2024 DALAS Law Dinner Themed: Legal Practice & Investments In Sub-Saharan Africa: Challenges And Prospects

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SPEECH DELIVERED BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, IMMEDIATE VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA AT THE 2024 DALAS LAW DINNER THEMED: LEGAL PRACTICE AND INVESTMENTS IN SUB SAHARAN AFRICA: CHALLENGES AND PROSPECTS, DUOLA, CAMEROON ON THE 9TH OF NOVEMBER 2024

Protocols

It is a true honour to join you at this 2024 DALAS Law Dinner. I am grateful to my brother, President Mbah Eric Mbah, the Executive and the entire membership of DALAS for the kind invitation to be your guest speaker today. And I must say that this is also a wonderful opportunity for a reunion with some of my classmates and friends from our days at the University of Lagos 49 years ago!

This year will be 46 years since we graduated, my brothers, Ngalle Monono, Beltha Epie Sume, Ikomi Ngongi. Just a year ahead of us was the legendary Mrs. Lucy Asuagbor, as she then was, who as you know, later became the President of the Court of Appeal, and she was the first person ever to obtain a First Class in Law at the University of Lagos.

I have chosen to speak on some aspects of the theme: Legal Practice and Investments in Sub-Saharan Africa: Challenges and Prospects.

Our world is changing very quickly, sometimes faster than we notice or can cope with. It took 250,000 years for the world’s population to achieve 1 billion. It has taken less than 20 years to add another 2 billion to attain our current population of 8.2 billion. In the past 30 years, more has changed than in the past century and in the next 30 years, more will change than in the past two centuries.

For some of us who were born in the late 50s and 60s, we have lived through analogue, digital and now intelligent systems; systems that can make decisions autonomously! Legal practice is also changing like crazy! We are holding on to the last vestiges of legal practice as we know it, in another decade at most, we will not recognize legal practice as we know it today anymore.

I was speaking to the new management of the law firm which I co-founded, from which I am now retired, Simmons Cooper Partners, they were showing me their new AI-driven tools for the work of the firm. They now have a ChatGPT interface that within minutes can sift through several legal databases and offer summarized opinions based on statute and case law. What used to take days of research can now be done in minutes! And the system can argue with you if you oppose its point of view.

They also have a tool called the Github co-pilot for legal drafting, it uses the firm’s own database and can suggest language and clauses tailored to specific legal documents, they showed me another the Work Product Character recognition tool, which ensures that all work generated by the system, all documentation coming out of the firm adhere to the firm’s professional tone and branding guidelines.

They also use a Predictive Analytics and legal strategy interface that uses historical data on case law and statute to provide advice to clients. And then they have AI chatbots for immediate response to common enquiries from clients! And these tools are getting smarter every day.

In September Chat GPT launched its oI-preview designed to solve complex problems by spending more time thinking. The incredible thing about these systems is that they are capable of critical thinking, using huge data resources faster than the human mind! It is clear that a lot of the work that we used to hire a large number of lawyers for is now done much faster and more accurately by technology.

The systems do not get tired or go on leave, they don’t ask for a pay raise! And you know these tools are now becoming cheaper and cheaper, like mobile phones they’ll be available everywhere, and will be commodified!

Second, the role of the lawyer is also changing very rapidly. You can no longer be a technistic lawyer who is a “section 2 says”, or “section 4 says” lawyer and survive in the next few years for two reasons. First, as we have seen, technology is fast replacing basic legal analysis and opinion writing. Many clients will be able to do this themselves using AI tools.

Second, the world has been made flat by technology, a lawyer invariably has to deal with the rest of the world, even to give purely local advice, you must understand how the world works because that would affect how effective your advice will be. Of course, this is more so when you are advising on foreign investments, including cross-border investments. A good working knowledge of global economic trends, changing global rules, and even geopolitics, as they influence international trade and commercial transactions is now sine qua non and will become even more crucial in the coming months and years.

For example, an understanding of how macroeconomic conditions such as interest rates, inflation, and exchange rates can impact our clients’ businesses and operations is crucial. Exchange rate fluctuations and currency volatility may lead to serious financial exposure to the client in cross-border transactions. So advice on compliance and risk mitigation strategies are now also the business of the lawyer. Why? A big part of our cake has been bitten off by technology and more will be eaten up very soon and very quickly!

Years ago you could make money from writing a learned opinion on doing business in Cameroon. Today your client can do that himself or herself using Chat GPT.

Today, the commercial lawyer must be a man or woman of affairs, a global professional with an understanding of how the global financial-industrial complex works. He must in fact be able to put the deals together and not just be an adviser. For example, a lawyer here will need to know that the reason why investments are not coming to Africa and why we are not getting the foreign investment briefs I should be getting is not because of Law No. 2013/004 of 18 April 2013.

The “Investment Promotion Law,” does not provide enough incentives to encourage investment. It is more because of the high cost of capital, mostly caused by real and perceived risk factors. So the Lawyers’ Association must be involved in the major discussions going on internationally about reducing the cost of capital for investments in Africa because it directly affects our business. We must participate in the discussions going on reforming the global financial architecture, and the reallocation of Special Drawing Rights (SDRs) to benefit our countries, so that the cost of local and foreign business can be cheaper and this means more business.

