aln legal notes

In VogueThe East African Oil and Gas Sector

Taming the Lion MarketsReflections from ALN on the Investment Climate in Africa

A Plug in the VentLand Ownership Challenges Hamper Natural Gas Development in Tanzania

Building BlocksPublic Private Partnerships and

Kenya’s Infrastructure Deficit

Diamonds UnearthedAn overview of mining in Botswana

Consumer Protection in KenyaAway with the fine print!

Forex AlertZambia’s Move in Monitoring

Balance of Payments

and so much more...

BOTSWANA | BURUNDI | ETHIOPIA | KENYA | MALAWI | MAURITIUS | MOZAMBIQUE | RWANDA | SUDAN | TANZANIA | UGANDA | ZAMBIA

VOLUME NO 11 | ISSUE 5 | OCTOBER 2013

Inside this Issue

36 | LEGAL NOTES | APRIL 2013

ALN

ALN is an independent alliance of leading law firms in Africa. It is the largest and only grouping of its kind in Africa, with close working relationships across its 12 members and an established network of Best Friends across the continent. ALN’s firms are committed to working together to provide extensive coverage and on-the-ground experience. Members share common values and are grouped under – EAC, SADC and COMESA – with a combined population of 325 million people.

ALN at a Glance

33

Anjarwalla & Khanna is the largest

corporate law firm in Eastern Africa. The

firm is ranked first in Kenya by various

legal guides, including Chambers Global,

IFLR 1000, Legal 500, PLC Which Lawyer

and Euromoney Guide to the World’s

Leading Project Finance Lawyers.

Introduction

Kenya has seen a significant rise in infrastructure developments in the recent past, especially in the fields of real estate development, energy and transportation infrastructure. This has been caused by various factors including a demand for housing by the rising population, infrastructure demands caused by growing investor interest in the country and the Government’s Vision 2030 development blue print, whose aim is to achieve industrialization by the year 2030.

Putting together an infrastructure project, be it skyscrapers, roads, power projects or a real estate development involves amalgamating several constituent elements. An integral ingredient to any project is the construction contract which sets out the terms and conditions pertaining to the carrying out of the main building works in respect of the project. A well drafted contract that is clear on the terms could have a significant effect on the cost, timing and completion of the project.

What should a project contract provide for?

The key concerns for most developers of a project are as follows:

• ensuring that works are completed in accordance with the construction programme for the project;• ensuring that the works are completed within budget;• where projects are to be financed, ensuring that the risk allocations in the various project contracts will be

acceptable to potential lenders and financiers; and • ensuring that the works are fit for purposes.

Undertaking infrastructure projects in Kenya:Get the contract right!

Aleem Tharani I Anjarwalla & Khanna I [email protected]

KENYA

Our member firms are on the ground in Botswana, Burundi, Ethiopia, Kenya, Malawi, Mauritius, Mozambique, Rwanda, Sudan, Tanzania, Uganda and Zambia. ALN also works closely with its affiliates in UAE, Kenya and Mauritius and its affiliates in UAE, Kenya and Mauritius and its associates in South Africa.

LegalNotes 1

WelcomeFor those of you who are new to ALN as a whole, we are an

independent alliance of leading law firms in Africa. We are the

largest grouping of its kind in Africa, with a tightly integrated

set of top-rated member firms. ALN’s clients and network

of international ‘Best Friends’ law firms benefit from ALN’s

“one-stop-shop” capability knowing that the quality of lawyers

and quality of services throughout is going to be uniformly

first class. Please do visit us on www.africalegalnetwork.com

Actually, I’m new to ALN myself! So a word of introduction is

in order. I have been with ALN for 6 months now – operating

out of Nairobi – having had a career background as a CEO,

a PE investor and an investment banker. I hold a B.Sc. and PhD

in Computer Sciences from Imperial College, London, and an

INSEAD MBA. I like learning languages and have promised my

Kenyan friends that Swahili is next!

Legal Notes is ALN’s flagship publication. Each edition brings

you commentary and analysis from a selection of ALN’s pool

of renowned legal minds.

Like ALN itself, Legal Notes continuously strives for excellence.

To achieve excellence requires your feedback. So do let us know

what you think.

Sincerely,

Dr. Michael H. GeraALN Chief Executive Officer

[email protected]

The Beating Drums of Africa These are undeniably exciting times for Africa. Never before have the drums resonated with such vigour! Today, Africa is being viewed as the land of a thousand gems. The continent’s potential stretches from mineral to agricultural wealth and from rich natural resources to a youthful workforce.

The slumberous giant is rising and Africa’s economies are among the fastest growing in the world, averaging 7 per cent. The growth and returns are attributable to various factors, among them: the unearthing of mineral deposits in Botswana and Zambia and the discovery of oil deposits, natural gas and coal in Mozambique, Kenya, Uganda and Tanzania.

Yet, despite such vast riches, Africa remains home to some of the world’s poorest. It continues to struggle with imbalances of trade and is viewed by many as a risky place to do business. Africa must find ways to address the concerns that still bedevil the continent. At the heart of this, is the need for regulatory and structural and governance reforms.

In this edition of Legal Notes, we bring you legal highlights from various ALN countries, with a particular focus on natural resources. We evaluate emerging trends in the oil & gas sector in East Africa and discuss diamond regulation in Botswana, the investment opportunities presented by Kenya’s private public partnerships laws and the new forex regulations in Zambia.

We have also included a special report on the investment climate in Africa, as seen through the eyes of three senior ALN Partners. Our affiliates, AC&H and JMiles & Co., offer insights on UAE as a gateway to Africa and the role of bilateral investment treaties, respectively.

As always, we hope that you will find this edition insightful! Asante! Merci! Obrigada!

Anne KiunuheEditorPartner, Anjarwalla & [email protected]

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2 LegalNotes

This publication is designed to inform readers of legal issues in various African jurisdictions. The contents of this newsletter are intended to be of general use only and should not be relied upon without seekingspecific advice on any matter. If you would like to subscribe to Legal Notes or any other ALN publication, visit www.africalegalnetwork.com. For further information on Legal Notes, contact [email protected]

Editorial Team: Anne Kiunuhe - [email protected] | Patricia Fokuo - [email protected] Elizabeth Karanja - [email protected] | Wangui Kaniaru - [email protected] | Madiha Abdul-Majid - [email protected]

Contents

In VogueThe East African Oil and Gas Sector ................................................................................................................................................................3

Taming the Lion MarketsReflections from ALN on the Investment Climate in Africa ............................................................................................................................5

A Plug in the VentLand Ownership Challenges Hamper Natural Gas Development in Tanzania ..............................................................................................8

Building BlocksPublic Private Partnerships and Kenya’s Infrastructure Deficit .......................................................................................................................10

Diamonds UnearthedAn Overview of Mining in Botswana ............................................................................................................................................................12

Consumer Protection in KenyaAway with the Fine Print! ...............................................................................................................................................................................14

Forex AlertZambia’s Move in Monitoring Balance of Payments.....................................................................................................................................16

Opportunities and ChallengesKenya’s Devolved System of Government ....................................................................................................................................................18

Foreign Investment Protection in Africa ................................................................................................................................................20

The UAEEmerging Gateway to Africa .........................................................................................................................................................................22

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LegalNotes 3

IntroductionThe development of the East African oil and gas (O&G) sector offers a burgeoning market with significant opportunities for exploration, development and production (E&P) companies. The O&G sector in East Africa is in the early stages of development and as a relatively new market, East Africa is an attractive investment destination.

The question that arises is: how well prepared are Kenya, Mozambique, Tanzania and Uganda to compete for this neoteric E&P interest? Encouragingly, these countries are taking active steps to secure and protect foreign investment by rapidly effecting robust and comprehensive regulatory systems designed to increase transparency and certainty for investors and ensure their own people are beneficiaries of the natural resources.

The trend towards a definitive O&G playing field coupled with significant gas discoveries in Mozambique and Tanzania and oil finds in both Kenya and Uganda, is resulting in global interest refocusing on the East Africa region as an attractive, if speculative, O&G emerging market.

KenyaThe calm election of the new Kenyan Government in 2012 has reduced the perceived political risk of doing business in Kenya and demonstrated a strong rule of law with the President being elected on a pro-progress ticket. With its favourable regional geology, competition for petroleum blocks in Kenya has intensified. The Ministry of Energy and Petroleum has diligently released of a steady stream of blocks for E&P activities, and is considering a move to

Aleem TharaniSenior Associate Anjarwalla & [email protected]

The East African Oil and Gas Sector

licencing rounds designed to underpin investor confidence through a more formulaic and transparent system of block allocation.

Kenya is early in the development spectrum with Tullow drilling wells onshore in Turkana (having obtained good results and declared commerciality with a circa 5200 barrels per day (bpd) flow rate) and Apache and Anadarko drilling wells offshore (with mixed results to date). Due to the increased interest in Kenya, the Kenyan Ministry has become more aggressive than in the past on compliance with PSC terms. The Kenya Ministry has recently only allowed relatively short extensions in combination with very heavy penalties – a clear and significant departure from its historic approach. PSC interest holders now approach the importance of compliance with their obligations with increasing caution, and repossessions on the grounds of failure to comply with work and expenditure commitments are expected imminently.

From the people’s perspective, one of the most exciting developments is the potential creation of a sovereign wealth fund. The Government of Kenya has brought in a number of advisors and is actively pursuing this as a possibility with a view to avoiding the oil curse.

MozambiqueAfter many years of civil war and political instability, Mozambique is returning to a state of normality and consequently its upstream O&G industry is of growing importance in the region. Mozambique’s upstream potential appears to lie in natural gas rather than oil.

