AFRICA BUSINESS INSIDER: Unlocking New Horizons: ADG legal and advisor Peter Gray’s growing investments shaping the future of Africa
The Middle East, particularly the Gulf Cooperation Council (GCC) countries, have fostered robust relationships with African countries, with a particular focus on vital industries such as agriculture, healthcare, energy, and infrastructure. Investment dynamics between the Gulf and Africa are showing promise.
The UAE has emerged as one of the largest investors in Africa, channeling billions of dollars into development projects that enhance the continent’s infrastructure. Notably, a Dubai Chamber of Commerce report revealed that the Gulf nation accounted for 88 percent of the GCC’s investments in sub-Saharan Africa.
Given Africa’s massive market potential, investment from GCC countries will continue to increase. Since the pandemic, the Gulf has quickly rebounded and experienced a 6.9 percent increase in GDP in 2022. This growth trajectory is anticipated to continue through 2023, driven by the recovery of the oil industry and commodities market.
Considering the United Arab Emirates’ ongoing economic growth rate, it makes strategic business sense for Gulf investors, or those using the Gulf as an investment hub, to turn to Africa to grow their portfolios. Governments, multinationals, and private corporations recognise the significance of investing in Africa as part of their income diversification strategies.
The world’s top 300 investment firms have only invested 3 percent of their total assets, which exceed $50 trillion, in Africa, highlighting the need for more facilitators to help capitalise on this untapped opportunity.
With its extensive footprint covering African countries, ADG Legal, a UAE-based law firm that has established a strong presence in Africa, has seized this opportunity. With headquarters in Dubai and offices in Abu Dhabi, Cairo and Alexandria, Egypt, the firm is primed to expand its African presence in several sectors, including infrastructure.
Established following the 2017 merger of Mohammed Al Dahbashi Advocates, Peter Gray and Kingsgrove Partners, the firm is proud of its experienced and diverse team (including Emirati, British, Egyptian, Australian, Sudanese, Kazakhstan and Zambian members). The firm is equipped to handle complex cases and has a proven track record of providing clients with responsive, clear, and commercially sound advice. ADG Legal prides itself on promoting Emirati talent and cultivating relationships with high-calibre lawyers and professionals worldwide.
To further understand how ADG Legal has developed a stronghold in African markets, we examine how the firm has established a command over various legal and investment services.
In terms of dispute resolution, ADG Legal has a strong focus, and a dedicated team committed to efficiently resolving regional and international disputes. The firm provides strategic advice and consultancy services to various clients, including governments. The firm’s advocates have full rights of audience in all UAE courts, and they have established a network of leading firms and individuals in multiple jurisdictions, enabling seamless dispute resolution services for clients across borders. The team has an extensive understanding of the regulatory environment and regulatory bodies in the UAE, the Middle East, and Africa.
A robust and favourable legal framework is massively attractive for investment and development. ADG Legal – with other law firms – assists in drafting and reviewing legislation, regulations, and infrastructure-related policies. This framework creates an environment that promotes investment, public-private partnerships (PPPs), and project financing, thereby attracting stakeholders and facilitating smooth project implementation.
ADG legal says contract negotiation is another key area to consider. Infrastructure projects involve complex contracts between multiple parties, and law firms help negotiate and draft agreements that protect the interests of investors, lenders, contractors, and the government. By ensuring fair and transparent contracts, ADG Legal says it mitigates the risks and disputes that may arise during project execution. Too often, one party (and sometimes both) either do without legal advice, or go to a firm with insufficient expertise.
To further elaborate, due diligence is crucial to assess an infrastructure projects’ legal, regulatory, environmental, and social risks. Law firms such as ADG Legal assist in conducting comprehensive due diligence, including environmental and social impact assessments. They ensure compliance with local laws, international standards, and best practices, thus reducing potential risks and ensuring project sustainability.
Financing is a significant aspect of infrastructure projects, and law firms play a critical role in advising on financing options. Advisor Peter Gray explains, “We help structure financing agreements, negotiate terms with lenders or investors, and ensure compliance with financial regulations. By providing guidance on bank loans, bonds, and public-private partnerships, law firms such as ours assist in securing the necessary funding for infrastructure development. ”He adds, “Beyond financing, an essential caveat in infrastructure projects is risk mitigation, and firms such as ours help identify and address legal, regulatory, political, and reputational risks. For example, we provide guidance on land acquisition, permits, licenses, and compliance matters, minimising potential obstacles. By addressing these risks proactively, firms such as ours ensure smoother project execution and reduce the likelihood of delays or disputes.”
