April 2024 – The Pan-African Investment Code (PIC), adopted in 2016 under the auspices of the African Union, signifies a substantial advancement in the regulation of foreign investment across the African continent. This ambitious text aims to address the shortcomings of previous bilateral investment treaties (BITs), which have often been criticised for being unbalanced in favour of investors to the detriment of state interests and sustainable development objectives.
The IPC introduces a precise and restrictive definition of the concept of investment (articles 3 and 4). This definition makes legal protection conditional on tangible and sustainable economic impact, explicitly excluding speculative investments without real benefit for local economies. This approach enables the targeting of beneficial investments while mitigating the risks associated with purely financial operations.
Another major contribution of the IPR is the clear recognition of the sovereign right of States to regulate investments for legitimate public policy reasons (article 6). This right encompasses sensitive areas such as public health, national security, environmental preservation and financial stability, thus providing States with increased protection against possible abusive recourse by investors.
Conversely, the CPI imposes specific obligations on investors, particularly in terms of financial transparency, strict compliance with international environmental and social standards, and the active fight against corruption (article 8). These obligations aim to make investors more accountable and encourage the adoption of practices in line with international standards of responsible governance.
The CPI also modifies the traditional approach to dispute resolution (article 18), now favouring local and regional mechanisms as well as amicable mediation. This approach is intended to strengthen African judicial autonomy and limit the costs and procedural constraints associated with systematic private international arbitration.
Beyond its normative content, the CPI also reflects a broader institutional ambition: that of building a coherent pan-African governance of investment, where states can better coordinate their economic policies. It reflects a paradigm shift from a logic of liberalisation to a logic of strategic regulation for development.
Several regional organisations, including ECOWAS and SADC, have drawn inspiration from it to reform their own regulatory frameworks. For instance, the reforms of the Investment Code of Senegal and Côte d’Ivoire partially reflect the standards defined in the ICP, illustrating its growing influence on African economic law.
Despite its non-binding nature, the CPI is emerging as a foundational reference point for numerous continental initiatives, notably the AfCFTA Investment Protocol. It continues to guide thinking on the relationship between legal certainty, the responsibility of economic actors and the sovereignty of African public policies.