Mozambique’s debut into the market includes such highlights as the discovery of more than

In Vogue

100 trillion cubic feet (mainly in the offshore Rovuma Basin) and the Cove Energy takeover by PTTEP (who outbid Shell) which has demonstrated the growing attention O&G companies are giving to Mozambique. Anadarko, ENI, Petronas, Statoil, Total and Maurel & Prom already hold significant interests in the country’s exploration permits.

The Government of Mozambique has made a concerted effort to attract investment. The critical factor in the future exploitation of the country’s gas, however, is the emergence of sound commercial criteria for the establishment of a south-east African gas-gathering network capable of serving developing markets in the region.

Endemic corruption and limited O&G infrastructure will pose the most significant challenges to operators in the short-to-medium term and international donors have repeatedly called on the Government to tackle corruption or risk a freeze on budgetary support and donor aid.

Challenges remain – Mozambique’s infrastructure is inadequate for the spike in investment in the extractives sector. The potential of recent discoveries and regional and international demand for gas have prompted foreign companies to take the lead on infrastructure development with support from the Government.

Tanzania Tanzania has no commercial oil discoveries and only two small producing gas fields (Songo Songo and Mnazi Bay) and a number of promising gas discoveries in the deep offshore blocks. The producing fields took decades to

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Krista BatesConsultantAnjarwalla & [email protected]

Philip KarugabaPartnerMMAKS [email protected]

4 LegalNotes

bring to commercial production due to the lack of a local market and the impracticability of export in view of the limited reserves.

In June 2013, a run of new discoveries took the total recoverable reserves of gas to 28 trillion cubic feet. Tanzania has licensed 16 international energy companies to search for O&G. BG Group, Statoil, Petrobras, Royal Dutch Shell and Exxon Mobil Corp are among companies already operating in Tanzania. The country plans to offer seven deep offshore blocks and one onshore block in October for O&G exploration.

The potential rewards for investors are not in doubt but, despite enjoying enviable political stability, Tanzania remains some way behind regionally as an overall investment environment due to corruption, a challenging tax authority, electricity shortage, poor infrastructure and a deficiency of homegrown specialists in key Government departments.

In a political move likely to significantly shake investor confidence, the Ministry of Energy and Minerals has recently indicated all existing O&G contracts will be reviewed – it is not entirely clear what this will mean for PSC holders. The overall uncertainty leaves Tanzania in a challenging position.

UgandaO&G exploration activities in Uganda have had an unprecedented 90 per cent drilling success rate, with 58 of the 64 exploration and appraisal wells drilled in the country to date encountering oil and/or gas. Wells drilled on a number of structures during 2002-2013 confirmed the presence of multiple exploitable accumulations of hydrocarbons proving up over 3.5 billion barrels of oil equivalent in place.

The moratorium that was placed on licensing oil and gas activities in Uganda will soon be lifted with the enactment of new laws to govern the sector and the establishment of the relevant institutions. International oil companies are already setting up in Uganda in anticipation of the new licensing rounds.

Parliament has recently promulgated further legislation to enable the effective and efficient management of the nascent O&G sector, one of which is the Petroleum (Exploration, Development and Production) Act, 2013 which was brought into force in April 2013.

The new laws are expected to help boost investor confidence in the sector. Investors should however expect to see tougher contractual terms than those that were negotiated under the old legal regime.

After a two year impasse between the Government and the O&G companies, the Government has decided to build a refinery to cater for the needs of Ugandans alongside a crude export pipeline to cater for the interest of the O&G companies. This will hopefully stimulate progress in the development of the O&G sector.

Trends in the Market With a changing landscape, the various Ministries across East Africa have become more robust with the terms required under new PSCs, with large increases in signing bonuses, minimum work obligations, minimum work programs and bank guarantees. The trend is shifting to a more

aggressive sharing of the profit oil with the relevant Government, who are now looking to see a significant balance sheet for E&P companies who wish to secure a PSC.

The Ministries must however be cognisant of the need to balance the interest of the people of East Africa to fully benefit from their own O&G resources with the level of risk which O&G companies are willing to accept. The successful development of the sector is reliant on a country making itself an attractive destination – O&G is by its nature a risky business. East Africa will need to rise to the challenge of attracting E&P activities through sensible PSC terms, and a strong legal, fiscal and regulatory framework.

Given and that a preponderance of PSCs are held by smaller players, noncompliance with work obligations is becoming increasingly likely. With an intensifying difficulty on the part of smaller E&P companies to secure funding coupled with looming work obligations, those holding blocks and requiring financing are becoming less demanding of their potential farm-in partners. Although Kenya (with the most developed capital market in East Africa) has developed a new stock exchange market (GEMS) targeted to provide funding for such companies, it is currently in its infancy. Consequently, there are increased for well funded players wanting to invest in the East African O&G sector via the farm-in route.

This signals new opportunities for those with the technical, operational and financial capacity interested in investing in the East African O&G market.

The Future of the O&G IndustryClearly these are very exciting times for East Africa. Unfortunately many of the East African countries in recent times have shaken investor confidence. Whether it be an adverse review of PSCs, the introduction of taxation on farm-ins, discourse on the pathway to commercialisation or other Government acts, it may restrict development of the sector.

The key to a stable, long term and successful O&G sector is the creation of an investor friendly, market competitive, certain and transparent investment environment with full collaboration with the O&G companies. Despite a few notable offshoots there is broadly speaking a steady march to adopting these founding principles which is indicative of the various East African Government’s approach to ensuring the attendant benefits of natural resources flow to its people. There is every indication, and one can be cautiously optimistic, that despite some challenges along the way the O&G sector will ultimately flourish in East Africa and steer the region to a better future. •

Interesting fact about Africa: Nineteen African countries are currently significant producers of oil and gas, but these sectors employ less than 1 per cent of the workforce.

Interesting fact about ALN: ALN has an oil & gas sector group that advises project sponsors, funders, private equity partners, government agencies, acquirers and targets on innovative project structures, tax considerations, local participation requirements, and other regulatory and commercial considerations in the oil and gas sector.

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LegalNotes 5

According to Phillip Karugaba, a Senior Partner

at MMAKS Advocates in Uganda, “the leading

sector attracting investment by far in Uganda

has been in the oil & gas sector and the support

services. The buy up of Heritage interests

by Tullow and the subsequent farm-in of Total

and CNOOC were certainly among the largest

transactions of late.” The significant growth is

attributable to various factors, primarily Africa’s

rich resources and extended periods of political

stability.

Strides in Law and GovernanceKarim Anjarwalla, the Managing Partner of

Kenya’s Anjarwalla & Khanna Advocates

attributes the growth in Kenya to improvements

in the political climate and governance

structures as evidenced by the recently

successfully held elections. According to Mr.

Anjarwalla, “The elections have undoubtedly

Mapping the Growth African countries have in recent years continued

to outdo others as the fastest growing

economies in the world. It is estimated that in

the last 10 years, growth in Africa has surpassed

that of East Asia. Research conducted by

Renaissance Capital indicates that 11 African

countries grew at an annual rate of 7 per cent

or more between 2000 and 2009. IMF data

shows that 6 out of the 10 fastest-growing

economies in the world between 2001 and

2010 were in Africa. These statistics tell a story

(despite investors derive different conclusions

from them) but it is irrefutable that Africa will

in the years ahead continue to attract a lot of

interest.

It is thus not surprising that international

investors continue to beat on Africa’s doors. Ten

years ago if you were invited to a conference on

Africa in London or other global venues,

chances are the topic would have been political

or social such as peace-keeping or the refugee

crisis. Today, many of the conferences and

events relate to the investment opportunities in

the continent.

New Trade DynamicsAlthough the EU as a bloc remains one of

Africa’s biggest trading partners, the EU’s and

Anne Kiunuhe PartnerAnjarwalla & [email protected]

Reflections from ALN on the Investment Climate in AfricaTaming the Lion Markets

Elizabeth Karanja AssociateJMiles & [email protected]

The renewed interest in Africa has been described as the modern scramble for Africa. Questions abound about investing in Africa and in many ways,

it remains an adventurous journey. There are no easy road maps or instruction manuals. We were privileged to speak to three Senior Partners from

key emerging markets in Africa – Mr. Karim Anjarwalla, the Managing Partner of Anjarwalla & Khanna, Advocates, Kenya, Mr. Phillip Karugaba, a

Senior Partner at MMAKS Advocates, Uganda and Mr. Julien Kavaruganda, the Managing Partner of K-Solutions & Partners, Rwanda. They have been

advising investors and businesses in Africa for over a decade and are familiar with the do’s and don’ts about the continent. They share with us their

candid views on investing in the continent.

America’s share of trade with Africa has

continued to shrink over the years. Trade

between Africa and other countries, particularly

the BRICS countries is on the rise. China leads

the BRICS pack. Chinese investment into Africa

multiplied 10 times between 2005 and 2011,

with major investment in oil and gas,

commodities and infrastructure development.

Between 2006 and 2012, China invested over

USD 67 billion in projects in Africa. Brazil is

investing heavily in the mining sectors in

Mozambique and Angola. The Indian-based

companies that have recently set up in Africa

include Bharti Airtel, Tech Mahindra and Tata.

Intra-African trade boosted by trading blocs

such as the EAC, SADC and COMESA is also on

the rise, with South Africa and Nigeria being the

most active exporters of growth capital. Growth

in neighboring countries has increased the

importance of gateway countries such as

Mauritius (as a financial gateway), Kenya and

Nigeria (both as geographic gateways).

The Budding Sectors Sectors that have continued to attract significant

investment include natural resources and

extractive industries such as oil, gas and mining,

infrastructure, fast moving consumer goods,

telecoms, construction, real estate and financial

services.

