Exploring the Legal and Business Landscape in Africa Amid Upcoming Elections

an African male employee and a Colombian female employee discussing work matters

By Girish Prayag, Manager of Legal and Compliance – Africa, GoGlobal

With over a dozen countries across Africa gearing up for electoral showdowns this year, the excitement is palpable – and so is the nervous energy. From the sun-kissed shores of Mauritius to the vibrant metropolis of Accra, the anticipation is electric as citizens prepare to cast their votes.

Elections stand as pivotal moments in any nation’s political journey, with outcomes holding immense power to shape economic and societal progress for years ahead. Across the diverse continent of Africa, the upcoming elections may impact not just the political climate but also the business environment.

A change in leadership can spark reforms aimed at enhancing transparency, fostering economic growth and promoting social development. However, it may also introduce a period of instability as the new leadership establishes footing.

Understanding how the elections may impact legal frameworks and business operations is crucial for existing companies and those looking to penetrate the African market. In this blog post, we explore how various cross-border HR solutions can continue to support business expansion across Africa in these times of change.

Negative impact of elections

Uncertainty in policy change deters foreign investors. This can lead to capital flight and decreased Foreign Direct Investment (FDI), undermining confidence and delaying investment commitments.

Governmental changes may tighten visa regulations and impede hiring skilled talent after an election, raising administrative burdens and costs. This particularly affects businesses reliant on international expertise.

The new administration’s approach to trade and commerce may also prompt currency fluctuations, complicating planning and budgeting. This can affect import and export costs, as well as profitability. Contract enforcement and the rule of law may be disrupted, posing challenges in dispute resolution. This can also raise concerns about contract sanctity and intellectual property rights protection.

Positive impact of elections

Despite the challenges posed by leadership changes, elections present opportunities for positive transformation.

Newly elected leaders may pledge reform and progress, driving legislative changes to address societal needs and foster inclusive growth. Their administration may enhance transparency and accountability, boosting investor confidence and attracting foreign investment.

Governments prioritizing economic growth tend to focus on long-term infrastructure projects and initiatives to create jobs. They may also aim to build a vibrant business climate to position their country as an expanding commercial hub.

Pro-business reforms, streamlined regulations and incentives for job creation encourage entrepreneurship and foster economic development. Such changes can open up new market opportunities, with lower corporate taxes and incentives luring foreign investment.

In addition, leaders committed to human rights may enact laws promoting equality and safeguarding vulnerable populations. At the same time, new measures facilitating talent mobility and promoting a diverse workforce can further contribute to innovation and economic growth. 

Gaining stability, support and expertise

Uncertainty prevails regarding leadership changes in Africa, impacting investment decisions, market strategies and operational planning. Various cross-border HR solutions can help international companies minimize risk exposure and make financially sound decisions:

  • Compliance and Risk Management: A qualified cross-border HR solution provider can ensure businesses adhere to local labor laws, regulations and tax requirements, reducing the risks associated with non-compliance. By staying updated on regulatory changes, they can guide businesses on how to minimize operational risks.
  • Agility in Hiring: Flexible talent engagement solutions – such as an Employer of Record, Agent of Record or global recruitment – can help a company adapt to changing economic conditions. Whether scaling up or downsizing, these solutions provide the agility to respond to evolving circumstances
  • Recruitment and Talent Acquisition: Some HR solution providers can assist in identifying, attracting and onboarding top talent in foreign markets. Leveraging their networks and local expertise, they help businesses access the skills needed to support growth objectives and navigate market uncertainties.
  • HR Processing Support: An HR solution provider can manage key processes, including employee onboarding, contract management and performance management. They assist in managing workforces effectively, offering guidance on employee relations and compliance procedures.

Beyond the elections

Despite the upcoming elections, there is no reason to hold back expanding into the African continent as its growth opportunities are undeniable. The right HR solution provider can offer international businesses critical expertise during this time of change.

With trusted advisory, companies gain the flexibility to adapt to Africa’s evolving political and regulatory landscape.

Check out our ‘Guide to Hiring and Firing: Building a Resilient Workforce in Africa’ and contact us to discover how GoGlobal can help you expand and hire with confidence in this dynamic continent.