May 2017

Tempered Optimism: Africa in 2017

LEX Africa’s Pieter Steyn talks to AR3

Pieter Steyn

Pieter Steyn is Chairman of LEX Africa and Director of Werksmans Attorneys in South Africa. He is Co-Chair of the International Bar Association’s Antitrust Committee, and a member of the Competition Law Committee of the Law Society of the Northern Provinces. He is a specialist in South African corporate and competition law, corporate governance, joint ventures and Black Economic Empowerment. Steyn has been cited in The International Who’s Who of Competition Lawyers & Economists (2015), The Guide to the World’s Leading Financial Law Firms (2011 and 2012), and the International Who’s Who Legal (2007-2015). His pro bono work is extensive, and includes pro bono advice to the Jane Goodall Institute South Africa, and campaigning for cancer and education charities.

LEX Africa is the continent’s largest alliance of law firms. They currently link leading firms across 20 countries in some of Africa’s highest-growth regions. Formed in 1993 by South African law firm Werksmans Attorneys, the alliance was eager to develop a regional market that had been out of bounds due to South Africa’s apartheid regime. AR3 spoke with Werksmans Director and Chairman of LEX Africa, Pieter Steyn, about the alliance’s evolution and the current state of the African market.

AR3: How do you see the state of Africa in 2017?

PS: In 2000, the venerated London weekly The Economist called Africa the  “Hopeless Continent”. A decade later, the catchphrase was “Africa Rising”.  In 2017, attitudes towards Africa’s prospects might be best described as ‘tempered optimism’.  The collapse of oil prices and consequent dip in the commodity market has undoubtedly affected many African economies.  But there are continued bright spots and potential.  One cannot take a short-term view on Africa.  The biggest oil and gas producers including Nigeria, Africa’s largest economy, Ghana and Angola have realized they need to make significant progress towards diversification. Despite recent political turmoil, Ethiopia’s economic fundamentals appear strong. Cote d’Ivoire is recovering, and Senegal is quietly positioning itself as a regional hub. Botswana and Namibia remain examples of proficient governance and East African countries are an excellent example of regional integration initiatives. Over the last decade we have seen the growth of local and regional African chains and conglomerates dealing in consumer goods, airlines, telecommunications, etc.  Foreign firms that used to go uncontested, are seeing increasingly strong local competition.  The African hotel and tourism industry has great potential despite localized crises in tourist-heavy economies like Egypt and Tunisia.  Private equity firms are still looking for deals and infrastructure projects remain crucial.

AR3:  What concerns you most about the prospects for African growth?

PS: On a structural level, internal and external barriers to trade are major impediments. It remains to be seen what a Trump administration will do with Africa, and what effect this will have on continental growth  and development – will the US now consider trade-promotion initiatives like the African Opportunity & Growth Act (AGOA), and Power Africa?  What will happen to the pace of innovation and technology transfer? It took the US a long time to warm up to changes in Africa, and if they U-turn it may not be readily addressed by other partners like China, Europe or Japan.  Low levels of intra-Africa trade are still the continent’s Achilles heel, as this only represents around 11% of total Africa trade.  The solution to these problems is not just signing more trade deals and trade blocs, but more and improved implementation in practice, driven by strong business imperatives and public-private partnerships.  This requires political will on the part of African governments to create an enabling environment for trade and investment.

AR3:  How did LEX Africa come about?

PS: LEX Africa is an alliance of 20 African law firms, comprising over 600 lawyers with a shared Pan-African vision and values.  The alliance is lean, and its mission is to be a “gateway to Africa” in order to assist and advise clients to take advantage of African business and other opportunities.  Cross border practice groups allow LEX Africa to provide a “one stop shop” service to clients. While LEX Africa is not a political or lobbying organization, we support continental initiatives, for example, by the World Bank and African Union.  Africa is a diverse continent, and a deep understanding not just of the law but also of local politics, business, social conditions and culture is key to success in the market. Having the right local networks and maintaining long-term relationships is also important.  While our core competency is law, clients also engage us to navigate local conditions.   Having reputable and experienced legal “boots on the ground” is a key strength of the alliance.

AR3: How does LEX Africa attract new members? The alliance currently links 20 countries mainly in Southern, West and East Africa – what next?

PS: We identify potential members by a careful due diligence process, based in part on international rankings, track record, specialist skills, number of lawyers and reputation. Member firms play a strong role in the process, proposing members and weighing in on their experience with candidate firms.  LEX Africa is represented by a single firm in each country to avoid conflicts and simplify administration. We are not aiming for growth for growth’s sake.  When our members do well, the alliance does well so we actively seek to profile our members and introduce them to potential clients and contacts worldwide.  LEX Africa is rated as a Band 1 regional law firm network by Chambers and Partners, and our members are listed as top performers by several rating agencies including IFLR1000 and Legal 500.  We are currently in the process of identifying members in markets where we see promise, including Morocco, Egypt, Cameroon and Cote d’Ivoire.