Karim Anjarwalla“He is a very fine lawyer and very pleasant to deal with.” IFLR 1000, 2013

[email protected]

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6 LegalNotes

had a positive impact on investment in Kenya

because they were peaceful, they were held

under the new constitution and they affirmed

the growing strength of Kenya’s democratic

and governance institutions.” Other

contributors to the growth in Kenya include

improvements in infrastructure, such as the

expanded road network, telecommunication,

improvement in rail and the expansion of the

capacity of the port of Mombasa.

Julien Kavaruganda, the Managing Partner of

Rwanda’s K-Solutions & Partners, identifies

law and regulatory reform in Africa as a key

driver of the increased interest in Africa.

“Incorporating a company in Rwanda can

now be done all in a space of 6 hours”, he

points out.

According to a recent report published by the

IFC and World Bank, out of the 50 economies

making the most improvement in business

regulation for domestic firms since 2005, 17 of

these are in Sub-Saharan Africa. Rwanda has

implemented 26 regulatory reforms since 2005

while Burundi has implemented at least 4

reforms in the last one year. Mauritius which is

ranked 19 in the World Bank Doing Business

Report improved access to credit information

and made property transfers faster by

implementing electronic systems. Uganda and

Zambia are both noted to have strengthened

their insolvency processes.

There is Room for ImprovementDespite the significant headways made by

African countries in improving the investment

climate, a lot still remains to be done.

Mr. Anjarwalla points out that there is still a

significant infrastructure deficit, especially in

relation to power. The increase in urbanisation,

with 40 per cent of African estimated to live

in cities by 2030, is causing a strain on the

already over-stretched infrastructure.

Other areas requiring reform include investor

relations, bureaucracy, unemployment and

dispute settlement mechanisms.

In Uganda, the Constitution is currently being

tested on several issues such as the appointment

to Cabinet of a serving military officer,

re-appointment of a Chief Justice and other

issues. “Constitutionalism must prevail” quips

Mr. Karugaba.

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Phillip Karugaba “bright and very commercial - definitely a heavyweight lawyer in the Ugandan market.” Chambers Global, 2013

[email protected]

LegalNotes 7

the necessary steps to make the most of this

growing interest. The question is how do they

do this?

Mr. Kavaruganda’s view is that the answer lies

in the transfer of knowledge. “Request a

transfer of knowledge otherwise we won’t be

able to create what they are selling to us: we

can buy their products now, but with their

commitment to help us to develop our

knowledge we can be in a position to develop

our industry and compete with them in the

coming years.”

A major mind shift towards foreign investment

is required and Africa needs to view and treat

foreign investors as collaborators in national

development, recognising their commercial

interests and accommodating this alongside

national priorities. “For African governments

this is not the time to bask in the sun but to roll

Unemployment and poverty is still a major

challenge. “There has been insufficient focus

on poverty alleviation which has resulted in

high unemployment and concerns in relation to

insecurity”, says Mr. Anjarwalla.

There have been strides in improving dispute

resolution mechanisms: 44 out of 54 African

jurisdictions are signatories to the ICSID

Convention on investment arbitration; African

governments are increasingly prepared to

accept arbitration as a preferred dispute

resolution mechanism; and jurisdictions such as

Mauritius, Kenya, Rwanda and Nigeria have set

up international arbitration centres in a bid to

increase foreign investor confidence. However,

there is still a real need to improve the capacity

and quality of the judiciary, which will give more

certainty in the enforcement of contracts and

resolving of investment disputes.

Whereas many Governments in Africa are to be

lauded for the significant legal reforms

witnessed over the last few years, African

Governments must ensure that the reforms do

not achieve the counteractive effect of making

it a more difficult place to do business. Mr.

Anjarwalla, for instance, points out that Kenya,

which ushered in a new form of governance in

2013 comprising of a National Government and

47 County Governments, needs to take care

that the new devolved government structure

does not lead to turf wars in relation to

resource-based investments such as oil and gas

and mining between national government and

county governments.

How do we Move Ahead?With the world’s focus having shifted towards

Africa, African governments and the African

people will need to carefully and actively take

up our sleeves and get working on the

hard and soft issues to create a condusive

environment for business” advises

Mr. Karugaba, adding that infrastructure,

roads, power, telecoms and rail all need much

more investment than is available. Softer issues

like legislation, fighting corruption, and ease of

doing business must all be addressed and

quickly. His advice to the African people is that

they need to put in massive effort to acquire the

requisite skills so as to equip their people to

provide services in the growing industries and

investment opportunities.

Mr. Anjarwalla emphasizes the need for Africa

to invest in itself. “Hold your leaders accountable

and remember that foreign investment will

only help a nation’s development if a country

and its citizens invest in themselves and create

a viable domestic economy based on each

country’s comparative advantages.”•

Julien Kavaruganda “is strong in banking, financing and contract negotiations.”

Chambers Global, 2013

[email protected]

Interesting fact about Africa: There is only one place on Earth where 4 countries meet –

the “Four Corners of Africa” includes Botswana, Zambia, Zimbabwe, and Namibia.

Interesting fact about ALN: ALN is the only network in Africa that brings together leading

law firms in Africa to work together to provide extensive coverage and on-the-ground

experience.

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8 LegalNotes

IntroductionThe legal framework for petroleum and gas

exploration and development in Tanzania is

governed by the Petroleum (Exploration and

Production) Act, 1980 (the PEPA) and midstream

and downstream petroleum activities are

governed by the Petroleum Act, 2008 (the PA)

and the regulations promulgated thereunder.

The Tanzania Petroleum Development

Corporation (the TPDC) Is the body responsible

for entering into production sharing agreements

(PSA) / development agreements with foreign

exploration and development companies.

The PEPA applies to any naturally occurring

hydrocarbon, whether in gaseous, liquid or

solid state or mixtures. The PA, on the other

hand, only seems to apply to petroleum, which

has been defined to mean petroleum crude and

any liquid or gas made from petroleum crude,

coal, schist, shale, tree, peat or any produce of

petroleum crude. The PA does not take into

account natural gas. Currently, there is no

legislation in force which specifically relates to

natural gas.

Although there is a draft Natural Gas Policy

which was issued in 2012, it is not in force.

Furthermore, the Gas Supply Bill, 2009 as

subsequently amended to the Natural Gas Act,

2012 has not passed the mandatory readings

required by parliament or been given presidential

assent. There is, therefore, a gaping legislative

lacuna for companies undertaking work in the

natural gas sector, especially in the midstream

and downstream sector.

Amish ShahLegal ConsultantAdept Chambers [email protected]

A Plug in the VentLand Ownership Challenges Hamper Natural Gas Development in Tanzania

One of the challenges faced by foreign

exploration companies is the uncertainty

surrounding the ownership of land for

midstream and downstream infrastructure.

Land Ownership for Investment Purposes All land in Tanzania is State land, vested in the

President of the United Republic of Tanzania as

trustee for the nation. Statutory leases of up to

ninety-nine (99) years may, however, be

obtained and are known as granted rights of

occupancy. These leasehold interests represent

title and may be sold and encumbered. Land

may only be held under these statutory leases

by a citizen of Tanzania or a company which has

a majority Tanzanian shareholding. Foreign

nationals and foreign companies cannot own

land in Tanzania. A Tanzanian company wholly

owned by foreigners or majority owned by

foreigners can hold land if it holds a Certificate

of Incentives issued by the Tanzania Investment

Centre (the TIC).

When a foreigner wishes to own land for

investment purposes, the land is required to be

identified, Gazetted and allocated to the TIC

which thereafter creates derivative rights in

favour of the investor, subject to the investor

obtaining a Certificate of Incentives. The

Tanzania Investment Act, 1997 (the TIA) sets

out minimum capital requirements that must be

meet in order to qualify for registration under

the TIA. If a project is wholly owned by a

foreign investor or if a joint venture, the

minimum investment capital must not be less

than the Tanzania Shillings equivalent of USD

300,000. If the company is locally owned, the

minimum investment capital is not less than the

Tanzania Shillings equivalent of USD 100,000.

Broadly, the TIA applies to businesses which

meet the investment requirements, as discussed

above, other than to a business enterprise

which is authorised to conduct exploration or

production operations or to construct or

operate a pipeline under the PEPA. However,

there are provisions in the TIA which still apply

to licence holders under the PEPA - these relate

to guarantees of transfer of capital, profits and

dividends and guarantees against expropriation.

The Investment Regulations promulgated under

the TIA require the TIC to automatically issue a

Certificate of Incentives to any investor holding

1952 – Tanzania started petroleum exploration

1974 – First petroleum discovery was made at Songo Songo Island

5 – Number of onshore and shallow water discoveries of natural gas fields made to date

2 – Number of gas fields producing natural gas. These are in Songo Songo and Mnazi Bay

29 – Number of exploration licences granted to the TPDC

One of the challenges faced by

foreign exploration companies is

the uncertainty surrounding the

ownership of land for midstream

and downstream infrastructure.

Interesting fact about Tanzania: Tanzania is home to the coconut crab,

the world’s largest (and one of the most delicious) crabs in the world.

Interesting fact about ADEPT Chambers: Adept acted for Cumberland

and Jeppe Star on the sale of Jeppe Star to a consortium of HSBC Investment

Bank and Satya Capital, marking the largest private equity deal of 2010.

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LegalNotes 9

a licence under the PEPA. In practice, however, oil and gas exploration

and production companies are not automatically issued with a Certificate

of Incentives and therefore cannot rely on the provisions of the land

laws which allows a foreign company to hold land under a derivative

title. Government authorities argue that because exploration/

development activities are governed by the relevant PSA/development

agreement and since PSA’s/development agreements are issued pursuant

to the PEPA, the provisions of the TIA are not applicable.

