Africa Is Not One Legal Market
Why Local Legal Expertise Matters
Jacobs Potgieter Incorporated | Corporate & Commercial Practice - 21 April 2026
Key takeaway:
For many investors, the commercial opportunity across African markets is compelling. Growth, infrastructure demand, expanding middle classes, and long-term strategic positioning make the continent difficult to ignore. But from a legal perspective, the most common and most costly mistake remains the same: treating Africa as though it were a single market operating under a broadly uniform legal framework.
It is not.
Africa comprises 54 countries, each with its own regulators, licensing regimes, ownership requirements, exchange control frameworks, competition authorities, and governance expectations. What works in one jurisdiction may be legally impermissible in another. What succeeds in one sector may be structurally impossible in the next. And what appears legally compliant at entry may, years later, expose an investor to demands (regulatory, fiscal, or political) that were never modelled.
This article does not argue against investing in Africa. It argues for investing in Africa correctly: with jurisdiction-specific legal architecture built from the ground up, and with an honest understanding of where the legal complexity actually sits.
Four themes consistently define the difference between investments that work and those that do not. Each is illustrated below by cases in which well-capitalised, experienced investors got the mechanics wrong and paid for it.
1. The Licence Is the Business
Not an Administrative Step That Follows It
In regulated sectors, the licence, permit, concession or regulatory approval is not a formality to be resolved after commercial terms are agreed. It is the investment. It determines what entity may operate, what conditions apply to that entity, what local participation is required, and — critically — at what cost and on what timeline the business may actually commence.
The sequencing error is common: investors agree commercial terms, establish a group structure, and then seek the regulatory approval. When the approval reshapes the structure, requires different entity types, or costs far more than projected, the restructuring that follows is expensive and the delay is often fatal to commercial momentum.
IN PRACTICE: SAFARICOM'S ENTRY INTO ETHIOPIA
This is particularly acute in telecoms, financial services, energy, mining, and infrastructure. Sectors where the regulatory approval shapes not only market access but entity structure, ownership composition, and ongoing compliance obligations. Where a licence is required, the legal and regulatory mapping must come first. Structure follows approval, not the other way around.
2. Regulatory Involvement Does Not End at Approval
It Shapes the Ongoing Structure of the Business
A common underestimation is that regulatory engagement is an entry-stage event. In practice, the regulator is often a continuing structural participant in the investment. One whose requirements evolve, whose approvals carry conditions, and whose oversight extends to how the business operates, not merely whether it may operate.
This is most visible in competition-sensitive infrastructure transactions, where approval is granted conditionally, subject to behavioural obligations that materially affect the economics, governance, and competitive positioning of the combined entity. Investors who do not model the full scope of regulatory conditions, including those imposed after approval, frequently find that the business they end up with is structurally different from the one they planned.
IN PRACTICE: VODACOM AND MAZIV
The practical implication is that regulatory engagement must be modelled not only as a condition precedent but as an ongoing governance variable. The approvals process does not produce a clean starting line. It produces a set of obligations that run with the business, and those obligations must be understood, documented, and built into the operational and commercial structure from the outset.
3. Capital Flow Mechanics Must Be Designed at Entry
Not Assumed
One of the most consistently underestimated legal questions in cross-border African investment is deceptively simple: how does money lawfully move into, through, and out of the investment? Shareholder funding, dividends, loan repayments, management fees, and exit proceeds all require legally compliant mechanisms. In many African jurisdictions, those mechanisms are regulated by exchange control frameworks, central bank approvals, foreign exchange availability, and documentation requirements that are not always transparent at the point of entry.
The error is not usually that investors ignore the question entirely. It is that they answer it at a principle level “dividends may be declared and repatriated” without designing and documenting the specific legal mechanics required to make that true in practice. The gap between the principle and the mechanics is where the exposure sits.
IN PRACTICE: MTN IN NIGERIA
The MTN case illustrates a principle that applies across African markets: it is not sufficient to establish that value may be extracted in principle. The specific instruments, approval requirements, documentation standards, and forex mechanics that make extraction possible in practice must be designed, documented, and tested against the applicable legal framework before the investment is made, not when the investor is ready to exit.
4. Governance Must Be Built for Future Stress
Not Present Alignment
At the point of entry, relationships between co-investors are typically aligned. Commercial terms have been agreed, objectives are shared, and the instinct (particularly when one party is a state entity or politically connected partner) is to preserve goodwill by leaving governance arrangements loosely documented. This is one of the most expensive instincts in African deal-making.
The governance documentation is not tested during periods of commercial harmony. It is tested when interests diverge, when commodity prices fall, when a state partner’s political priorities shift, when a change of control is proposed, or when a foreign investor wants to exit. By that point, poorly documented governance is not an administrative inconvenience. It is a structural vulnerability that a counterparty with state backing, natural resource control, or regulatory influence will exploit.
IN PRACTICE: CMOC AND GÉCAMINES IN THE DRC
Board composition, reserved matters, funding obligations, change of control provisions, transfer restrictions, exit mechanics, and dispute resolution are not technical extras to be finalised after the deal is done. They are the legal architecture that determines whether the business can continue to function and whether the investor can protect and realise its position when the relationship is under pressure. That architecture must be designed when interests are aligned, precisely because it will only matter when they are not.
5. Local Legal Expertise Is Essential
Not Optional
None of the four cases described above involved obscure or unusual legal requirements. MTN’s exchange control obligations were not hidden. Safaricom’s licence costs were knowable. Vodacom’s competition law exposure was analysable. The legal frameworks governing Gécamines’ participation rights existed in the applicable mining codes and joint venture agreements.
What each case required (what generic regional legal advice could not provide) was deep, jurisdiction-specific understanding of how those frameworks operate in practice: how regulators exercise discretion, how state entities deploy legal leverage, how exchange control approvals are processed, and how standard contractual protections perform under domestic legal and political conditions.
This does not mean that regional strategy is not possible. It means that regional strategy must be supported by jurisdiction-specific legal insight at each point of entry, structuring, and ongoing operation. It requires that local directors, senior in-country advisors, and local counsel are not a concession to administrative necessity, but a material risk-management tool.
Three Questions Every Investor Must Answer Before Entry
Before proceeding with an investment into any African market, three legal questions must be answered. Not in principle, but in documented, jurisdiction-specific, regulatory-tested detail:
- Can we enter this market lawfully and what does lawful entry actually cost, in licensing fees, ownership concessions, and regulatory timeline?
- Can we operate and control the business lawfully and does the regulatory framework for that operation constrain our governance, competitive behaviour, or capital structure in ways we have fully mapped?
- Can we extract value and exit lawfully and have we designed and documented the specific legal mechanics, not merely satisfied ourselves that extraction is permissible in principle?
The legal complexity of African market entry is not a reason to avoid the continent. It is a reason to take the legal architecture of each investment as seriously as the commercial thesis. The cases described in this article involved sophisticated, well-resourced investors with deep African experience. Their losses and delays were not the result of ignorance. They were the result of underestimating the gap between legal principle and legal mechanics in specific jurisdictions.
That gap is precisely where local legal expertise operates. And it is precisely why Africa, as a legal matter, remains not one market, but fifty-four.
Shaun Jacobs
Director – Jacobs Potgieter Incorporated.