Meeting Africa on its terms: Expansion into Africa now depends on legal insight, not just ambition
There’s the theory of law, and then there’s the practice on the ground. Partner at law firm Cliffe Dekker Hofmeyr (CDH) Kenya, Njeri Wagacha, writes about how businesses looking to expand into Africa will need to be attuned to both if they hope to build something sustainable.
Africa remains an alluring land brimming with economic opportunity. The International Monetary Fund recently found that nine of the world’s 20 fastest-growing economies in 2024 are African. Our continent is projected to account for over half of global population growth by 2050. All this and we boast a median age of only 19, making this one of the most dynamic regions in terms of market potential and workforce expansion.
For investors, these fundamentals are compelling. Yet recent retrenchments by multinationals have sent mixed signals: a sobering reminder of Africa’s operational complexity, but also a wake-up call for smarter, better-prepared expansion strategies.
Africa certainly hasn’t lost its viability, so investors are forced to confront the complexity head-on. High-growth potential still defines many African markets, from the fintech corridors of Nigeria to the energy build-out in Mozambique. But as the policy and regulatory environment evolves, the margin for error is shrinking.
Companies are increasingly aware that a successful African strategy requires far more than a compelling business model. What we’re seeing now is a move away from the idea that you can replicate a global playbook here. You have to take the time to understand each jurisdiction on its own terms – i.e. laws, political climate, and institutional realities.
The intricacies of doing business in Africa are hardly new. But what has shifted in recent years is the pace of regulatory change. From local content rules to ESG reporting obligations and the digitisation of tax systems, many African governments are tightening compliance regimes and modernising their frameworks. While this is a welcome shift in terms of governance and transparency, it can also create uncertainty for companies that lack local insight. There’s a definite increase in red tape, but also in expectations. Yes, governments want investment. But they also want it on terms that serve their national development goals and agenda. That means businesses need to be smarter and more agile to African change.
One of the more promising developments is the slow but steady implementation of the African Continental Free Trade Area (AfCFTA) Agreement. This has sparked optimism around the possibility of greater regulatory harmonisation. Yet for now, investors must still navigate the continent’s legal patchwork. Labour laws in Zambia won’t match those in Kenya. Exchange control restrictions in Angola won’t reflect those in Ghana. Understanding the business climate means understanding the law and how it is applied in practice.
This is where deep local insight becomes a competitive advantage. The difference between successful and failed expansion often comes down to how well a business reads the local environment, not just the statutes, but the soft infrastructure around them. Enforcement, access to regulators, court efficiency, and even social license to operate all matter, making the journey a lot more complicated.
In response to this increasingly complex operating environment, CDH recently released its 2025 Africa Corporate Guide. While not the primary focus of the story, the guide leverages the firm’s extensive experience across eighteen (18) jurisdictions to provide businesses with a clearer understanding of regulatory landscapes, sectoral nuances, and practical pathways for market entry and compliance. It’s not a silver bullet, but a reminder that in Africa, knowledge isn’t just power, it’s protection.
It’s not just foreign investors who need this level of insight. African companies themselves, especially those scaling across borders, contend with the same challenges. There’s a massive amount of intra-African activity happening from regional expansion to mergers, to cross-listings, and beyond. These businesses are just as in need of strategic legal guidance, and in many cases, they’re more agile in how they respond to local dynamics.
The risk narrative surrounding Africa has always been a dominant one, but it rarely presents the whole picture. For those willing to invest the time and resources into understanding the contours of local law and policy, the continent still offers some of the world’s most compelling growth stories. But that growth depends not just on optimism, but on insight.
In this climate, success is less about bold moves and more about informed moves. It’s not about whether Africa is open for business – we have been open for a while now. This all comes down to whether businesses are prepared to meet Africa on its varied terms.