Developments in the Natural Gas Sector With the recent gas discoveries made in Tanzania the estimated

recoverable gas reserves have increased to 30 and 40 trillion cubic feet.

Certain foreign companies are planning to develop liquefied natural gas

terminal(s), but as discussed above, such ambitions would face

challenges in obtaining land under a derivative title from the TIC. These

companies would instead have to hold some form of long term lease

from the TPDC, which would hold the land as envisaged under the

Natural Gas Policy, 2012. The concern with this arrangement is that

With the recent gas discoveries made in Tanzania the

estimated recoverable gas reserves have increased to

30 and 40 trillion cubic feet.

There is currently no legislation in force which specifically

relates to natural gas.

should the TPDC lose its title over the land for whatever reason, then the

infrastructure on the land could be affected. This creates an operational

risk for an natural gas investor.

From a project financing perspective, the uncertainty raises issues for

lenders as they would often require a strong guaranteed title to act as

security for financing. Where an investor only holds a long term lease

(say from the TPDC), the lenders would only be able to create a security

with the consent of the title holder.

ConclusionIt is clear that there is a legislative lacuna that needs to be quickly

addressed in order to guarantee the future of natural gas development in

Tanzania. There are discussions in Government for the need to amend the

land laws to guarantee land ownership for natural gas development

investors or to make special concessions under existing laws. Investors will

have to wait and see if changes will be implemented in the near future,

as momentum by foreign exploration/development companies mounts. •

33








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KENYA

10 LegalNotes

The government has been encouraging

participation of private parties in developing

public infrastructure through Public Private

Partnerships (PPPs) in a bid to bridge the

yawning infrastructure deficit. These efforts

have initially been centered on creating a

favorable environment to encourage the uptake

of PPPs through creation of a legal framework,

engaging investors and government entities.

As Engineer Stanley Kamau, head of the PPP

Unit at the Kenya National Treasury states,

“[we] as a government, are trying to create an

enabling environment and a mechanism for

supporting PPPs.”

The PPP Act The Public Private Partnerships, Act 2013 (the

Act) was assented to on 14 January 2013 and

came to effect on 22 February 2013. The Act

repealed the PPP regulations under the Public

Procurement and Disposal Act, No. 3 of 2005

(PPDA) and PPP arrangements under the

Privatisation Act, 2005.

The Act defines a PPP as an arrangement

between a state department, agency, state

corporation or county government (Contracting

Authority) and a private party, where the

private party performs a public function or

provides a service on behalf of the Contracting

Authority; receives a benefit for it either in the

form of compensation from a public fund and/

Rosa Nduati-MuteroPartnerAnjarwalla & Khanna [email protected]

Building Blocks

Edwin BaruLawyerAnjarwalla & [email protected]

IntroductionKenya, under its developmental blueprint “Vision 2030”, aims at achieving middle-income country status with a high quality of life for all its

citizens by the year 2030. Although the economy has shown steady growth averaging 4.82 per cent between 2004 to 2013, the country needs

to achieve and maintain an annual growth rate of 20 per cent for the next 20 years to achieve middle-income country status.

or charges to consumers; and is generally liable

for risks arising from performance of the

function in accordance with the project

agreement.

The Act applies to projects for the financing,

construction, operation, equipping or

maintenance of infrastructure or development

of a facility or the provision of public services

undertaken as PPPs. A plain reading of the Act

suggests that contractual arrangements

between the government and a private party

for the exploitation of a natural resource, such

as building a dam or a mining concession would

fall under the definition of a PPP.

Projects Under the ActBefore undertaking any project, a Contracting

Authority must first assess the advantages of

using a PPP over developing the facility or

providing the service itself based on three

indicators:

Although the economy has shown

steady growth averaging 4.82 per

cent between 2004 to 2013, the

country needs to achieve and

maintain an annual growth rate of 20

per cent for the next 20 years to

achieve middle-income country status.

33








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KENYA

Public Private Partnerships and Kenya’s Infrastructure Deficit

LegalNotes 11

Inadequate funding: A recurring challenge is

lack of adequate funds, compounded by the

absence of a long-term lending market. It has

been reported that Kenya will only undertake 6

PPP projects out of the 160 important projects

in the first 5 years due to inadequate finances.

There is a lack of local players in the long-term

lending market which is currently dominated

by Development Finance Institutions (DFIs).

Overlap with other laws: A glaring challenge is

that the Act fails to clarify whether projects that

qualify as PPPs are also subject to the PPDA.

This poses a serious setback in implementing a

PPP as the PPDA contains its own processes

required to be followed.

ConclusionThe Act has introduced a firm legal base upon

which PPP projects can be undertaken in Kenya

and with the devolved system of government,

we are likely to see increasing interest in

infrastructure projects undertaken as PPPs in

the future. The success of the Act will however

rest in the ability of the Regulations to either

give confidence or discourage investors

interested in undertaking PPP projects in the

Country. •

(i) value for money,

(ii) affordability for the Contracting Authority

and

(iii) the end users and appropriate transfer

of risks to the private party.

Projects can either be solicited bids or

privately-initiated proposals.

Solicited bids

For a solicited bid, a Contracting Authority

conceptualizes the projects it wishes to

undertake and submits a list of these projects

for approval by the PPP Unit, PPP Committee

and the Cabinet.

Once the project is on the National Priority List,

the relevant Contracting Authority conducts a

sector diagnostic study and submits a project

proposal for approval to the PPP Unit. If

approved, a competitive bidding process begins

with private parties applying for prequalification

followed by technical and financial bids by the

prequalified parties.

The successful party then establishes a project

company in which the Contracting Authority

may be a minority shareholder.

Privately initiated bid

A private party may field a PPP project to a

Contracting Authority without going through

competitive bidding where:

i) There is an urgent need for continuity;

ii) Costs relating to intellectual property in

relation to the project design are

substantial;

iii) There exists only one person capable of

undertaking the project; or

iv) There exists any of the circumstance as

the Cabinet Secretary may prescribe.

The Contracting Authority then submits the

proposal to the PPP Unit for approval which if

approved, negotiations can commence with the

private party.

Project AgreementsAll project agreements are subject to the laws

of Kenya and must fall within the 13

arrangements provided in the Second Schedule

of the Act or any other arrangement approved

by the Cabinet Secretary. These 13 arrangements

include;

i) Management contract;

ii) Lease;

iii) Concession;

iv) Build-own-operate-transfer scheme;

Rehabilitate-operate-and-transfer; or

v) Land swap.

Draft PPP Regulations 2013 (the Regulations)The National Treasury recently circulated draft

Regulations for public comment. Although the

Regulations were mostly well received, the

business community has voiced concern that

the Regulations are heavily skewed in favour

of the Government.

The Regulations are expected to provide for

thresholds for the application of the Act and for

projects which can be undertaken by County

Governments without necessarily getting

approval from cabinet. This is welcome as most

of the small-to-medium-sized PPP projects will

be undertaken at the County level.

Challenges in Implementing the ActManaging expectations: PPPs involve heavy

planning and logistics which may take at least

3 years before implementation commences.

Most people are unaware of the time required

for matters such as the mobilisation of capital

and multiple approvals like environment impact

assessments. It is, therefore, important that

the expectations of the public and policy

makers are managed.

Generating synergy: A single PPP project

requires the involvement and collaboration of

many government agencies and departments.

Consultations between the various departments

(including between National and County

governments) are therefore central to a PPP

project.

A single PPP project requires the

involvement and collaboration of

many government agencies and

departments.

The Act fails to clarify whether

projects that qualify as PPPs are also

subject to the PPDA.

Interesting fact about Kenya:

Kenya was Africa’s first geothermal power

producer and is the world leader in the

number of solar power systems installed

per capita.

Interesting fact about

Anjarwalla & Khanna:

First Sub-Saharan African law firm

to achieve financial close on a large

power project. A&K was the lead legal

adviser for the project sponsors on the

development of an 83 MW HFO power

generation facility.

33








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KENYA

12 LegalNotes

IntroductionThe mining industry in Botswana has dominated

the national economy since the early 1990s.

Botswana is most famous for its diamond

industry, which was for many years dominated

by South African giant, De Beers, in partnership

with the Botswana Government. De Beers

began exploring for diamond in Botswana in

1955, a time when the country’s economy

survived on agriculture. And, hence, Botswana’s

rise to be a leading global exporter of diamonds

began.

Mineral LegislationAs the mineral sector grew, the Government

recognised the need to update existing mineral

regulation pragmatically. The Mines and

Minerals Act of 1977 has been amended to

incorporate changes designed to facilitate the

issuing of exploration and mining licences and

to make Government participation in new

developments more attractive to investors. The

current Mines and Minerals Act (the Act) was

enacted in July 1999.

Botswana’s general mining policy aims at

maximising the national economic benefit from

development of mineral resources. This is to be

achieved through:

(a) Encouraging prospecting and new mine

development

(b) Negotiating mining agreements which

maximise the net national economic

benefits resulting from mine operations

(c) Generating linkages with the rest of the

economy and increasing local value added

services

Diamonds UnearthedAn Overview of Mining in Botswana

33








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KENYA

(d) Creating employment and training

opportunities for Botswana

(e) Vesting all mineral rights in the Republic.

