Business
Come on into Africa. The Water is actually Nice.
I then asked: What kind of conventional wisdom would Greenberg Traurig want African countries to know? And at the same time, what would they like
American companies to have insight into if they are going to do business in sub Saharan Africa? I was also curious as to what these two would prioritize in terms of doing better business with the U.S.?
Vicky: I think one first has to start at the government level and that means really reforming sectors to ensure that there are clear corporate guidelines then also talking to the banking sector to shore up African companies so that they are equipped to engage with U.S. companies. These are two of the most important things that can be done that will impact the broader market. Alternatively, a lot of the work that corporate law firms like ours do is corporate sector and government influence. I think transparency in terms of the actual corporate process of establishing companies – the ease with which foreign companies can come in and establish relationships with local partners – some way for foreign companies to come in and test legitimacy, veracity or wherewithal is key.
For example, in the U.S., if you want to work with a company, you can go to any state’s website and do a corporate search and get information about when they were formed – depending on the state – who their directors and officers are; what their registered shared capital is, you can get a certificate of good standing confirming that they have paid all their taxes.
That process is not as transparent and as easy in any African country, with South Africa being the exception. For example, we have an on going issue where local counsel has to fly to the capital city of the country to get a copy of the corporate record – and this slows down the efficiency with which you can do a deal. Because you want to know that a company is abiding by all corporate requirements because that impacts your ability to do anything – a loan, a sale transaction, purchase – all those things are affected by having good corporate governance. These are the requirements needed for people to independently test the company.
Aron: Here, I’d call for an increase in the transparency with which corporate formalities are recognized, governed and then, I’d ensure that there’s good legal representation in both sides of the table – identifying with and putting things like risk into context – like the appropriate provisions and agreements in understanding that these are binding.
One of the reasons there’s such push back with respect to using the governing law of most African countries is that there’s just not enough clarity in
terms of what remedies could be down the line.
Dennis: So, are we, ostensibly talking about doing things the African Way, and making certain exceptions. Here, both Vicky and Aron laughed.
Vicky: On some level, this is true – meaning if we have to get on a plane more often than you normally would, then you are doing things the African way – Or you could do things via electronic ways. But there’s a different level of building relationships that is required in the African context that we are not used to here in the States – and one needs to get over that. And that is doing it the African way.
