On November 5th, the Governor of the Central Bank for Central African States (the “BEAC”) issued a decision to extend the moratorium period granted to extractive companies to comply with CEMAC Regulation No. 02/18/CEMAC/UMAC/CM relating to foreign exchange (the “New CEMAC Regulation”) until 31 December 2021.

This is rather good news for mining and petroleum companies, which were bound to comply with the New CEMAC Regulation from early next year, although this concession from the BEAC should not necessarily be construed as evidence that the BEAC is giving up its intention to fully enforce the New CEMAC Regulation towards extractives companies.

The New CEMAC Regulation was adopted on 21 December 2018 and entered into force on 1 March 2019. Companies were originally granted a six month period (starting from the New CEMAC Regulation’s effective date) in order to comply with the New CEMAC Regulation.

Following the expression of various concerns by the extractive companies relating to the impacts of the regulation on the conduct and financing of their operations (especially with regards to the restrictions on the opening of offshore accounts), as well as lobbying initiatives at BEAC level, the BEAC agreed to enter into discussions with the extractive companies regarding the postponement of the date for compliance with the New CEMAC Regulation.

As a result, the Governor of the BEAC issued a decision, dated 12 November 2019, whereby it granted to extractive companies a moratorium period up to 30 December 2020 in order to comply with the New CEMAC Regulation. The rationale of that decision was to allow the BEAC and extractive companies to discuss the conditions in which the New CEMAC Regulation would be applied to extractive companies.

The decision also provided for the extractive companies’ obligation to share sensitive information with the BEAC no later than 31 January 2020, including but not limited to:

  • information on their onshore and offshore accounts and agreements thereto related;
  • loans, borrowings and other agreements entered into with banks located outside of the CEMAC area; and
  • contracts entered into with CEMAC Member States (including oil and mining contracts).

The discussions reached a dead end in the first quarter of 2020, as BEAC representatives and extractive companies were having difficulties to hold meetings due to the COVID-19 pandemic and, consequently, the Governor of the BEAC issued a decision to extend the moratorium period granted to extractive companies, thus giving them additional time to comply with the New CEMAC Regulation.

Interestingly, this decision expressly provides in its preamble that the extension is granted for the purposes of allowing the BEAC and extractive companies to resume workshops relating to the enforcement of the New CEMAC Regulations which could not be convened due to COVID-19.

This approach suggests that the BEAC has not given up its intention to enforce the New CEMAC Regulation towards extractive companies. The following also seem to be strong indications which further suggest that the BEAC intends to pursue a strict application of the regulation:

  • the new decision, unlike the previous one, expressly provides that extractive companies will lose the benefit of this new extension and will be subject to the New CEMAC Regulation with immediate effect if they fail to send to the BEAC the information referred to above before 30 April 2021; and
  • the new decision includes an additional provision (in comparison with the previous one) whereby, upon the expiry of the moratorium period, extractive companies will be bound by the obligation to regularise the situation of their accounts as well as all operations which were performed before the entry into force of the New CEMAC Regulation and during the moratorium period by complying with all the relevant obligations and formalities set out under the New CEMAC Regulation.

For more information, please contact Bertrand Montembault, Louis de Longeaux and Sina Abadie or your usual Herbert Smith Freehills contact:

Bertrand Montembault

Bertrand Montembault
Partner, Paris
+33 1 53 57 74 19

Louis de Longeaux

Louis de Longeaux
Partner, Paris
+33 1 53 57 74 07

Sina Abadie

Sina Abadie
Associate, Paris
+33 1 53 57 78 50


This brief addresses notable developments in competition law in South Africa and across the rest of Africa during the course of 2020. It includes the measures introduced by various competition law regulators in light of the COVID-19 pandemic and related cases and prosecutions.

Please click here for the detailed report.

For more information, please contact Jean Meijer, Nick Altini, Leana Engelbrecht, Sandhya Foster, Lesetja Morapi and Stewart Payne or your usual Herbert Smith Freehills contact:

Jean Meijer

Jean Meijer
Partner, Johannesburg
+27 10 500 2642

Nick Altini

Nick Altini
Partner, Johannesburg
+27 10 500 2679

Leana Engelbrecht

Leana Engelbrecht
Associate, Johannesburg
+27 10 500 2674

Sandhya Foster

Sandhya Foster
Associate, Johannesburg
+27 10 500 2643

Lesetja Morapi

Lesetja Morapi
Associate, Johannesburg
+27 10 500 2677

Stewart Payne

Stewart Payne
Associate, Johannesburg
+27 10 500 2649



Herbert Smith Freehills celebrated the fifth anniversary of the launch of its office in Johannesburg, South Africa on 1 November 2020.