Acquiring Mineral RightsApplications for mineral rights are made to the

Minister of Minerals, Energy and Water

Resources through the Geological Survey

Department (exploration) or the Department of

Mines (mining). There are three types of mineral

rights in Botswana:

(a) a prospecting licence, which is restricted

to a maximum area of 1000km2. It is valid

for 3 years and may be renewed for

further two periods of 2 years each. The

licence holder is among others, requires to

submit activity reports to the Minister and

once a mineral discovery is made, this is

required to be notified to the Minister. The

licensee may apply for a mining licence

upon discovery.

(b) a retention licence, which is granted to the

licensee over a prospecting area for

periods not exceeding 3 years. Licensees

must provide the Director of Geological

Survey and the Director of Mines with

quarterly activity reports and annual

financial reports. They must also

immediately provide the Minister

(via the Director of Mines) results of

studies, surveys and tests, including

analytical metallurgical, mineralogical

and geophysical work.

(c) a mining licence, which is only issued to

a prospecting licensee over the ore

deposit in question. The application

must be made by a company resident

in Botswana which intends to carry on the

sole business of mining under the mining

licence applied for. The licence is valid up

to 25 years and may be renewed for

another period not exceeding 25 years.

Rizwan DesaiSenior PartnerCollins Newman & [email protected]

Krupali RaiParalegalCollins Newman & [email protected]

LegalNotes 13

Interesting fact about Botswana:

Botswana’s currency is called the Pula

(which means “rain” in Setswana, the

local language).

Interesting fact about Collins Newman:

Collins Newman has a well-developed

and dedicated mining practice covering

all aspects of mining and resources law,

and has been involved in the largest

infrastructure projects in Botswana.

Interestingly, diamond mining uses water,

rather than chemicals, for extraction.

The rights may be granted to an individual or

company as provided for in the Act.

The key feature of the revised licensing regime

is that the whole process from prospecting to

mining would be automatic and predictable,

removing some of the uncertainty and stages of

negotiation which previously existed. The main

innovation was the introduction of the retention

licence, designed to accommodate explorers

who on making a discovery, find that it cannot

immediately be mined economically. Previously,

prospective mining investors would have lost

their entitlement if they were not able to bring

a resource into production.

The Government’s StakeThe Government of Botswana insists on

effective participation in the mineral sector

through equity participation and board

representation.

Generally, for large projects, Government

participation falls within the range of 15 per

cent to 25 per cent issued free of cost. With

regard to new mines, while the Government

retains the right to acquire a minority interest,

this will now generally be up to a maximum of

15 per cent and will be on commercial terms

with the Government paying its pro-rata share

of costs incurred.

Minimum controls are exercised on business

operations and the management is left entirely

to the private sector partner.

Taxation of mining companies outside the

diamond industry has also been revised with a

variable rate income tax replacing project-

specific rates.

Royalty rates are calculated as a percentage of

the gross market value of the mineral and are

currently 10 per cent for precious stones

(including diamonds), 5 per cent for radioactive

minerals, precious metals, semi-precious stones

and coal and 3 per cent for all other minerals,

including building and industrial mineral

products.

Environmental ObligationsBotswana has a National Conservation Strategy

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KENYA

Coordinating Agency which promotes the use

of an environmental impact assessment.

Sectorally, the regulations under the Act contain

detailed requirements for environment control.

The holder of a mineral concession is obligated

to conduct his operations in such a manner as

to preserve as much as possible the natural

environment; minimise and control waste or

undue loss of or damage to natural and

biological resources; and to prevent, and where

unavoidable, promptly treat pollution and

contamination of the environment.

ConclusionThe Government of Botswana has undertaken a

deliberate commitment to derive maximum

benefit from the entire diamond value chain in

the country which has led, inter alia, to the

relocation of the De Beers marketing and selling

arm, Diamond Trading Company, from Europe

to Botswana which will initiate the much

needed critical mass for secondary diamond

trading in Botswana.

The current legislative, political and business

environment, in addition to the Government’s

stewardship of Botswana’s mineral resources

has led to the recognition of Botswana,

by the Fraser Institute, as one of the top 5

countries in the world for mining investment

in 2012.

With the progressive developments made

by the Government, it is expected that

Botswana’s position as a diamond producer

can only go up. •

Krupali RaiParalegalCollins Newman & [email protected]

14 LegalNotes

IntroductionIn the last 3 years, Kenya has witnessed

significant changes in the area of consumer

protection. Many of the legal rights of

consumers are now enshrined in written law and

consumer lobby groups are slowly beginning to

gather momentum. The Constitution of Kenya

provides that consumers have the right to

goods and services of reasonable quality.

In addition, consumers have the right to

information necessary for them to gain benefit

from goods and services, protection of their

health, safety and economic interests and

compensation for loss or injury arising from

defects in goods or services.

The Constitution required Parliament to enact

legislation to provide for consumer protection

and for fair, honest and decent advertising.

Pursuant to this, the Consumer Protection

Act, 2012 (the CPA) was enacted and became

operational on 14th March, 2013.

Historical Background Prior to the enactment of the CPA, consumer

protection was fragmented among various

laws, including the Standards Act, the Trade

Descriptions Act, the Sale of Goods Act, the

Hire Purchase Act, the Competition Act, 2010

Away with the Fine Print!

Nafysa AdamPrincipal AssociateAnjarwalla & Khanna [email protected]

Consumer Protection in Kenya

and English common law. The lack of a single

encompassing legislation was a challenge to

enforcement.

There was no statutory designated body dealing

with consumer affairs, and the Consumer

Federation of Kenya (COFEK) was registered

by a cross-section of interested parties in 2010.

COFEK provides legal advice and institutes

legal proceedings in matters touching on

consumer protection. For instance, in 2012,

COFEK instituted proceedings against the

Communication Commission of Kenya to stop

them from effecting their notice to switch off

analogue signal transmission in a bid to have the

public switch to digital signal. COFEK claimed

that the CCK had failed to offer sufficient public

information on digital migration so as to allow

consumers the freedom of choice guaranteed

by the Constitution.

The Competition Act, 2010 and Consumer ProtectionThe Competition Act has a number of provisions

geared towards consumer protection. For

example, the Competition Act makes it

an offence to make false and misleading

representations to consumers or engage in

conduct that is unconscionable in relation to

the supply of goods or services. False or

misleading representations include false

representations that the services or goods are

of a particular standard, quality, value or grade.

In determining whether or not a person has acted

unconscionably, the Competition Authority may

consider various factors, including the relative

strengths of the bargaining positions.

Further, the Competition Act grants power to

the Competition Authority to require suppliers

to recall their goods if they do not comply with

prescribed safety standards.

Under the Competition Act, a person who

contravenes any of the provisions in relation

to consumer welfare commits an offence and

is liable to conviction to imprisonment for a

term not exceeding 5 years and/or to a fine

not exceeding KES 10 million (approximately

USD 120,000).

The Constitution of Kenya provides

that consumers have the right to

goods and services of reasonable

quality.

The CPA automatically incorporates

into consumer agreements certain

implied conditions and warranties

applying to sale of goods such

as fitness for purpose and

merchanteable quality.

Interesting fact about Kenya:

Jomo Kenyatta International Airport is the biggest

airport in East Africa.

Interesting fact about Anjarwalla & Khanna:

With 54 lawyers, A&K is the biggest law firm in

East Africa.

33








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KENYA

LegalNotes 15

New FrameworkThe CPA establishes a platform for consumer

protection. The CPA automatically incorporates

into consumer agreements certain implied

conditions and warranties applying to sale

of goods such as fitness for purpose and

merchanteable quality.

Who is a Consumer?The CPA defines “consumer” widely to include

not only the person who buys the goods or

services, but also a person who uses the goods

or services irrespective of whether they were a

party to the purchase transaction.

The Kenya Consumers Protection Advisory

Committee (the Committee)

The CPA establishes the Committee whose

functions include providing advice to

consumers on their rights and responsibilities

under appropriate laws, making available

to consumers general information affecting

their interests, ensuring relevant action on all

aspects of consumer protection and advising

the Cabinet Secretary on matters related to

consumer protection.

The Committee is made up of the principal

secretary for trade and industry, the Attorney-

General and persons nominated by the cabinet

secretary which include among others, four

persons nominated by accredited consumer

organizations, professional bodies including the

Law Society of Kenya and government agencies

including the Kenya Bureau of Standards.

The CPA and the Banking IndustryThe CPA has significantly changed the game

in the banking industry. There are protections

offered in relation to credit agreements (a

consumer agreement under which a lender

extends credit or lends money to a borrower),

including the following:

(a) If a lender under a credit agreement invites

a borrower to defer making payment,

the lender must disclose whether or not

interest would accrue on the unpaid

amount failing which lender is deemed

to have waived the interest.

(b) A lender is not entitled to impose on

a borrower default charges other than

reasonable charges in respect of legal

costs incurred by the lender in

attempting to collect payment and

realizing security interest or costs

incurred by the lender in respect of bounced

cheques.

(c) A borrower is entitled to pay the full

outstanding balance under a credit

agreement at any time without any

prepayment charge or penalty.

Other ProtectionsOther protections under the CPA include:

(a) Where a consumer, under a future

performance agreement, has paid at least

two-thirds of his payment obligations,

the supplier may only re-possess the goods

or services upon default in payment by

the consumer by leave from the High

Court.

(b) If a consumer agreement includes an

estimate, the supplier shall not charge the

consumer an amount that exceeds the

estimate by more than 10 per cent.

(c) A repairer of motor vehicles and other

goods shall not charge a consumer for

any works or repairs until the repairer first

gives the consumer an estimate unless the

consumer declines the estimate or gives

the repairer a maximum amount that he

will pay for the works.

