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Well-balanced legal team committed to Africa
By Michael Avery, Without Prejudice, African Expansion series - July 2005
“It is important to nurture,” says Wangari Maathai, the 2004 Nobel Peace Prize laureate, “any new ideas and initiatives which can make a difference for Africa.”
Joe Whitfield and Julian Jackson, co-founders of Africa Legal understand the importance of new ideas. They established Africa Legal in November 2003 as the specialised Africa-focused division of Deneys Reitz. Whitfield, an English Solicitor and graduate of London University´s School of Oriental and African Studies, has lived in numerous African countries. His familiarity with Africa is emphasised by a long list of deals involving international clients in 19 countries across Africa.
The demand for specialised Africa-focused and centred law firm has developed from the recognition that Africa as an investment region is finally coming of age. That said, a string of past initiatives aimed at advancing Africa´s attractiveness to foreign investors has not always borne testimony to Africa´s potential. However, recent developments provide grounds for optimism.
The New Partnership for Africa´s Development (NEPAD), the Economic Community of West African States (ECOWAS) and the Common Market for Eastern and Southern Africa (COMESA) are all examples of a growing trend toward regional integration and a strengthening of interdependence between African countries.
Africa is currently the subject of extensive international debate, featuring high on the agenda at the forthcoming G8 summit in Scotland and the focus of UK Prime Minister Tony Blair´s Commission for Africa. The resulting matrix should allow Africa to benefit from globalisation by exploiting economies of scale and overcoming the limitations of market size.
If Africa Legal´s success serves as a measure of optimism for Sub-Saharan Africa, then it stands to reason that these initiatives are heading steadily in the right direction. “We started Africa Legal with no clients and were up to capacity within a short space of time,” explains Whitfield.
Africa Legal is a relatively new addition to the Deneys Reitz stable, but it has already achieved an impressive track record, as deals involving Barclays takeover of Absa, Aureos Capital, Rand Merchant Bank, and Globeleq (the fastest growing power company in emerging markets) illustrate. “While the South African market is extremely important (given the increasing activity of South African businesses throughout Africa), our main client base is international” says Jackson. “Our target clientele consist of banks, development finance institutions and other Multinational Corporations.”
According to Jackson, this is one reason that Africa Legal has two offices, in Sandton and London, both leading hubs for investment in Africa. “Our London presence shows our international clients that we have our fingers on the pulse of global commercial law and practice, while Johannesburg provides a natural entry point into the African markets. Many international companies choose Johannesburg as their gateway to their African operations”.
Johannesburg provides an entry point into the East, West and Sub Saharan Africa with the latter region presently offering the most potential for investors looking to do business in Africa. North Africa is geographically and dynamically different from the rest of Africa with a large part of this region being serviced directly from Europe or the East. Whitfield would like to see Africa Legal establish a footprint in the rest of Africa before venturing north in what is termed phase four of their planned expansion.
A third limb of their strategy is provided through the Africa Legal Alliance, a network of relationships with leading firms in ten African jurisdictions (with three more expected to join shortly). Whitfield stresses the importance of building relationships as the key to doing business in Africa. “Several opportunities exist but Africa is not an easy place to conduct business. You need to be culturally attuned to the different localities with an empathy and understanding of the local environment.”
Whitfield compares African expansion with Western Europe´s expansion into Eastern and Central Europe in the early 1990´s. Opportunities in the Eastern and Central European region - after the Berlin wall fell - were plentiful but many of those who rushed in ended up getting their fingers burned and those who were exceedingly cautious missed the bus altogether. However, venturing into Africa is not a simple case of fools and angels and the inherent risks can be mitigated.
Local due diligence is one of the most significant services Africa Legal tenders to clients. “It is often very tempting to take short cuts but deals have been lost in the absence of due diligence,” warns Whitfield “and local market practices can be very different.”
This affirms the importance of being prudent when searching for the right elements to develop a business in an emerging market and especially in Africa where processes taken for granted in developed markets are often noticeable by their absence. “Even conducting minor searches can prove to be a challenge” Whitfield cautions. “Analysis and guidance can be critical.”
Bureaucracy, local market practices, paucity of publicly available information, possible enforcement difficulties - all of these can make the investment process seem lengthy, expensive and unpredictable and can deter investors or encourage them to take short-cuts - often unjustifiably so.
Such rocky business terrain justifies the need for a legal Sherpa. Nevertheless, scaling the summit of Africa´s economic growth has the potential for serious reward. This is evidenced by Barclays´ return to South Africa through its recent offer to acquire a 60% stake in Absa, the largest retail bank in the country. Barclays is injecting R33b into South Africa´s economy - the single largest foreign direct investment in the country so far. Deneys Reitz and Africa Legal respectively acted as legal advisers and African legal advisers.
It is increasingly being acknowledged that investment in Africa comes with an obligation to uphold best international practice and social responsibility. This is a particular focus for Africa Legal, Whitfield having formerly served as General Counsel of the Commonwealth Development Corporation (now CDC Group Plc, Actis and Aureos Capital).
Africa Legal´s international combination of English solicitors, South African attorneys, and French and Zimbabwean qualified lawyers represent a well-balanced team committed to Africa. Under the measured guidance of Joe Whitfield and Julian Jackson new ideas and initiatives, which can make a difference for Africa, will be cultivated into high yield bumper harvests.
Written by Michael Avery and published in the July 2005 edition of Without Prejudice - African Expansion series.
Well-balanced legal team committed to Africa - in PDF format 
Africa Legal Team
The Africa Legal team includes English solicitors, South African attorneys, and French, Hong Kong and Zimbabwean qualified lawyers. All team members have extensive pan-African deal experience and share a special interest and expertise in Africa. Click on the names or faces of the team members to see their résumés.