  • The office has grown from a small team of two to a total staff complement of more than 85 including partners, lawyers and business services staff.
  • With 7 partners and 5 senior consultants and directors on the ground, the firm provides a full-service offering to its global and local clients, covering corporate, disputes, competition and finance.
  • The firm regularly advises JSE-listed clients, including 11 of the Top 40 companies. Some key examples of the firm’s clients include Anglo American, BHP, Harmony Gold, First Rand, Standard Bank and Bombela.
  • We have successfully built a cross-practice team of 31 Alternative Legal Services (ALT) professionals, which has quadrupled in size in less than three years.
  • Over 50 graduates have been trained through ALT’s innovative International Legal Development Programme, the first of its kind in the South African market. The 18-month programme is designed for talented legal graduates to work on high profile global matters while being trained in process and tech-enabled legal service delivery. They will be prepared for the next step in their career through mentoring and coaching.

Ed Baring, managing partner of the Johannesburg office, commented: “Our investment in South Africa has surpassed our expectations. From our hub in Johannesburg, we have been able to expand our African business, providing clients across the Continent with access to exceptional legal expertise, combining the best of local and international experience. We are especially proud to have been able to create over 85 jobs in South Africa since opening our doors in 2015, and to provide global best practice and experience to many young lawyers.”

Over the past 5 years, the office has advised on over 1,500 matters. Selected mandates include:

  • Bombela (the preferred bidder and now concessionaire) on all legal aspects of the bid preparation for the Gautrain Rapid Light Rail PPP (the first light rail PPP in Southern Africa); then on the negotiations as preferred bidder, including all finance and project documents, as well as drafting and reviewing those documents
  • Absa Bank Limited, Nedbank Limited, FirstRand Bank Limited, and The Standard Bank of South Africa Limited (the lenders) on the the expansion, upgrading and improvement of the Beitbridge border post in Zimbabwe
  • Harmony Gold Mining Company Limited in relation to the acquisition of AngloGold Ashanti’s Mponeng Mine (the world’s deepest mine) and related operations in South Africa for circa US$300m
  • CFAO Group in relation to the acquisition of Steinhoff’s Southern African auto dealerships division, one of South Africa’s largest auto showrooms and a network of trucks dealerships with annual sales of more than 23 billion Rand ($1.6 billion)
  • Gartner Inc. in relation to its representation at the Nugent Commission of Inquiry in respect of consultancy services provided to SARS regarding the restructuring of SARS’ IT systems
  • Afgri Grain Silo Company, a borrower, on the ZAR billion transaction involving the subscription of shares in the borrower, by FirstRand Bank Limited (acting through its Rand Merchant Bank division), and contributions of shareholder loans to the borrower by its shareholders
  • Acting for four banks in two international banking groups in the Competition Commission’s continued prosecution of multiple banks on allegations of collusion in ZAR / US$ exchange transactions.
  • the Kingdom of Saudi Arabia as international legal counsel on the Ministry of Industry and Mineral Resources’ mineral law reform project
  • a globally diversified natural resources company on disputes with the Government of Zambia including developing and facilitating an international advocacy strategy
  • Government of Malawi in relation to the development and financing through a PPP model of the proposed 450MW Mpatamanga Hydropower Project funded by the IFC
  • Standard Chartered Bank and Standard Bank on a sovereign bridge loan facility of USD500,000,000 advanced to the Government of the Republic of Ghana (acting through its Ministry of Finance) to fund various infrastructure development projects and liability management in the Republic of Ghana as approved in its 2019 budget

Key milestones

  • October 2015: Launch of the Johannesburg office with two partners – energy and infrastructure finance lawyer Brigette Baillie and top mining lawyer Peter Leon
  • May 2016: Rudolph du Plessis joined as a corporate partner
  • February 2017: Competition partner Jean Meijer and project finance consultant Biddy Faber expanded the office offering. Meanwhile, finance partner Ed Baring relocated from Moscow to become the Johannesburg office’s managing partner
  • August 2017: Launch of ALT team in Johannesburg
  • January 2018: Jonathan Ripley-Evans joined as Disputes Director, adding arbitration capability to the offering
  • August 2018: Cameron Dunstan-Smith joined the Corporate Crime and Investigations practice as Disputes Director
  • July 2019: Nick Altini joined as a competition partner, Ross Lomax as a corporate partner, Rohan Isaacs as a senior consultant in technology and privacy, resulting in a total of 13 appointments
  • June 2020: Vanessa Kingsmill appointed Head of Alternative Legal Services in Johannesburg

