4 April 2011

The scramble for Africa

"There's no country where there's no development required in Africa."
(Source: Lawyer)trackingLegal work in Africa is no longer just about infrastructure projects. Joanne Harris discovers a continent where natural resources, telecoms and finance are helping create a land of plenty
A number of repeated themes emerge when lawyers get talking about Africa: natural resources, development and the rise of the middle class are all topics that come up again and again.
But those working in Africa are also keen to stress something else.
"At the risk of stating the blindingly obvious, it's a bloody big place," remarks Nicholas Buckworth, head of the project finance group at Shearman & Sterling.
Mass markets
Africa is the world's second-largest continent, with a combined population of more than a billion people spread throughout 54 countries, including the world's newest independent state, Southern Sudan. Therefore, although most Anglo-Saxon law firms market themselves as having 'Africa practices', the breadth of work included in each varies widely from firm to firm.
"It's a tremendously diverse place," explains Anthony Giustini, co-head of Clifford Chance's Africa group. "You can't compare the type of business you'll do in smaller countries on the continent to the type of opportunities there are in Nigeria or South Africa. Firms are going to need to look over the whole continent and pick and choose where they're going to devote their efforts."
But it is worthwhile putting that effort in.
"The continent boasts an abundance of riches," notes a recent report by consultants McKinsey, "including 10 per cent of the world's reserves of oil, 40 per cent of its gold and 80-90 per cent of the chromium and platinum group metals.
"Demand for raw materials is growing fastest in the world's emerging economies, which now account for half of Africa's total trade.
"As trade patterns have shifted, African governments are forging new types of economic partnerships, in which buyers from these countries provide upfront payments, make infrastructure investments and share management skills and technology. "Foreign direct investment in Africa has increased from $9bn [pound 5.6bn] in 2000 to $62bn in 2009 - almost as large as the flow into China when measured relative to GDP."
The report predicted that, by 2030, Africa's top 18 cities could have a combined spending power of $1.3tr. It said the unmet infrastructure needs of the continent required "at least $46bn more in spending per year".
Cash call
Lawyers say these needs and the way they are currently being met (or not) are evident on the ground.
"There's no country where there's no development required in Africa.

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