OHADA (Organization for the Harmonization of Business Law in Africa)
An organization of seventeen African states, created by the 1993 Treaty of Port Louis, that unifies their business law through uniform acts and a shared supreme court.
OHADA (Organization for the Harmonization of Business Law in Africa) unifies the business law of seventeen African states through uniform acts and a shared supreme court. On October 17, 1993, in Port Louis, heads of state from West and Central Africa signed the Treaty on the Harmonization of Business Law in Africa; it was revised in Quebec on October 17, 2008, and the organization it created now has seventeen member states, from Senegal to the Democratic Republic of the Congo, which joined in 2012. OHADA is an organization of legal integration. It issues no currency and sets no customs tariff: its tool is the uniform act, adopted by its Council of Ministers, which replaces whole sections of national codes, and it gives final say on the interpretation of those texts to the Common Court of Justice and Arbitration in Abidjan. The Permanent Secretariat sits in Yaoundé, the regional school for judges, ERSUMA, in Porto-Novo. For an underwriter, the benefit shows up file by file. A security interest over inventory in Douala, the bankruptcy of a distributor in Abidjan, the powers of the manager of a limited company in Dakar all fall under the same texts and the same kind of register, the Trade and Personal Property Credit Register (RCCM). A credit or political risk team assessing a risk in Côte d'Ivoire therefore reads the same law as in Gabon, which narrows the uncertainty over the validity of a guarantee and the ranking of a creditor. The caveat comes from the ground: the law is shared, the courts are not. Enforcement times and the quality of court registries remain national, and that is where most of the denial-of-justice risk sits. OHADA does not deal with foreign exchange or currency, which belong to WAEMU (West African Economic and Monetary Union) and CEMAC (Central African Economic and Monetary Community), nor with insurance, governed by the CIMA (Inter-African Conference on Insurance Markets) Code. Nor does it prevent acts of state: a government can still expropriate or block a transfer, and recourse then runs through an investment treaty or ICSID (International Centre for Settlement of Investment Disputes).
Textbook case: a credit insurer covers a European bank financing a cocoa trader in Abidjan, secured by a pledge over inventory. The underwriter has the pledge's registration with the RCCM (Trade and Personal Property Credit Register) checked, because the uniform act on security interests makes it the condition for enforceability against third parties, and the same check would apply to a warehouse in Cameroon.
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