Karim Anjarwalla: “Laws on financial sector and insolvency are advanced in Mauritius”

The bilingual legal framework in Mauritius can prove very strategic for opportunities in Africa. The Managing Partner of Anjarwalla & Khanna Chambers based in Kenya, designated African law firm of the year 2013, elaborates on ways and means of tapping into this potential.

BUSINESSMAG. What is your assessment of the legal framework in Mauritius?

Mauritius is increasingly becoming the centre for Africa dispute resolution for a number of reasons. Firstly, because you have a judiciary which is highly respected and free from political control along with this quite unique system of the French and English based legal framework. The final court of appeal is the Privy Council which is a tremendous source of comfort for investors.

The country has more recently launched the London Court of International Arbitration and the Permanent Court of Arbitration with their own seats here which I think will attract more contracts related to Africa; whether
it involves contracts drawn under the Mauritian law or dispute resolution.

The laws concerning the financial sector and insolvency are so advanced that Mauritius is now becoming the obvious point from which to structure holding companies, funds and funds vehicles.

BUSINESSMAG. There is much talk about using Mauritius as a hub for investment into Africa. Can it apply to the legal sphere as well?

Yes and I think the African Legal Network is a good example of this possibility. A legal firm such as BLC Chambers, which is a member of ALN, deals with Mauritian and international clients as well. BLC is able to coordinate its clients’ needs and interests across the continent through its membership in ALN, which would have otherwise proved difficult.

BUSINESSMAG. How does the African Legal Network manage to integrate the specificities of the legal frameworks of 54 African countries?

One cannot eat everything. We focus on the key economies that attract the majority of investment on the continent. The ALN also ensures that its members in each country are the top legal firms on the basis of integrity and in terms of quality and efficiency.

In this way, we make certain that investors wishing to invest in countries such as Kenya, Tanzania or Rwanda understand the legal, and more importantly, the cultural and socio-economic frameworks of these countries.

BUSINESSMAG. Can you elaborate more on the opportunities for Mauritian legal firms on the African continent and more specifically in Kenya where you are based?

The range of opportunities is potentially unlimited. However, what we are noticing now in places like Kenya is a quickly expanding middle-class. People are moving up the socio-economic ladder along with the growing economy and this is creating all kindsof opportunities for companies; be it in the fast moving consumer goods sector, due to the changing patterns in consumption, or in infrastructure, real estate and power.

I am really thrilled to see that Mauritius is a leader in using different types of fuel to produce electricity; employing biofuels for example because of your history with sugarcane. This technology can easily be exported to Africa in order to address the power deficit there. I also see really fast property development here, such as the various shopping malls or the Cyber city. It is this kind of development that many African countries need.

To give an idea of the potential the continent represents, Kenya has a population of around 40 million people, compared to Mauritius with around 1 million. The East African Community is in excess of a hundred and twenty million people and we have not yet taken into account West Africa yet. So if Mauritian companies can do what they have done in a country of one million but, in a market of hundreds of millions, you can only imagine the potential for growth.

The other point I will make is the improvement in governance that is occurring on the continent. As governance improves, some of the risks that companies have faced previously arising out of bad governance and corruption are being reduced to much smaller than they used to be ten or twenty years ago.

BUSINESSMAG. How can we improve visibility of the opportunities that the African continents represent for investors?

This is a great question. There is so much more to come from Mauritius’s side and from the other African economies’ side as well.

I would like to be able to fly twice a day from Nairobi to Mauritius and if this is not possible, then at least once a day. Air Mauritius and Kenya Airways should for example, be looking at how they can strategically link Mauritius to the key commercial cities in Africa. This, in my opinion, is a starting point because once people can start to communicate; the potential for expanding trade gets even better.

Dubai’s success as a hub is a perfect example of this. The level of engagement between the private sector and the public sector therefore has to improve. African governments need to put the Mauritian government more on their radar and in the same spirit, the investment authorities in Mauritius need to be more aware of the opportunities in Africa.

The level of investment in Mozambique in order to exploit the oil and gas industries will be the single largest investment on the African continent over the next ten years – we are talking about tens, even hundreds of billions of dollars.

The question we should be answering is how much of that investment will be structured through Mauritius? How much of that investment will Mauritian banks be participating in? This can only be possible through the process of engagement and communication.

BUSINESSMAG. Africa is also regarded as being high on corruption levels. How can we achieve more transparency on the continent?

There is no easy answer because transparency is an ongoing process. Fundamentally, education is the answer to this question since as people in a country become more educated, they demand more from their leaders and they don’t re-elect leaders who don’t perform.

BUSINESSMAG. Looking ahead how do you see the future of corporate law and what will be the new role that it will play? Arbitration, for example, was not very popular years ago but is now the talk of the town.

If you accept that globalisation is here to stay, then it is accepting that multinationals and cross-border trade is here to stay. For us, as taxpayers and people involved in the business world, our objective is to try and make governments as relevant as possible and to see governments as a service provider in order to facilitate trade and growth and opportunity.

The reason so much funding is routed through Mauritius is because of the quality of the corporate law and the enforceability of contracts here. The introduction of financial instruments which will open up to more liquidity and trade and the enforceability of corporate law is at the heart of raising and attracting the new capital that Africa needs for its development.