About Herbert Smith Freehills Africa Practice
Herbert Smith Freehills has an unrivalled understanding of the African market derived from a deep track record acting on matters on the continent for over 40 years, and across all practice groups and industry sectors. The Africa Practice is serviced by more than 180 partners from across the firm’s global network of offices, including over 80 lawyers from its Johannesburg office. The firm has Africa desks in each of its international hubs comprising lawyers who have experience in Africa and who work regularly with specialist Africa lawyers from elsewhere across the firm’s network. Herbert Smith Freehills has worked on matters in all of Africa’s 54 countries (covering French, English, Portuguese, Spanish and Arabic-speaking jurisdictions), and over 1000 matters in FY2019-20.

About Herbert Smith Freehills
Operating from 26 offices across Asia Pacific, EMEA and North America, Herbert Smith Freehills is at the heart of the new global business landscape providing premium quality, full-service legal advice. The firm provides many of the world’s most important organisations with access to market-leading dispute resolution, projects and transactional legal advice, combined with expertise in a number of global industry sectors, including Banks, Consumer products, Energy, Financial buyers, Infrastructure & Transport, Mining, Pharmaceuticals & Healthcare, Real estate, TMT and Manufacturing & Industrials.

Follow us online:

For more information, please contact Ed Baring or your usual Herbert Smith Freehills contact:

Edward Baring

Edward Baring
Managing Partner, Johannesburg
+27 10 500 2630


For our clients looking to invest in the “green” energy sector, the African renewables market is occupying a growing space in strategic thinking. Projected GDP expansion and rapid population growth will drive up energy demand in Africa, which combined with the presence of rich renewable resources (including wind, solar, geothermal and hydropower) means that African renewables is seen as a clear growth market.

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Authors: Peter Leon, Ernst Muller and Natasha Rachwal

Negotiators have an opportunity to fashion a regime that supports modern investment policies by promoting sustainable development. 

With less than three months before the expected conclusion of negotiations on the African Continental Free Trade Area’s (AfCFTA) protocol on investment increasing attention is being paid to the protocol’s likely investment protections and rights of recourse for investors in Africa.

While it should establish a pragmatic framework for investment across the continent, the effect of the global Covid-19 pandemic on Africa and the concomitant economic uncertainty underscores the need for a predictable, fair regulatory environment.

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Authors: Bertrand Montembault and Louis de Longeaux

Dans un contexte où l’Afrique s’apprête à faire face à une raréfaction considérable des investissements directs étrangers, une attention particulière doit être portée à tout facteur susceptible d’affecter le climat des affaires.

Au rang de ceux-ci, la réglementation des changes risque de jouer un rôle non négligeable dans les pays africains de ce qu’il était convenu d’appeler jusqu’à présent la « Zone Franc ».

L’UMOA et l’UMAC se sont dotées à l’orée des années 2000 d’une réglementation se substituant aux réglementations nationales prévoyant notamment un encadrement de l’ouverture des comptes en devises et une obligation pour leurs résidents de rapatrier leurs recettes d’exportation.

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Authors: Nila Wilde, Martin Kavanagh, Rebecca Major and Joanne Elson

For Africa-focused developers and sponsors in the renewable energy market, ESG is likely in the forefront of your minds and it is important to show knowledge of what is expected in the responsible investing market in order to ensure swift project development and to enhance bankability. This handy guide profiles the key factors relating to ESG which may impact your business. We hope that this guide provides you with a better understanding of the ESG expectations in the responsible investment market. We are keen to speak with you about your approach to ESG and how we can help you achieve your strategic goals in the Africa renewable energy space.

You can download the English/French version of the brochure below.