How about the African Continental Free Trade Area Agreements? This is by far the most consequential commercial, and industrial investment treaty in the history of our continent. The agreement creates the world’s largest free trade area by the number of participating countries, a single market of over 1.3 billion people and a combined GDP of $3,7 trillion.

The agreement will remove tariffs for 97% of all tariff lines and not less than 90% of all trade, and we are hoping that it will develop African economies as we trade among ourselves in value-added manufactured goods and commodities and allow free trade for services across the continent. The Agreement is backed by Afrexim’s PAPSS, the Pan African Payment and Settlement System and MANSA. PAPSS is the system that enables African countries to trade with each other in our own local currencies, we don’t have to change our currencies to dollars to trade with each other. You can buy my Nigerian goods in Kenya shillings online. What PAPSS does is facilitate the settlement of these payments so that buyer and seller receive value real time.

MANSA is Africa’s Digital due diligence repository. It is a single source containing information on African companies, including financial institutions, Corporations and SMEs. The purpose of the stored information is to facilitate potential investors or trading partners to perform Customer Due Diligence (CDD) and Know-Your-Customer ( KYC) checks on African companies and entities. Now, what will the full implication of the implementation of the Free Trade Agreement mean for legal practice in our countries? What type of opportunities for legal work will it present, but also what is the current state of implementation of the agreement?

The international trade and commercial law issues that arise and that are being considered are huge and as I said to the practice section of the Nigerian bar, the bar should pay far more attention to what is going on, especially because the rules being negotiated will have far-reaching legal effects on local and foreign investments and commerce.

What are some of these? There are Regulatory Harmonization and Standards being developed for health, safety, environmental protection, and labour. There are Intellectual Property (IP) Rights issues, IP protections for trademarks, copyrights, and patents, because nations often have different levels of IP enforcement and protection, so ensuring fair protection while accommodating different enforcement standards can create conflicts, particularly if IP laws in one country are seen as inadequate or overly restrictive by others.

There are Dispute Resolution Mechanisms also being developed, especially for Market Access and Tariff Disputes. For instance, under the Guided Trade Initiative, we have seen countries imposing non-tariff barriers such as quotas, subsidies, or stringent customs procedures which can lead to trade conflicts even when tariffs are reduced. Then there are the critical Rules of Origin issues.

“Rules of Origin” are important to determine where a product was made, which affects tariff eligibility. For example, because we are to open our borders to free trade means that the Chinese may want to take advantage. They take their products to Benin Republic and want to export to Nigeria under free trade with no tariff rules. What we want to promote is not Chinese dumping, it is indigenous value-added manufactured goods!

By rules of origin, we cannot allow Chinese goods, even if they are coming from Benin, because they did not originate from Benin. These rules can be complex and are prone to manipulation and disputes may arise if countries disagree on compliance with these rules. There are also issues on Digital Trade and Data Privacy including data flows, privacy, and cybersecurity standards.

Legal issues arise from differences in data protection laws in our different countries, as well as from disagreements over data localization requirements and cross-border data transfers. Cross-border Digital trade and Commerce are taking over international commerce, digital payments and blockchain-based transactions, are now commonplace. You must now be able to advise on compliance with the various regulations on data security, intellectual property rights and with the AFCFTA across multiple jurisdictions. A good knowledge of these trade policies tariffs and trade agreements will enable a lawyer to anticipate how shifts in trade policies will affect their clients’ supply chains, pricing, and market access. These are the value-adding roles that the lawyer today must take on to maintain relevance and control of transactions.

But then there are also issues about how the free trade agreements will affect legal practice in our various jurisdictions. Negotiations are going on now about the protocols and regulations for the Protocol on Trade in Services. The aim is to liberalize services across the continent, including professional services like law, medicine, engineering, accounting, and others. These provisions will come under the classification of professional services. Professional services fall under “Business Services” in the Agreement.

The protocol establishes the framework for reducing barriers to the cross-border provision of services, that would broadly include the free movement of professionals. Member states have been submitting what is called Schedules of Specific Commitments, detailing the services they are willing to open up to foreign competition. However, many countries are still negotiating the exact terms, including the degree of liberalization for specific sectors and services, such as professional services.

A major problem to surmount on the path to free movement of professionals is mainly that African countries have diverse legal, regulatory, and educational systems, which makes it difficult to automatically recognize professional qualifications across borders. This affects professionals like lawyers, doctors, engineers, accountants, and others who may need to undergo local certification or licensing procedures to work in another country. Also, concerns in countries about the impact of opening up professional services on local professional practice are expected to slow down the removal of barriers to the free movement of professionals. However,  the removal of barriers is the ultimate objective of the free trade agreement, and it will serve professional associations well to prepare their members for a world in which you can practice across Africa and have other Africans practice here.

There is ample time for our law associations to get involved in the processes, including contributing to the schedules of Specific Commitments as they are being put forward and discussed to be in a position to influence outcomes when negotiations come to legal practice and the possibilities of opening up the profession to enable cross-border practice.

