THERE is no evidence to prove bilateral investment treaties signed by African countries have made them more attractive to foreign direct investment, despite it being the main reason to sign them, WRITES DIANNA GAMES.
The private sector tends to be the main beneficiary of treaties, with governments weakened by a lack of negotiating capacity.
These are among the findings of an Economic Commission for Africa report looking at issues about, and the consequences of, investment policies and bilateral investment treaties. The report was launched at the African Development Week in Addis Ababa. The decision to do the research was based partly on pressure from SA, which has terminated its bilateral investment treaties, replacing them with legislation that makes the government the guarantor of investments in the country.
SA came under fire from many of its key trading partners for the move but, going by the discussion at the report’s launch a fortnight ago, held under the auspices of the commission and African Union, there is wide support in Africa for a change in the terms of engagement with international investors.
Africans have, over many years, used these treaties to attract investors to opportunities in their countries in a move to counter perceptions of the risk they faced in these markets.
Collectively, Africa has the highest number of such treaties globally — more than 1,000 — mostly with non-African nations.
But the report suggests that Africa has been short-changed, exploited by more developed countries that have been able to influence bilateral terms of engagement by allowing their high-powered and experienced legal teams to outmanoeuvre their less experienced African counterparts easily. Read more ...
- Published in Business Day SA, 11 April 2016.