The recent glittering gala dinner for the International Lawyers for Africa (Ilfa) programme at the Law Society was perhaps the clearest indicator of the importance of Africa in the international strategies of City firms and their clients.
More than 200 solicitors, barristers and general counsel attended the dinner, marking the end of the three months that African lawyers from 10 jurisdictions
spent on UK internships and training programmes sponsored by participating firms.
Guest of honour Dr Mo Ibrahim, telecoms mogul and founder of the Mo Ibrahim Foundation, expressed his surprise and delight at the sheer number of English firms and in-house departments that were participating in the Ilfa programme.
The event also marked the end of a year in which the Law Society saw an unprecedented rise in interest in Africa, both from firms and from legal departments of multinational companies looking for new markets.
Firms across the City have been quick to lay out their Africa credentials with seminars and conferences featuring high profile speakers and establishing internal Africa groups.
But what has brought about the sudden interest and is it as sudden as it appears?
Interest in Africa’s emerging economies has been growing from both sovereign and private investors, driven by surging commodity prices, inward investment flows, increased macroeconomic stability and strengthened governance.
The diversification of export products and trade partners to include dominant global players such as China, India, South Korea, Singapore, Malaysia and Brazil has also contributed to the recent economic growth and equipped Africa to respond robustly to the financial crisis. Today, around 40 per cent of African exports go to
emerging markets, particularly Asian ones.
Although the growth rate of African economies has slowed down due to the knock-on effects of the global recession, over the past few years the rise of the banking and insurance sectors, the unprecedented growth in the telecoms sector and the political stability in many countries have transformed the African landscape.
Other growth factors in Africa include improved macroeconomic management, greater commitment to economic reforms, increased private capital flows, debt relief and increasing non-fuel exports. A decline in political conflicts and wars and a rise in peaceful changes of government in many parts of the continent have also made a contribution to investor confidence despite growth and performance varying across countries and regions.
Earlier this month at the China-Africa summit, the Chinese government pledged $10bn (£6.11bn) in loans to various African countries over the next three years, which is expected to be invested in badly needed infrastructure that will transform the speed and efficiency of doing business on the continent and boost economic development.
African economies were forecast to grow by an average of 6.2 per cent in 2008 after a strong 2007, but a report by the Organisation for Economic Cooperation and Development (OECD) earlier this year predicted that Africa’s economic growth will be cut in half in 2009 as the continent struggles with the economic downturn. Growth is expected to rise by up to 4.5 per cent next year. However, improvements to infrastructure, health and education remain critical to Africa beating the downturn.
According to the OECD, East Africa is expected to see growth rise by 5.5 per cent. In the more diversified countries such as Tanzania and those heavily reliant on agriculture such as Rwanda and Burkina Faso, growth is expected to continue at 6 per cent or more.
With the growth of these sectors comes the need for professional expertise to support their development. Legal services are an essential part of the development of these sectors in Africa and critical to their success.
Nigeria remains the most attractive market in Africa for legal services, and with recent reforms to its banking and shipping sectors, investment in infrastructure and the anticorruption drive, investors continue to look to Nigeria for their goods and services. This in turn creates opportunities for law firms.
The Nigerian profession itself has seen the advantages of reaching out to the international firms to capitalise on the potential opportunities of collaboration. Last month the Law Society welcomed the first legal services trade mission from Nigeria, with 20 of Nigeria’s top law firms looking to build partnerships with English firms and boost their profiles on the international legal services scene.
Beyond Nigeria, the explosion of Angola and Ghana on to the hydrocarbon scene cannot be ignored. Angola’s economy has moved from 25 years of conflict to becoming the fastest growing economy in Africa and one of the fastest in the world. Angola overtook Nigeria as the leading oil producer on the continent in 2008 and continues to attract billions of dollars in foreign investment, much of which is in infrastructure and the oil and gas sectors.
Ghana has taken a much more cautious approach to exploiting the new energy resources recently discovered off its shores, but with its stable government and steady economic growth, it is already attracting the interest of UK firms, some of whom went on a Law Society trade mission to Ghana last September.
Africa has a lot to offer solicitors from England and Wales. Although its economies have invariably taken a hit from the credit crisis, the outlook remains strong. As the world recovers from the impact of the recession, African economies are likely to be in an even stronger position if they take advantage of their best-performing sectors now.
Also, the opportunities for collaboration between UK and African firms have never been greater, with benefits for both ranging from skills transfer to increased local knowledge. In his keynote speech at the Ilfa dinner, the Attorney General of Lagos State, Supo Shasore, threw down the gauntlet to the participating African lawyers and their host firms to consider their contribution to economic and social development and how their partnerships can harness the best resources for legal development and economic growth. The link between the two is obvious and the time, it appears, is now.
Nankunda Katangaza is policy manager (Africa, Middle East, South and South East Asia) in the international department of the Law Society