ConclusionGiven the haphazard way that consumer

protection has been dealt with in the past, the

CPA, in many ways, is a welcomed change. It

brings with it a piece of legislation that can

be relied on by consumers, in its entirety, in

relation to consumer protection. Suppliers,

on the other hand, need to be aware of its

far-reaching implications. Only time will tell

how effective the CPA will be in meeting its

objectives. •

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16 LegalNotes

IntroductionThe Government of Zambia will now be able to

monitor borrowings from non-resident lenders

and remittances out of Zambia. This is after the

recent introduction of the Bank of Zambia

(Monitoring of Balance of Payments)

Regulations, Statutory Instrument 55 of 2013

(the Regulations), which came into operation

on 1 July 2013. The Regulations repealed the

Bank of Zambia (Monitoring of Balance of

Payments) Regulations Statutory Instrument

32 of 2013 (SI 32).

The enactment of the Regulations does not

appear to introduce any foreign exchange

restrictions, but have still created new concerns

for foreign lenders and investors in relation to

foreign exchange payments to and from

Zambia.

Impact of the Regulations on Foreign LendersUnder the Regulations, the Bank of Zambia

(BoZ) monitors borrowings from non-resident

lenders and the receipt of the principal and

interest on loans to non-residents. BoZ also

monitors any amounts remitted out of Zambia

whether gratuitous or not, loans granted to

non residents and any payments of interest or

principal or an instalment on loans from foreign

lenders.

The Regulations affect all capital-intensive

projects in Zambia which are largely financed

through foreign exchange loans from

financial institutions outside Zambia.

Mutule MusebaAssociateMusa Dudhia & [email protected]

Forex AlertZambia’s Move in Monitoring Balance of Payments

Registration of LoansThe Regulations require any person

who obtains a foreign exchange loan from a

non-resident lender or who provides a loan to a

non-resident borrower to register the loan with

the BoZ through a commercial bank licensed

in Zambia (Commercial Bank). However, this

requirement to register the loan does not apply

to loans for a period of less than 30 days.

The Regulations further provide that, should a

subsidiary of a foreign company obtain a

foreign exchange loan from a parent company,

shareholder, partner or affiliated entity,

the local borrower shall provide the Commercial

Bank with a signed facility, loan or similar

agreement and in each case disclose the rate of

interest, duration and the repayment schedule

of the loan.

Whilst the Regulations do not require written

loan agreements to be submitted where the

parties are not related, it is expected that BoZ

will request copies of such loan agreements

when registering the loans.

Where the transaction involves goods or services

which results in an external debt then the

borrower will have to provide evidence of the

importation and physical delivery into Zambia

of the goods or services which resulted in the

loan amount.

Under the Regulations, a Commercial Bank is

only permitted to make inward or outward debt

service remittances on loans that are registered.

In the case of outward remittances, proof that

applicable taxes have been paid is required.

The Regulations

require any person

who obtains a

foreign exchange

loan from a non-

resident lender or

who provides a loan

to a non resident

borrower to register

the loan with the

BoZ through a

commercial bank

licensed in Zambia

Interesting fact about Zambia: Because Zambia is a land-locked country,

you need to travel 600 miles before seeing an ocean.

Interesting fact about Musa Dudhia: While you are driving through

Zambia, you can see the Kafue Dam, a USD 1.5 billion project Musa Dudhia

acted as local counsel on by advising the International Finance Corporation

and the Government of Zambia.

33








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KENYA

LegalNotes 17

Persons that contracted loans with foreign

lenders before the Regulations became

operational on 1 July 2013 are required to

provide the information required for the

registration of a debt on or before 31 July 2013.

It would appear that the failure to register

any foreign exchange loan will proscribe a

Commercial Bank from facilitating inward and

outward debt service remittances in respect

to the loans contracted before the operation

of the Regulations.

Foreign lenders may, therefore, have to take

measures to ensure that borrowers based in

Zambia have complied with the requirements

under the Regulations in order to avoid the risk

of Commercial Banks in Zambia being

proscribed from facilitating loan repayments on

grounds of lack of registration.

Loan Identification NumberThe Regulations further require that the loan

agreements, which are registered, be assigned a

unique identification number by the BoZ and

will be maintained in an electronic depository at

the BoZ. To obtain this identification number,

the resident borrower will need to provide

evidence of receipt of the loan amount in a

bank account in a Commercial Bank and the

bank account has to be in the name, or for the

benefit, of the borrower.

Commercial Banks shall be proscribed from

registering loans without the unique

identification number. Foreign lenders must

therefore take measures to ensure that

borrowers based in Zambia have complied

with the regulatory requirements under the

Regulations.

Impact on Foreign InvestorsThe Regulations have introduced a requirement

for foreign investors to open and maintain a

foreign currency account with a Commercial

Bank. Under the Zambia Development Agency

Act, 2006 (the ZDA Act) a foreign investor is

defined as a person who makes direct

investment in the country and who in the case

of a natural person is not a citizen or permanent

resident of Zambia and, in the case of a

company, is incorporated outside Zambia

.

The ZDA Act provides that for a foreign investor

to be entitled to incentives as specified by or

under the Income Tax Act or Customs and

Excise Act, it is required to hold an investment

certificate and be investing not less than

USD 500,000 or the equivalent in convertible

currency, in a priority sector or product.

The Regulations require foreign investors

holding investment certificates under the ZDA

Act to deposit the pledged cash component of

the investment pledged under the investment

certificate into the account required to be

maintained within the period stated in the

investment certificate and to acquit the

deposited amount to the BoZ.

In addition, the Regulations require that

where a foreign investor has pledged capital

equipment under the investment certificate,

the pledged capital equipment must be

acquitted to the BoZ by producing

documentation indicating the monetary

equivalent of the capital equipment. The

Regulations also require an acquittal of the

monetary equivalent of any non-cash

component to the BoZ.

The ZDA Act provides that the ZDA may

suspend or revoke a licence, permit or certificate

of registration where it finds that a foreign

investor has failed to implement the pledged

investment. It, therefore, appears that the

failure to deposit or acquit the pledged

investment would result in the suspension or

revocation of the investment certificate of

the foreign investor.

Criminal SanctionsIn addition to the implications discussed above,

the Regulations make provision for criminal

sanctions. A person who contravenes any

provision of the Regulations commits an offence

and is liable, upon conviction, to a fine not

exceeding approximately USD 3,300 and/or

to imprisonment for a period not exceeding

10 years.

ConclusionThe Regulations have elicited anxious reactions

from both local and foreign investors. It will be

interesting to see how the Zambian Government

goes about enforcing the Regulations. •

A person who contravenes any

provision of the Regulations

commits an offence and is liable,

upon conviction, to a fine not

exceeding approximately USD 3,300

and/or to imprisonment for a

period not exceeding 10 years.

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18 LegalNotes

IntroductionThe Kenya Constitution, which was promulgated

in August 2010, heralds significant changes,

among them being the introduction of the

devolved system of government. This

transitioned Kenya from the old national system

of government, which was characterized by

the centralization of political and economic

power, to a federal system of government,

where resources and power would be equitably

distributed in the country.

Implementation of the devolved system

commenced after the March 2013 elections.

There are 47 counties, each with its own

executive and legislative arm. The devolved

system envisages that the national and county

governments are distinct systems of

government.

Devolution is seen as providing an opportunity

for a break from the corruption and inequitable

distribution of resources that had hitherto

existed. Kenyans have high expectations:

upgraded infrastructure, jobs, better services

and a share of the proverbial national cake,

to name but a few. Unfortunately, the majority

of Kenyans do not fully understand the fairly

complex new system. Ensuring equity in

resources distribution and managing

expectations will be a big challenge –

decentralization is no silver-bullet.

Key Devolution InstitutionsUnder the devolved system, there is a bicameral

Parliament comprised of the National Assembly

and the Senate. The National Assembly is

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KENYA

Paul WanjohiLawyerAnjarwalla & [email protected]

Opportunities and ChallengesKenya’s Devolved System of Government

Aisha AbdallahPartnerAnjarwalla & [email protected]

mandated to legislate on national laws while

the Senate is restricted to legislation on matters

affecting the counties. Both chambers are

required to cooperate on a number of

overlapping areas.

At the national level, the President’s powers

have been significantly checked. For example,

the President can only appoint and dismiss

Cabinet Secretaries with the approval of

Parliament, a power which was hitherto left to

his unfettered discretion. The Cabinet

Secretaries are largely career professionals, a

departure from the former system where

ministers were politicians.

At the county level, the County Assembly

enacts legislation to enable the county

governments to execute their assigned

functions. It also approves local development

projects, investment decisions and borrowing

by the county governments. The County

Executive Committee exercises executive

authority at a local level and implements county

legislation. It is made up of the Governor,

Deputy Governor and the County Executive

Committee members.

The Opportunities and Challenges of Kenya’s Devolved Government StructureThe devolved system has brought with it a

mixed bag of fortunes. There are great

opportunities in terms of decentralisation of

resources and development. On the other hand,

devolution also portends various challenges.

Below is a sample of the major opportunities

and challenges.

Revenue and FinanceThe Constitution guarantees that a minimum of

15 per cent of the total national revenue must

be allocated to the county government. For the

financial year 2013/2014, the approved

budgetary allocation to counties stands at

approximately 32 per cent. This allocation has

already faced criticism, and governors and

county officials have been clamouring for

increased allocation. A cross-section of

politicians have agitated for a referendum to

pass a constitutional amendment increasing the

minimum allocation from 15 to 40 per cent. On

the other hand, some have argued that the

county governments should first demonstrate

prudent use of the 32 per cent before requesting

further allocation.