Other important facets include sustainability and social impact, which are increasingly important considerations in infrastructure development. The firm advises on environmental and social impact assessments, promotes adherence to environmental regulations, and supports community engagement initiatives. They contribute to infrastructure’s responsible and sustainable growth by integrating environmental and social considerations into project planning and execution.
Returning to the subject of Africa, law firms with a local presence in African countries offer valuable insights and connections. They can navigate the legal and regulatory landscape, engage with local communities, and establish relationships with government entities and stakeholders. This local engagement enhances project implementation and fosters community support, contributing to infrastructure projects’ overall success and sustainability.
ADG Legal’s expansion into the African market reflects, first, the growing appeal of the continent to international companies and, secondly, the firm’s ambition to evolve.
Africa’s growth is indisputable: the International Monetary Fund statistics confirm that the continent has the most prominent growth rate globally and boasts the highest number of countries growing at over 5% annually.
Africa’s remarkable growth prospects, young population, attractive business environment, and privileged relationship with Europe have made it an enticing investment destination. European investors across various sectors have been establishing their presence in Africa, leading to an increased demand for sophisticated legal services. The privileged relationship with Europe derives from the geographical proximity and the linguistic and cultural affinities between the two continents – not to mention the fallout from colonialism. On top of that, Europe, the Middle East, and Africa have deeply rooted governmental ties, a crucial factor: the EU and the UK are responsible for over half of all official development assistance to Africa, making it the continent’s top partner in that field. Given this favourable business environment, numerous European investors across multiple sectors have opened plants, set up joint ventures, acquired companies, and started distributing their products and services in Africa in the last few decades.
The growth in business ties with Africa has led to sophisticated legal needs for European, Middle Eastern and Asian investors. Several countries around the world, including the United Arab Emirates, the UK, and China, continue to pour copious amounts of funding into African countries – particularly into those committed to introducing reforms and institutional capacity to spur international relations and investments – investors’ legal needs are constantly changing.
Historically, law firms have taken different approaches to entering specific regions within Africa. French law firms, for example, have chosen to follow their clients to French-speaking Africa, particularly the north-western part of the continent. This strategy leverages shared cultural affinity and language, facilitating smoother operations and better client communication. Similarly, Portuguese firms have focused on Lusophone Africa, including countries like Angola and Mozambique in sub-Saharan Africa. These firms have effectively established a presence in these regions by capitalising on linguistic similarities and historical ties. At the same time, African governments have started to seek out top-flight legal advisors to support their growth, which has only further encouraged international law firms to invest in and commit to the continent.
Today, law firms have two main options when entering African markets: going alone or partnering with local firms. In light of these developments, firms like ADG Legal take a different approach, not limiting their reach based on language or cultural affinity. ADG Legal recognises the vast potential of the entire African continent and has established a presence across Africa with Mertus Investments. Their strategy is centred on leading and facilitating large projects in the infrastructure sector and building partnerships with local companies that share similar values and visions. This approach allows them to bring added value to local communities and maximise benefits for all stakeholders.
A bespoke strategy is crucial for successful market entry in Africa. As Peter Gray, co-founder at ADG Legal said, “There is no doubt that a variety of reasons make Africa attractive to UAE law firms looking to expand. But to successfully seize these opportunities, it is crucial to understand how best to shape your strategy. When approaching a new country in Africa, the primary task should be to get to grips with the local regulatory framework to ensure that any steps into the new market fully comply with local laws.”
Each country in Africa has its own legal landscape, business practices, and cultural nuances. By conducting thorough research and engaging local experts, law firms can develop tailored approaches that align with the specific requirements of each market.
ADG Legal’s partnership approach is driven by a desire to bring added value to local communities and foster long-lasting relationships. It understands the importance of tailored strategies for each market and emphasises compliance with local regulations. The firm aims to become strategic hubs that assist businesses in seizing, supporting, and safeguarding their investments in Africa. By collaborating with local companies and partner law firms, ADG Legal promotes knowledge sharing, cultural exchange, and mutual growth, adopting a partnership approach that transcends language barriers and covers the entire continent.
By prioritising collaboration and adding value to local communities, advisors like Peter Gray and law firms such as ADG Legal contribute to Africa’s development and play a pivotal role in shaping its future, benefiting clients who want to jump into the burgeoning African market.