Importance of trade, investment in economic transformation of Africa

In a world where trade and investment play significant roles in the economic transformation of nations, Africa is not left behind in recognizing the importance of these aspects. The African Union Commission has taken a step towards a comprehensive approach with the development of the Pan-African Investment Code. This groundbreaking move was highlighted at a side event during the Africa Development Week, sparking discussions on the legal and regulatory implications of this new code. Makane Mbengue, a Professor of International Law at the University of Geneva, shed light on the significance of aligning the future continental free trade agreement with the Pan-African Investment Code. According to Mbengue, the ultimate challenge for Africa lies in integrating clarity and coherence into its economic agreements. By bridging the gap between the continental free trade area and the Pan-African investment code, African nations aim to create a conducive environment for sustainable development and responsible investment. The traditional bilateral treaties that have governed investment relations between countries have often fallen short in addressing the unique developmental challenges faced by African nations, as Mbengue pointed out. While bilateral investment treaties are crucial for attracting foreign investments, they have not always been in sync with the developmental needs of African countries. The Pan-African Investment Code seeks to provide an African perspective on investment, emphasizing sustainable development and responsible investment practices. A key aspect of the Pan-African Investment Code is the emphasis on investor obligations, a departure from the traditional focus solely on investor rights. This shift aims to strike a balance between the interests of foreign investors and the host states, particularly in terms of the regulatory space of states. The previous model, dominated by bilateral investment treaties, often restricted states from enacting crucial legislation in areas such as environmental protection and public health due to the threat of investor-state arbitration. The inclusion of investor obligations in new investment agreements is seen as a step towards creating a more equitable playing field, where both investors and host states have their interests protected. This move is crucial in the current landscape of corporate accountability and sustainable development goals, which call for responsible and green investments that align with human rights and environmental protection. In a nutshell, the Pan-African Investment Code represents a paradigm shift in how investment relationships are approached in Africa. By advocating for a more balanced and sustainable model, African nations are setting the stage for a new era of investment that prioritizes development and responsibility. As discussions continue on the implementation and adoption of this code, the future looks promising for Africa's economic transformation through trade and investment.