Regulatory inconsistency is Africa’s undoing

Posted on July 10, 2014 03:14 pm

A major problem highlighted in the World Bank report on Africa recently that reviewed development policies, notably economic issues in general, was related to what the multilateral development bank saw as inconsistencies and uncertainties around laws and government regulations. The report cites some examples of inconsistencies or even contradictions between the laws on investment and other sectors such as the mining Laws and the sub saharan Africa government regulation on the negative investment list. The World Bank also points to an acute lack of consultation between the government and other stakeholders in drafting laws and regional bylaws and a lack of coordination in law enforcement.While going through the report, it is clear that laws that are meant to protect current and future investors seems ineffective because there are simply no official guidelines for consultations with affected parties in the regulatory decision-making process. The formulation of laws or regulations is often not based on the quantitative assessments of the economic impact, as is clearly evident in the recent ban on the export of unprocessed minerals. Hence, the world bank experts suggests that the overall framework for the formulation of laws and regulations requires a holistic government approach for regulatory policies, including responsibility for the coordination and oversight of regulatory policy and a commitment to assess the cost-benefit of new regulatory proposals and existing regulations.
A report based on a study on regulatory reform in selected five sub saharan African countries namely Uganda, Ghana, Kenya, Nigeria, Zambia and South Africa in 2011, also critically points to the absence of a single entity in the government that is accountable for ensuring that laws and regulations serve whole-of-government policy objectives.The report went as far as suggesting that the function of the recommended single government entity should be taken up by the office of the coordinating agency. Establishing a single government entity responsible for and charged with regulatory oversight at the central government level and tasked with promoting evidence-based decision-making and coordinating with other government entities could be the key to ensuring that laws or regulations serve a whole-of-government policy and that is where Ugandan government has taken a leading role in the region with establishment of Uganda Investment Authority. In a democratic, decentralised African countries like South Africa, Nigeria and Kenya with regional autonomy, formulating laws, regulations and policies should naturally become more challenging and tough as the process are based on political rather than economic consensus. But hey, that is what democracy is all about.

Contador Harrison