For more information, please contact any of the lawyers below or your usual Herbert Smith Freehills contact:

Stephane Brabant

Stephane Brabant
Partner, Paris
+33 1 53 57 78 32

Antony Crockett

Antony Crockett
Of Counsel, Hong Kong
+852 210 14111

Oliver Elgie

Oliver Elgie
Senior Associate, London
+44 20 7466 6446

Joanne Elson

Joanne Elson
Senior Associate, London
+44 20 7466 2802

Martin Kavanagh

Martin Kavanagh
Partner, London
+44 20 7466 2062

Rebecca Major

Rebecca Major
Partner, Paris
+33 1 53 57 78 31

Elsa Savourey

Elsa Savourey
Avocat, Paris
+33 1 53 57 76 79

Nila Wilde

Nila Wilde
Avocat, Paris
+33 1 53 57 65 50


Author: Jenna Cavanagh


In collaboration with G3, HSF is hosting a breakfast roundtable discussion on ‘Digital transformation in Africa’ on 12 March in our London office. The discussion will be led by Rohan Isaacs, Martin Kavanagh and Charlie Morgan along with Darcie Allen from G3 and will centre around the opportunities arising from digitalisation in Africa and the practical, regulatory and legal risks that investors need to navigate them.

For more information or to register for the event, please contact Jenna Cavanagh or your usual Herbert Smith Freehills:

Jenna Cavanagh

Jenna Cavanagh
Senior Business Development Executive, London
+44 20 7466 2301


Authors: Peter Leon, Ernst Muller and Natasha Rachwal

Evolution of the AfCFTA 

A significant milestone has been reached in the economic integration of Africa, with the creation of the African Continental Free Trade Area (“AfCFTA”). Opened for adoption at the African Union (“AU”) Summit in Kigali in March 2018, the Agreement establishing the AfCFTA (“AfCFTA Agreement”) has been signed by 54 of the 55 AU member states (tiny Eritrea being the lone exception), and ratified by 28, including major economies such as Egypt, Ghana, Kenya and South Africa, but not Nigeria. AfCFTA entered into force in May 2019, a month after the requisite 22 states deposited their instruments of ratification with the Chairperson of the AU Commission (satisfying the minimum requirement for the Agreement’s entry into force). For trading purposes, however, the AfCFTA only becomes operational on 1 July 2020.

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Author: Peter Leon

Peter Leon’s notes delivered during the EAST AND CENTRAL AFRICA MINING FORUM.



The African continent is endowed with abundant natural resources, including about thirty per cent of the world’s mineral reserves.

Historically, however, most resource-rich African countries have been categorized as low income countries. In fact, analysts have observed a negative impact of resource abundance—particularly mineral resources—on long-term economic growth.

To establish the key drivers of the long-term negative impact, analysts have studied the growth in per capita income in forty-seven African countries from 1990 to 2014 and compared it with each country’s primary resource (agriculture, fisheries, forestry and hunting) as well as oil and mineral resource production during the same period.

The results of their analysis indicates that the phenomenon, known as the resource curse, is primarily owing to market related factors (especially commodity price fluctuations) which, in turn, are aggravated by political factors that relate to institutional quality and rent-seeking.

The most significant and insidious effect of resource abundance is often the destabilising effects suffered by other economic sectors when a country becomes overly dependent on exports of a single natural resource.

Studies indicate that there tends to be a direct correlation between commodity prices and gross domestic product (“GDP“).

The fluctuations in commodity prices in turn affect the GDP of the country if the country is largely dependent on the commodity in question. African countries where this trend was recently observed include the Democratic Republic of Congo, Gabon, Sudan and Nigeria.

The effect of fluctuating commodity prices is exacerbated in countries where little economic diversification has taken place, and the economy thus remains overly dependent on the income derived from exports of specific raw commodities.

A leading example is Zambia, where economic development has been hamstrung by over-reliance on copper exports, accounting for over 60 per cent of export earnings in 2018, and insufficient reinvestments of the income from the depletion of its natural capital.

Despite the economic causes underlying the paradox, the impression that African states are not reaping the benefits of their mineral wealth also gives rise to a growing discontentment with the disparity between the profits which foreign investors receive through the exploitation of the mineral resources and the poverty in which the citizens live.

This has given rise to various disputes. Recent examples include those between Acacia Mining plc and Tanzania, First Quantum Mining and Zambia, Vedanta Resources Holdings Limited and Zambia as well as the Gerald Group and Sierra Leone.

In an attempt to address this, a number of African governments have embarked on sweeping mineral law and fiscal reform. As part of the process, the governments often:

  • introduce higher royalties and windfall profit taxes;
  • issue significant new tax assessments;
  • introduce or increase compulsory minimum quotas for:
  • shareholding and board representation by the host state or its citizens;
  • local beneficiation, often through export restrictions;
  • procurement of local goods and services (including financial services);
  • recruitment and promotion of local personnel; and
  • importantly, renegotiate investor-state contracts that stand in the way of these measures.

