2017 Annual Global Rule of Law Exchange Conference

SMEs and the Rule of Law in Africa: legal developments, regulatory challenges and prospective solutions

Date:Thursday 12, October 2017

Venue: Jones Day, 300 New Jersey Avenue, NW, Washington, DC 20001

Conference overview

It is well known that the Rule of Law is the foundation of a society, and a key factor for sustainable development and for stable, broad-based economic growth. The Rule of Law assists the operations of free-markets and the stability of commercial arrangements, through clear, non-discriminatory, non-retroactive legislation, which benefits everyone, including small business owners. The Rule of Law is also important to safeguard corporate legal personality, property rights (including for intellectual property), neutral courts and a clear and fair process for the determination of rights and obligations. The Rule of Law is therefore important for the Small and Medium Enterprise (SME) sector.

Although SMEs can vary in size from country to country, they are typically recognised as being the backbone of any economy, and Africa is no exception. SMEs are an important engine of growth and employment. Nevertheless, SME development is often constrained by a number of obstacles: financial (access to finance and limited access to markets), administrative (laws & regulations) and technical or internal (e.g. lack of access to appropriate technology, poor management skills, etc).

While accessing capital and financing is among the most important obstacle to SME growth, some of the pressing legal and regulatory issues include among others: corruption; obtaining business permits (which in some cases can take long); lack of dispute settlement mechanisms and inefficient court systems. The cost of compliance - for example for tax and labour laws, and health and safety regulations - is also said to be great for SMEs and comparatively higher than bigger companies. Moreover, there are also sector-specific legal and regulatory issues that affect the SME sector (e.g. in agriculture, energy or 'financial-technology).

What concrete examples help illustrate legal and regulatory issues affecting SMEs in Africa? What does an enabling legal and regulatory environment for SMEs look like? What is the effect of an unfavourable regulatory and legal environment on investors and SME growth? Are local SMEs at a competitive disadvantage compared to international SMEs and investors, or are rules and regulations the same and equally enforced for everyone? What is the cost of compliance to African SMEs? What solutions are in place to address the abovementioned legal and regulatory issues, and how can other countries learn from these? What is the role of Governments and the private sector in developing a better SME sector in Africa? What are the incentives or disincentives for progress? And how is the Rule of Law - through principles such as legal certainty and access to justice - important for the SME sector?

Drawing on the experience of government representatives and international organisations, entrepreneurs, international investors, the legal profession and representatives of the judiciaries, the conference will address some of these questions and discuss the vital role of the Rule of Law in the development of Africa's Small and Medium Enterprises (SMEs) sector. Specifically, the conference will seek to identify the legal and regulatory obstacles that constrain African SMEs, and highlight practical solutions to addressing these.


Note: This conference is co-organised by the Bingham Centre for the Rule of Law and Jones Day with support from the Jones Day Foundation. See other acknowledgments


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