But whether we like it or not, there are already online platforms that offer cross-border platforms for offering legal advice! Very soon we will have virtual law firms doing cross-border practice. Our national or local turfs will no longer be exclusive to us. We now have the rise of the Alternative Legal Service Providers (ALSPs) which often use technology to provide more affordable legal services. They are gaining ground, and firms and in-house legal departments are increasingly relying on ALSPs for tasks like legal research, document review, and regulatory compliance. The question of their legality is open.

Let us talk about climate change and the opportunities for foreign and local investments. First a brief background; as we all know, the simple explanation for the Climate Crisis is that the emission of fossil fuels predominantly by industrialized countries historically and cumulatively is the cause of the imminent disaster. So by the Paris Agreements, the world agreed that the only way to avert a disaster by 2050 was for the world to stop using fossil fuels and undergo a transition to renewable energy.

African countries are the least emitters of the dangerous gases but we are the worst hit and least prepared for the devastation of climate change. Also for us in Africa, there are two existential threats, not one. Yes, the Climate Crisis, but perhaps more importantly, poverty. A lot of that poverty is caused by energy poverty. Lack of electricity. Over 600million Africans have no access to electricity, and another 150million have irregular access.

Over 1.3billion people in Africa are serviced by an installed capacity of 244 Gigawatts which is less than the 248 gigawatts available for Germany’s population of 83 million. For Africa to develop its economies it must use energy. However, the world has a major dilemma. If Africa were to develop in the same way that the industrialized countries did, using fossil fuels, we would become the largest emitters of dangerous gases by 2050. What is more, it will be impossible for the world to achieve its net zero target by 2050 thus putting the world in jeopardy. To cut a long story short, the world needs Africa to develop without increasing emissions, that is using renewable energy for its development. Africa now stands in a position where it can be the nemesis of the world or the solution to the climate crisis.

In September 2023 at the Africa Climate Submit in Nairobi, the AU in endorsing the Nairobi Declaration, also endorsed the resolution that Africa would adopt a Climate Positive Growth paradigm or simply a green pathway to economic growth. Why? We have a massive economic opportunity if we do so because we are the most climate-competitive region on the planet. And the places in the world that can provide ‘green’ solutions most cost-competitively have a lifetime economic advantage as the world cuts down its use of fossil fuels.

Thanks to Africa’s abundance of high-quality untapped renewable energy potential, (60% of renewable energy potential) our young and entrepreneurial workforce, and our relevant natural assets and resources, (almost 40% of critical minerals), we have the key ingredients to be a major climate action powerhouse.

Africa can develop using renewable energy and provide the millions of jobs our people need. But we need 4 key elements to successfully use climate action to our advantage, two of these are primarily the responsibility of African countries, whilst the two other elements require global collaboration.

The first is that African countries must focus economic development plans on Climate Positive Growth, and the second, we must develop and implement supporting legislation and regulation. The third is the role of the wealthier countries, this is the provision of appropriate and sufficient finance and investment in Africa’s renewable energy infrastructure and opening up markets for our green products.

Today, there are legal and trade issues around these issues. First, lawyers in trade and investment must get involved with our Ministries of Justice in ensuring that the new rules to create the environment for attracting green capital are made, and also for local value-added manufacturing using renewable energy. Happily, already over 42% of African countries outside of North Africa have legislation preventing the export of ores without processing. There must also be legislation on renewable energy for processing and manufacturing.

There is also some concern around some European trade rules and mechanisms such as the Carbon Border Adjustment Mechanism (CBAM) which puts a carbon levy on exports coming into the UK. The EU Deforestation Regulations which place a levy on export produce that is the product of farms in deforested environments, commodities such as soy, palm oil, wood, coffee, cocoa, rubber, and beef will be affected by this legislation. Both legislation are seen as disproportionately punishing African exporters. Another opportunity for investment and trade as a result of the transition is the establishment of Carbon Markets. Simply, a Carbon Market is a trading system that enables countries, companies or even individuals to buy and sell carbon credits.

A carbon credit is a right to emit a specific amount of greenhouse gas emissions. So an airline for example emits a lot of GHG, and to meet its carbon reduction obligations, it goes to the market to buy some carbon credit. This reduces the calculated volume of his carbon emissions. Carbon credits themselves are created by Carbon reduction schemes such as forest preservation, decommissioning of diesel generators, wind farms etc. The integrity of these credits being created must be verified by verification agents, they must also be well priced to make the market attractive to both producers of the carbon credit to be traded. The creation of a carbon market and all it entails calls for appropriate rules and regulations and dispute settlement mechanisms. This is our business as lawyers.

Let me conclude by saying that our profession is known for its conservatism and traditions, which are good attributes. But every generation will have the burden and challenge of responding to change, some generations bear a greater responsibility because of the sheer speed and enormity of the changes that are taking place, we are one such generation, our profession is in that moment in history, we must live up to the challenge.

I wish the Anglophone Lawyers Association many more years of practice and thought leadership and many busy and prosperous years ahead. And I pray for all of you, that God will prosper the work of your hands and give you excellent health to enjoy the rich fruits of your labours in Jesus’ name.