Regional Integration in Africa through the Harmonization of Laws

Poverty is the most important public policy issue for all countries in Africa today. One way to confront that problem is to provide each African economy with a robust private sector that can create the wealth that is needed to deal with poverty and significantly improve the living conditions of its citizens. Creating a domestic environment that enables investment – both domestic and foreign – requires, at the very least, that the economy be provided with a set of institutional arrangements that guarantees the rule of law. Such a legal regime must (i) adequately constrain state custodians (i.e., civil servants and politicians) so that they cannot act with impunity and engage in growth-inhibiting behaviors (e.g., corruption and rent seeking); (ii) provide mechanisms for the peaceful resolution of conflict in order to enhance effective management of ethnic and religious diversity; and (iii) create an enabling environment for entrepreneurial activities. An important characteristic of an enabling environment for wealth creation is that the law enables and does not constrain entrepreneurial activities. Law is expected to improve the security of property rights (protects the investor’s principal and the earnings derived from that investment), minimize the risk associated with investment (especially “long-term investment”) and pave the way for more mutually beneficial trade and exchanges.