These changes to a country’s mineral law regime are often without the support of the mining sector, which can lead to further animosity between the government and foreign investors.

Such reforms can likewise constitute a breach of the protection afforded to mineral right holders under the mineral development agreements to which they and the host governments are party. To assert their rights, investors frequently invoke the stabilisation provisions provided for in such agreements and refer these disputes to international arbitration.

Ironically, the disputes between foreign investors and host governments tend to be rooted in the historic imbalances which arise from the mineral development agreements themselves.

While the ability to regulate the economic consequences occasioned by the resource curse lies squarely with the domain of the African governments, it should be possible to better regulate the long term relationship between the host governments and foreign investors.

In this regard, the OECD’s recently approved Guiding Principles for Durable Extractive Contracts (Guiding Principles) set out eight principles that host governments and investors can use as a common reference for future negotiations of enduring, sustainable and mutually beneficial extractive contracts.

The purpose of the principles is to assist host governments and investors using them to:

  • structure their on-going relationship in an integrated manner to promote long term sustainable development, while attracting and sustaining investment;
  • foster alignment of expectations and convergence towards agreed objectives;
  • provide mechanisms that can accommodate and respond in a predictable manner to potentially significant changes in circumstances;
  • build trust to strengthen mutual confidence and reduce risk for both parties; and
  • ensure a fair share for all parties to the contract and optimise the value from resource development through equitable, sustainable and mutually beneficial contracts and operations.

Under the Guiding Principles extractives contracts are likely to be durable if they:

are aligned with the long-term vision and strategy, defined by the host government on how the extractive sector can fit into and contribute to broader sustainable development objectives;

are anchored in a transparent, constructive long-term commercial relationship and operational partnership between host governments, investors and communities, to fulfil agreed and understood objectives based on shared and realistic expectations that are managed throughout the life-cycle of the project;

balance the legitimate interests of host governments, investors, and communities, with due account taken, where relevant, of the specific rights of affected indigenous peoples recognised under applicable international and/or national law;

seek to optimise the value from resource development for all stakeholders, including economic, social and environmental outcomes. This would include identifying and managing potential adverse environmental, health, safety and social impacts of the extractive project and establish clear roles and responsibilities for the host government and the investor for the prevention, mitigation and remediation of those impacts, in consultation with affected communities;

are negotiated and based on the continued sharing, in good faith, of key financial and technical data to build a common understanding of the performance, main risks and opportunities of the project throughout its life-cycle;

operate in a sound investment and business climate which must be underpinned by a fair, transparent and clear legal and regulatory framework and enforced in a non-discriminatory manner;

are consistent with applicable laws, applicable international and regional treaties, and anticipate that host governments may introduce bona fide, non-arbitrary, and non-discriminatory changes in law and applicable regulations, covering non-fiscal regulatory areas to pursue legitimate public interest objectives; and

are underpinned by a fiscal system that is consistent with the governments’ overall economic and fiscal objectives and provides a fair sharing of financial benefits between the investor and the host government, taking into consideration the potential risks, rewards, and country circumstances.

While there is no one ideal fiscal regime, host governments ought to identify the optimal mix of fiscal instruments and terms to meet their objectives. In my experience, a predictable fiscal regime that includes responsive terms defined in legislation and or contracts to adjust the allocation of overall financial benefits between host governments and investors contributes to the long-term sustainability of extractive contracts and reduces the incentives for either party to seek renegotiation of terms.

The costs attributable to compliance with changes in law and regulations, and wholly, necessarily and exclusively related to project specific operations, in turn, should be treated as any other project costs for purposes of tax deductibility, and cost recovery in production sharing contracts.

If such changes in law and or applicable regulations result in the investor’s inability to perform its material obligations under the contract or if they lead to a material adverse change that undermines the economic viability of the project, durable extractive contracts require the parties to engage in good faith discussions which might eventually lead the parties to agree to renegotiate the terms of the contract.

Ultimately, transparency, predictability and a process of continued dialogue between the host governments and investors are key to the success of a project and an equitable sharing of benefits that result from the exploitation of the minerals.

For more information, please contact Peter Leon or your usual Herbert Smith Freehills contact:

Peter Leon

Peter Leon
Co-Chair of Africa Practice Group, Johannesburg
+27 10 500 2620