Legal tool for increasing investment flows within the COMESA
The twelfth Summit of COMESA Authority of Heads of State and Government, held in Nairobi, Kenya, on 22nd and 23rd May 2007, has adopted the Investment Agreement for the COMESA Common Investment Area (CCIA).
The CCIA Agreement is a precious investment tool whereby the COMESA Secretariat contemplates to create a stable region and good investment environment, promote cross border investments and protect investment, and thus enhance COMESA’s attractiveness and competitiveness within COMESA Region, as a destination for Foreign Direct Investment (FDI), and in which domestic investments are encouraged.
Following are key pillars contained in the COMESA Investment Agreement for the CCIA:
1. The quality of COMESA Investor which enables investors to get benefits from the CCIA Investment Agreement, inter alias the national treatment, the Most Favored National Treatment and the investment settlement disputes mechanism;
2. The National treatment that shall be granted to COMESA investors by 2010, which allows them to be treated in the same way as a domestic investor;
3. The protection of investors and their investments through the guarantee against expropriation and nationalization and other measures with similar effects;
4. The settlement of investment disputes through negotiations and arbitration mechanism;
5. The programs intended to improve COMESA Member States’ business climate such as by:
(i) reducing and eliminating regulations which impede investment flows, inter alias in:
- starting-up business and dealing with licensing procedures,
- Expanding the number of bilateral Avoidance of Double Taxation Agreement among COMESA Member States;
(ii) developing capacity building program for COMESA Investment Promotion Agencies;
(iii) increasing transparency of COMESA Member States’ investment rules, regulations, policies and procedure thereby, the investor confidence;
(iv) promoting public-private sectors linkages;
(v) promoting joint organization of investment promotion activities;
(vi) opening up investment regimes by eliminating investment barriers.
(vii) harmonizing all company registration procedures, which would allow for streamlined company registration and recognition as a COMESA company, and operate freely within the COMESA region
6. The Most Favored National Treatment which request COMESA Member State to accord to COMESA investors, treatment no less favorable than that it accords to investors of third party State with respect to all measures affecting investment;
7. The recognition to COMESA Member State the right to adopt or maintain some restrictions on investment such as the emergency safeguard measures where a Member State suffers or is threatened with serious economic distress, or has serious balance of payments difficulties in relation with investments;