Abstract

This chapter examines the likely impact of the Pan-African Investment Code (PAIC) on extractive industries and capital inflows in Africa. The chapter begins by looking at the profile of mining investments in Africa before embarking on their evaluation through an economic efficiency lens. The PAIC was drafted by a technical committee of the African Union in 2016, and some of its provisions may increase transaction costs for foreign investors. This chapter argues that the shifting of a large part of the burden of sustainable development from host countries to investors will jeopardize the very development that host states are so eagerly striving to spur. However, capital flows to resource-rich Africa will not dry up, because of the strategic importance of the minerals that the continent is so well endowed with. Still, the consequences of executing the investment policy enshrined in the PAIC seems uncertain. Therefore, this chapter seeks to interrogate the structure of PAIC as a model foreign investment law. In so doing, the chapter contrasts the continent’s traditional foreign investment policies with the investment-skeptic stance adopted, since 2002, by some nations in the developing world, such as the Bolivarian states, Namibia, and South Africa.