Under the Constitution, counties have the

power to raise their own revenues through

property and entertainment taxes, fees and

charges charged on local services, sale of bonds

and other financial instruments, borrowings

and grants from donors. The obvious challenge

will be to balance the fees and taxes charged

by the county governments with those charged

by the national government, as ultimately, any

revenue policies will affect the population. For

example, Nairobi County has enacted a County

Finance law that is set to increase charges in

nearly all service areas by margins of up to 100

per cent. This, if not managed properly, will be

counter-productive as it may increase the cost

of doing business, the cost of living and deter

would-be-investors.

A major challenge that will be faced by county

governments is management of inherited debts

LegalNotes 19

Interesting fact about Kenya: Kenya is named after Mt. Kenya – the largest mountain in Kenya.

Interesting fact about Anjarwalla & Khanna: A&K’s top legal minds have been honoured in 2013: it has been named Top Land Law Firm of the

Year by Finance Monthly Law Awards; Banking and Finance Lawyer of the Year Award; by Lawyer Monthly Legal Awards and shortlisted as Law

Firm of the Year Award for Africa Oil and Gas Awards.

LegalNotes 19

from their predecessors. Some counties such as

Nairobi County and Mombasa County have

inherited huge amounts of debts from the

defunct city councils and managing such debts

will be in direct competition with other financial

obligations of the county governments such as

developmental projects and service provision.

Natural ResourcesCurrently, the national government has the

sole discretion to grant mining licences or

enter into production sharing contracts.

With the recent discovery of oil and natural gas

and good prospects for mining and other

extractive industries, county officials are calling

for more participation in the granting of

exploration and mining licences and entry into

production sharing contracts. Turkana, which

lies in Northern Kenya, has recently seen major

discoveries of commercially viable oil reserves

and Kwale in Kenya’s Coastal region has seen

the discovery of commercially viable titanium

and rare metals deposits. Areas like the Mui

basin are being prospected for coal.

There is a strong argument that there should be

equitable and transparent sharing of revenues

derived from the natural resources between

national and county governments. A system

needs to be quickly developed as between the

two levels of government so as not to dampen

investment and development of Kenya’s

resource wealth.

Devolution of Functions and Powers The functions of both the national and the

county government have been set out in the

Constitution. The national government is in

charge of overall policy formulation. In addition,

certain key functions of national interest such as

national security are the preserve of the national

government. The county government is

primarily mandated with service delivery at the

county level. While legislating for their

respective functions, each level of government

will be expected to respect the division of

functions. Cracks are already starting to emerge

in the division of powers and responsibility,

as has been witnessed after the natural resource

discoveries. In addition, although county

governments are responsible for infrastructural

development within the counties, the national

government is also responsible for development

projects at the national level. A clear

management system through which functions

will be more clearly set out and any disputes on

overlap in functions smoothly resolved, needs

to be put in place.

Counties are responsible for providing a

significant amount of the services to the people.

It is expected that County governments will

undertake a lot of capital infrastructure projects

at the county level mostly through public

private partnerships (PPPs). This would create

opportunities for the private sector to work

jointly with the county governments. This is

however an area that needs to be well defined

and the necessary regulatory and structural

frameworks put in place to facilitate such PPPs.

ConclusionDevolution is intended to promote democracy,

accountability, self-governance, public

participation, accessibility of services and

equitable sharing of resources.

However, it is a fairly complex and expensive

process that will take many years to fully

implement. There are a lot of opportunities for

individuals, professionals and businesses arising

out of devolution and if well handled, Kenyans

and investors in the country can enjoy the

benefits that devolution promises. •

33








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20 LegalNotes

IntroductionAfrican states rely heavily on Foreign Direct

Investment (FDI) as part of their development

strategy. Where states are concerned some of

the risks are: failure by the state to safeguard

foreign investor’s rights; expropriation of

property; political instability and ineffective or

corrupt judicial systems to enforce their rights.

In recent years, African states have taken

several initiatives to increase the protection of

and legal security offered to its foreign investors

and this has had a correlating effect of

increasing FDI into Africa. These measures

include Bilateral Investment Treaties (BITs).

What are BITsAs the name suggests, a BIT is an international

agreement between two states where each

state agrees to give certain protections and

Nikhil DesaiAssociateJMiles & Co. [email protected]

Foreign Investment Protection in Africa

According to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2013, foreign direct investment (FDI) in Africa grew to USD 50 billion in 2012, a rise of 5 per cent from the previous year.

benefits to investments made by citizens and

companies of the other state and which

provides for international dispute resolution

mechanisms to settle claims by the investor

against the host state should they arise. To a

qualifying investor, a BIT will provide protections

beyond any protections contained in contractual

agreements the investor may have entered into

with the host state. Rights under a BIT exist as

a matter of international treaty law and do not

depend on the investor being in a contractual

relationship with the host state.

BITs and Africa The first BIT was entered into in 1959 between

Germany and Pakistan in the wake of the Cold-

War and nationalizations which exposed the

lack of effective protection for foreign investors.

By the end of 2012, there were over 2,500 BITs

concluded globally. To-date more than 487 BITs

have been entered into by African states of

which approximately 70 per cent have been

signed with non-African counterparties and

around 30 per cent have been signed between

two African states.

Protections provided under a BITThe protections provided under a

BIT vary depending on the negotiations and

agreement between signatory states. However,

generally a BIT will provide that each of the

states guarantee the other state’s investors

certain substantive protections, such as:

(a) Protection from expropriation – This

protection is considered to be the most

fundamental and traditional investment

protection and present in almost all BITs

(b) National Treatment – each state agrees not

to treat investment by foreign investors less

favorably than investments of its own

nationals

(c) Fair and Equitable Treatment – requires that

states maintain stable and predictable

environments consistent with reasonable

investor expectations

(d) Most-Favoured-Nation (MFN) Treatment –

a host state agrees not treat the relevant

investment less favorably than the

investment of an investor from any other

state

Interesting fact about international arbitration:

South Sudan, created in July 2011, joined ICSID in April 2012 and almost immediately had

an ICSID case instituted against it in August 2012!

Interesting fact about JMiles & Co.:

JMiles & Co. has represented clients in cases before tribunals of the ICC in London and Paris,

tribunals of LMAA, LCIA, FOSFA and ad hoc tribunals in Stockholm, Zurich and Geneva.

33








Introduction









KENYA

LegalNotes 21

ConclusionPotential investors wishing to benefit from the

protections offered by BITs will want to structure

their transaction(s) with the particular BITs in

mind, not least to ensure that they and their

investment qualify as “investors” and

“investment” under the BIT(s).

Investors should ensure that a particular BIT is

still in force as some states do not renew their

BITs after the 10 years expiry period. A recent

example is South Africa which has terminated

its BIT with Belgo-Luxembourg Economic Union

and has announced its intention not to renew

12 other BITs it previously entered into with

other European Union (EU) member states. The

reason for this is that the South African

Government feels that first-generation BITs did

not contain the necessary safeguards to

preserve flexibility in a number of critical policy

areas.

With a steady flow of investment coming into

Africa especially from the exploration and

exploitation of mineral resources, it is expected

that the availability of BITs will be an important

part of the risk management process for foreign

investors in Africa. •

The recent “Arab Spring” has given rise to a steady flow of potential BIT claims in Africa.

neither signed nor ratified the ICSID Convention).

By ratifying the ICSID Convention, ICSID member

states agree to treat an ICSID award as equivalent

to a final judgement of a court in their state.

Therefore, ICSID awards are directly enforceable in

ICSID member states and do not have to be

enforced under domestic procedures. Furthermore,

the fact that ICSID was formed and remains part

of the World Bank, acts as a deterrent to states

from failing to honor an ICSID award due to the

risk of losing World Bank funding and generally

looking like an unfriendly investment state.

Due to the confidential nature of certain

international arbitration institutions it is not

possible to state the exact number of BIT claims

involving an African party. However, an indication

of the use of BITs to bring claims against African

states can be gleaned from the fact that around

22 per cent of all claims registered at ICSID were

against an African state. The recent “Arab

Spring” has given rise to a steady flow of

potential BIT claims in Africa. Four requests for

arbitration against Egypt were registered at

ICSID in the nine-month period from March

2011 to December 2011. The cases have been

brought (or are about to be brought) under the

Egypt-UAE, Egypt-UK, Egypt-Kuwait and Egypt-

USA BITs, and in relation to investments in

property development, textile manufacturing

and the Egyptian energy industry.

(e) Repatriation of investment and earning –

each state permits the unrestricted transfer

of investments and returns made by

national of the other state

(f) Dispute Resolution –any breach of the BIT

will entitle the investor to commence

arbitration proceedings against the relevant

state. Some BITs provide for ad hoc

arbitration while others provide for

institutional arbitration (such as the

International Chamber of Commerce (ICC)

and the Permanent Court of Arbitration).

The most common forum for investment

arbitration is before the International

Centre for Settlement of Investment

Disputes (ICSID).

ICSID ArbitrationICSID was established under the 1965

Washington Convention on the Settlement of

Investment Disputes between states and

Nationals of other states (ICSID Convention).

ICSID is an impartial international forum

providing facilities for arbitration of international

investment disputes. The autonomous nature of

ICSID means that no national court has the

right to set aside an ICSID award on merits,

making it preferable for investment disputes

with state parties.

There are currently 158 signatories (147 ratified)

to the ICSID Convention globally of which 44 of

the 54 African states have signed and ratified

the ICSID Convention (4 African states have

signed but not ratified and 6 African states have

44 of the 54 African states have signed and ratified the ICSID Convention.

33








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KENYA

22 LegalNotes

Interesting fact about UAE:

The UAE has the first indoor ski village and resort in the Middle East.

