Prospects and Pitfalls of BITs, and the Quest for a Multilateral Framework in Africa

Bilateral Investment Treaties (BITs) are the main regulatory frameworks for Foreign Direct Investment (FDI) in Africa. Their effectiveness has been questioned because they seem to overcompensate and empower foreign investors to effectively override legitimate state expectations and concerns. This paper demonstrates that the normative underpinnings of most BITs appear unsuitable for the promotion of modern sustainable investment and development in Africa. The paper argues that the divergent states’ interests and other complexities surrounding the security of investment are better resolved via a regional multilateral platform where states can negotiate around these concerns. AfCFTA has offered African states the opportunity to produce such a modern regional multilateral (plurilateral) investment framework that strikes an appropriate balance between the protection of states’ interests, investment security, and sustainability considerations. Besides, the establishment of one of the biggest regional markets with a consolidated and less fragmented investment framework could provide the ‘quantum leap’ for reordering the existing power asymmetry in the international investment regime in Africa.