Mkapa counsels African govts to make use of Investment Climate Facilit

06Sep 2016
The Guardian Reporter
The Guardian
Mkapa counsels African govts to make use of Investment Climate Facilit

AFRICAN governments have been challenged to use the support given by the Investment Climate Facility for Africa (ICF) to resolve commercial disputes quickly and efficiently.

Prime Minister, Kassim Majaliwa (L) shaking hands with Investment Climate Facility Co-Chair, Neville Isdell while former President Benjamin Mkapa (C) looks on during a ceremony to unveil nine years of ICF operations in Africa held in Dar es Salaam last week.

Former President Benjamin Mkapa who is also Co-Chair of ICF said in Dar es Salaam last week that among other things, the Dar es Salaam based institution was established to make African countries competitive in embracing private investment.

He pointed out that if governments will improve the investment climate or facilitate businesses to operate smoothly, the private sector will have confidence to engage in commercial activities.

“Despite the great job that we have done as ICF, it really depends upon African governments to execute an efficient and effective dispute resolution mechanism.

If they continue with the attitude of unfriendly treatment of the private sector, they are not going to move,” he warned when addressing stakeholders at a ceremony to mark nine years since ICF’s establishment.

Over the nine-year period, ICF has executed 73 projects in 36 African countries, creating nine commercial courts in Rwanda, Burkina Faso and Sierra Leone. The purpose was to facilitate the early determination of commercial disputes.

Mkapa warned that if governments realise that there is quite a bit of legitimate room for private sector, they should learn from what ICF has done.

According to him, if various countries in Africa are serious about commercial disputes, they can go to Rwanda and see the steps that were taken to establish commercial courts there, including the training of judges to sit on the bench of such courts.

He noted that various countries can learn from Rwanda as a point from which to learn if they are serious about reforms.

“Rwandans have benefited from the ICF because they were alerted and were careful in their implementation of commercial disputes resolutions,” Mkapa who served Tanzania between 1995/2005 noted.

The former President stated that they made a revolution in the cargo handling at the port in Senegal because the government recognised that there was a bottleneck, adding that they mobilised the resources in terms of knowledge, experience and also finances to get them going.

“Now, Senegal has one of the most efficient ports in Africa in Dakar,” the ICF Co-Chair stressed.

He emphasised the need for African governments to create a better business environment for the private sector so that companies can generate domestic revenue to help alleviate poverty and boost development.

ICF support sought to address a long-standing criticism that commercial arbitration in India is a long-drawn and tedious process by providing tenets for time-bound adjudications.

Although more and more companies in Africa are opting for the arbitration route to settle their disputes, the number of such cases being resolved in Africa as the preferred seat has not increased substantially, experts say.

Chief Executive Officer of ICF, William Asiko outlined challenges they faced in executing projects in Africa in the past nine years including human capital and financial resources.

“Reforms require resources both human and financial. Some countries have no human resources to implement reforms,” he said.

Asiko stated that ICF in its nine years existence has enabled revenue authorities across Africa to make it easier to collect taxes, also to make it easier for taxpayers to know how much tax they need to pay.

He however noted that there is still scope for developing awareness about Alternative Dispute Resolution (ADR) mechanisms to avoid full-scale court procedures.

It is critical for local and foreign investors in Africa to be able to rely on systems for resolving disputes that are alternative to the local court.

It is important for and in the interest of Africa as well as businesses to create arbitration capacity locally otherwise disputes may be attracted to courts or arbitrations outside Africa and the region in the countries of foreign investors.

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