Interesting fact about AC&H:

Anjarwalla Collins & Haidermota – a legal consultancy firm providing

corporate/commercial legal services – is the first African firm to be

licensed in Dubai.

Over the past decade, Dubai’s non-oil

trade with Africa increased by 700

per cent from USD 2.9 billion in 2002

to USD 23.2 billion by 2011.

His Excellency Sultan Bin Saeed Al Mansoori,

Minister of Economy in the UAE advised that

“…UAE investment in Africa is expected to

increase significantly in the coming years, with

the UAE increasing its economic diversification

efforts.” Over the past decade, Dubai’s non-

oil trade with Africa increased by 700 per cent

from USD 2.9 billion in 2002 to USD 23.2 billion

by 2011.

There is no income or capital gains tax payable

in Dubai and this fact creates a further incentive

to house businesses in the Emirates. In addition,

the UAE enjoys an extensive double tax treaty

network with over 50 countries (including a

number of African countries).

Company Establishment in the UAEThere are different types of corporate bodies

which can be established in the UAE. The

two most common forms which non-Emirati

businesses utilise are free zone companies

;and onshore companies.

Free Zone Companies A free zone company allows 100 per cent

of the shares to be owned by non-Emirati

persons. A free zone company will generally

not be licensed to operate within the UAE.

The UAE have in total more than 30 free zones.

Each free zone is industry specific and has its

own set of laws and operating procedures.

33








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The UAE: Emerging Gateway to Africa

Holly VoceAssociateAnjarwalla Collins & [email protected]

Dubai with its strategic location, world class infrastructure, modern business climate and status as an international business hub is an excellent

gateway into and out of the African continent. Investors are increasingly using Dubai as a base from which to pursue opportunities across

Africa and five key sectors have been identified which present significant opportunities for investment, namely: general trade, logistics, tourism,

agribusiness and finance.

For example, there are free zones for IT, media,

higher education, logistics, trading and general

mercantile activity, among others. Free zone

companies are entitled to visas for staff that

will be based in the UAE. There are generous

tax holidays provided by each free zone and

as there are no exchange controls in the UAE,

repatriation of income is freely permitted.

Limited Liability CompaniesA limited liability company (LLC) (onshore

company) is usually established for purposes

of trading within the local UAE market,

although an LLC can still trade internationally.

An LLC benefits from easier establishment

procedures in other Gulf Cooperation Council

(GCC) countries as compared to a free zone

company. Under UAE law, LLCs must have

a minimum of 2 shareholders of whom one

must be a UAE national who shall hold 51

per cent of the registered shares of the LLC.

The remaining 49 per cent may be distributed

among the remaining shareholders at their

discretion. It should be noted that the profit/

loss distribution need not reflect that of the

individual shareholdings in the LLC. It is possible

to arrange the affairs of an LLC such that the

foreign party enjoys total day to day control and

management of the LLC.

The main advantages to foreign investors

establishing a free zone company or an onshore

company are as follows:

(a) no personal income or capital gain taxes in

the UAE;

(b) no corporate taxation;

(c) 100 per cent repatriation of capital and profits;

(d) no currency restrictions;

(e) excellent support services; and

(f) easy access to both sea and airports.

The Dubai Airport Free Zone The Dubai Airport Free Zone (the DAFZ) was

established in 1996 and has become one of

the UAE’s fastest growing free zones. DAFZ is

currently home to 1,600 companies covering a

number of key industry sectors including aviation,

freight and logistics, IT and telecommunications,

pharmaceuticals, engineering, food and beverage,

jewellery and cosmetics.

DAFZ has become the premium free zone due

to its unique advantages such as having:

(a) a strategic location in the heart of Dubai and

neighbouring Dubai International Airport;

(b) state of the art infrastructure and facilities;

(c) a one stop shop for all administrative

services; and

(d) easy access to the facilities at Dubai

International Airport with its connectivity

to 220 destinations worldwide through

130 airlines.

LegalNotes 23

ConclusionThere is considerable investor interest in Africa,

especially in the oil and gas sector, agriculture,

infrastructure development and mining.

With the progressive double tax arrangements

that the UAE has entered into with various

African countries, the favourable tax regime,

good infrastructure and progressive service

industry, the UAE is well poised as a gateway

into investment in Africa. •

DAFZ provides international investors with

attractive business incentives including 100

per cent foreign ownership, a corporate

tax holiday for 15 years (renewable for an

additional 15 years), no personal income tax,

freedom to repatriate both capital and profits,

full exemption of import duties and no currency

restrictions.

DAFZ offers 3 types of companies which can be

established, each offering different options to

suit an investors specific business requirements.

These are:

(a) a limited liability Free Zone Establishment

(FZE) formed with one shareholder,

either individual or non-individual with a

minimum share capital requirement of AED

1,000,000 (USD 273,225);

(b) a limited liability Free Zone Company

(FZCO) formed with a minimum of 2

and a maximum of 5 shareholders,

either individual or non-individual (or a

combination of both) with a minimum

share capital requirement of AED 500,000

(USD 136,612); and

(c) a Branch Office being a branch of an

existing company which does not have a

share capital requirement.

Investors establishing a company in the DAFZ

can choose from 3 types of licences:

(a) a Trade Licence for import, export,

distribution and storage of specific

products;

(b) a Service Licence for activities as approved

by DAFZ after consultation with a DAFZ

sales executive; and

(c) an Industrial Licence for light manufacturing,

processing, assembling and packaging.

Additional investor set up support provided

by DAFZ includes processing visas, residence

permits, health cards and medical reports

for company staff.

33








Introduction









KENYA

DAFZ offers 3 types of companies

which can be established, each

offering different options to suit

an investors specific business

requirements.

24 LegalNotes

Financial Services: A financing by OPIC in the sum of USD 82 million to Wananchi Group (Holdings) Limited and its related companies incorporated in Kenya, Uganda, Tanzania, Mauritius and United Arab Emirates for a project involving development of television programming, development and operation of satellite management and delivery of business devices, providing broad band internet, data and telephonic services

Infrastructure & Telecoms: Providing and coordinating corporate and investment advice in the sum of USD 100 million in 15 countries in Africa to Tech Mahindra, a leading communications service provider, which has been contracted by Bharti Airtel to provide to business process outsourcing and telecommunications services in respect of its operations in various African countries

Mining & Minerals: Acting for a Canadian Mining Company on USD 450 million in Zambia on the disposal of interests in a copper mine and defending the company in litigation with a local partner

Oil & Gas: Acting for PTT Exploration and Production Public Company Limited (PTTEP), Thailand’s national and publicly listed petroleum exploration and production company, and also one of the largest producers of oil and gas in Asia in the proposed acquisition of Cove Energy plc – a company listed on the Alternative Investment Market of the London Stock Exchange which indirectly owns participating interests in various oil and gas exploration blocks in Kenya, Mozambique and Tanzania, including advising PTTEP on petroleum exploration laws and competition laws

Energy: Acting for Triumph Power Generating Company in connection with its development of an USD150 million, 83 MW thermal power plant in Kenya

Agriculture: Acting for Proparco in its facility of USD 23 million to Sugar Corporation of Uganda Limited, a company specialized in planting, growing and processing sugarcane. The loan was to finance expansion of production capacity by supporting out-growers, improving existing plantations under the estate, rehabilitating the factory, purchasing new equipment and refinancing outstanding loans

Projects and Infrastructure: Acting as lead advisor to Botswana Power Corporation on a USD 16 billion Mmamabula coal development project

33








Introduction









KENYA

Representative DealsALN enjoys close working relationships across its members and an established network of best friends across the African continent.

By leveraging the expertise and skills of each member firm, the group offers seamless legal advisory and transactional services, particularly on

complex ad multi-jurisdictional matters. ALN’s continued success in advising on cross-border matters comes from its “one firm” approach of

collaborating in virtual teams across multiple offices.

Horizon’s primary activities are M&A advisory, capital raising and

corporate fi nancial brokerage in Sub-Saharan Africa.

Our approach is based on providing differentiated, integrated

fi nancial advisory services throughout the life of a transaction,

from inception to execution. We have expertise in a number

of sectors including Energy, Real Estate, Heavy and Light

Manufacturing, Hospitality, Aviation and Agro-processing.

Our value proposition is enhanced by the strength and breadth of

our relationships. Horizon has cultivated a strong global network

of private equity fi rms, family investment offi ces, development

HORIZON AFRICA CAPITAL LTDApollo Centre, 2nd Floor Wing A, Ring Road Parklands

P.O. Box 103646, Nairobi 00101, Kenya

Tel: +254 20 3742614/5 | Mobile: +254 717 722827

Website: www.horizonafrica.com

Horizon Africa Capital is a boutique mergers and acquisitions (M&A) advisory fi rm headquartered in Nairobi, Kenya

fi nance institutions and commercial banks from which it routinely

draws upon to identify investment opportunities and potential investors

for transactions in Africa. Our network also includes the ALN, a leading

independent African Association of top tier law fi rms specializing in

corporate and commercial legal work.

Horizon is Global M&A’s fi rst African partner, and its exclusive

partner for Kenya. Global M&A is an international partnership of

leading independent M&A advisory fi rms specialized in mid market

transactions in a range of $5M – $500M. As GMA’s Africa partner,

Horizon also serves the adjacent territories of Uganda, Tanzania,

Ethiopia, South Sudan, Rwanda, Burundi and Zambia.

Horizons

ExpandingBusiness

Horizon Africa.indd 5 10/3/13 2:13 PM

ALNEmail: [email protected]

ALN HEADQUARTERSPort Louis, MauritiusTel: +230 213 7920Email: [email protected]

www.africalegalnetwork.com

ALN Member Firms