Focus On The Organization Of Business Law In Africa (OHADA)1 minutes de lecture

General Presentation of OHADA

OHADA was established by the Treaty on the Harmonization of Business Law in Africa (“OHADA”) signed on October 17th, 1993. 17(seventeen) States are members of the Organization for the Harmonization of Business Law in Africa: Benin, Burkina Faso, Cameroon, Central African Republic, Côte d’Ivoire, Congo, Comoros, Gabon, Guinea, Guinea Bissau, Equatorial Guinea, Mali, Niger, the Democratic Republic of Congo (DRC), Senegal, Chad and Togo. Most of them are French-speaking countries.

Mission and Target

OHADA’s mission is the harmonization of Business Law in Africa in order to guarantee legal and judicial security for investors and companies in its Member states. In this way, the Treaty’s main objective is to address the legal and judicial insecurity in Member States. Indeed, many investors, foreign and African companies or public partners of the continent often notice that “legal balkanization and judicial insecurity” were the key hurdles to the economic development of the continent.

On this way, in order to build a confident business relationship with investors, to promote or to boost trade between countries and enhance private sector development, the Organization works on the enforcement of economic laws and improves the functioning of judicial systems in the Member States.

Furthermore, the Treaty sets-up a safe climate for legal and judicial security. It is an important condition to attract an inflow of foreign investment.

The Benefits of OHADA is a business law harmonized area for investors

As economic globalization requires the harmonization of laws and legal practices, this kind of legal framework has many benefits for investors creating local firms or investing in companies in OHADA Members State’s.

Thus, the OHADA business area offers several assets for investors as:

  • the Mitigation of investments risks: considering that investment is in itself a risk, it would, therefore, be much difficult to attract investors if they have also to deal with an additional risk of legal norms that are changing and uncertain;
  • an Access to a unified legal and economic area composed of seventeen countries with almost the same business and economic rules;
  • a possibility to replicate easily a project developed in one of the Member State in another Member State because of a good knowledge of the legal framework applied to business;
  • a possibility of referrals to the Common Court of Justice and Arbitration based in Abidjan (Côte d’Ivoire) which is in charge of dispute settlement.