conclusion 2

3 Introduction Doing business in Africa until recently was associated with high risks – a voyage to the unknown One of the identified problems was that of outdated laws – unsuitable for business Hence the need for a law reform to cope with the challenges of the globalisation of markets (with the goal of attracting investments) 3

4 OHADA is conceived as a tool for the development of the continent and as an instrument of regional integration in Africa 4

5 II. OHADA as New L&D in Africa A. The situation before OHADA B. The rationale for a new law C. Testing OHADA against law and finance theories – new law and development revisited 5

6 A. The situation before OHADA A feeling of lawlessness in the jungle of outdated laws Three levels of diversity Coexistence between informal and formal laws Intra-African diversity Between African legal systems and colonial laws 6

7 B. The rationale for a new law 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 business in Africa – viewed as indispensable for the development of the continent The objective 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 [Art. 1 of OHADA Treaty] 17 members (as of today) 7

8 C. OHADA and Law & Finance OHADA uniform legislations are civil law-based (modelled on French law) – criticised as non pro- development by law and finance theories The overall legal origin theory tends to show that countries based on (French) civil law perform less(er) in the business arena in terms of investments attractiveness and domestic businesses development 8

9 III. OHADA as an Instrument of RI in Africa The OHADA also aims at using harmonisation of business law as an instrument to reinforce legal and economic 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 9

10 A. Institutions Article 3 of OHADA Treaty establishes five institutions Council of Ministers is the highest decision-making body of the Organisation – the legislative and regulatory organ of OHADA Common Court of Justice and Arbitration (CCJA) - is the judicial body of OHADA (and its also an arbitration centre) Permanent Secretariat is a permanent body of (headed by a Permanent Secretary and independent from Members States, this organ discharges administrative duties Higher Regional Training School for Legal Officers is in charge of training judges and other legal officers on OHADA law and is also entrusted with the mission of research in business law Conference of Heads of States and of Governments is the new institution created by Article 3 of the Revised OHADA Treaty. It is a political forum presided over by the Head of State or of Government whose State is also chairing the Council of Ministers 10

11 B. OHADA and African Economic Integration In this increasing globalising world, regional economic integration appears as preparatory steps – or building blocks in trade parlance – towards multilateral liberalisation 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 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 11

12 C. OHADA Law making process OHADA harmonises 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 12

13 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 UAs enter into force ninety (90) days after their adoption unless a particular UA provides otherwise Pursuant to Article 10 of OHADA Treaty, UAs are of a supranational character – 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 of the inconsistent with the UAs concerned) Judicial uniform interpretation of the Treaty, UAs and other Regulations is ensured by the CCJA 13

14 IV. Conclusion 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 legislation In order to build confidence and trust in 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 Open to all African Unions Members, it can be hoped that it will really serve the purpose of RI on the continent when it attracts adherence of other non-civil law countries 14

15 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) fora Obstacles of OHADAs role as facilitator of economic integration remain present in (a)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 (b)the resistance by other African countries who are afraid of a sort of contamination of their laws by civil law 15

16 Contact: 16

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