CLA News / Africa Legal Forum Session 9A: Secured Transactions in Africa: From Collateral to Commercial Confidence
Modern laws are not enough. Lenders need confidence that security can be enforced. That was the central message of Session 9A at the Africa Legal Forum, which examined the practical realities of secured transactions across Africa – from movable collateral and enforcement delays to investor confidence and risk allocation.
Chaired by Maggie Baingana-Kali, the session featured Dianah Njeri Mureithi, Partner at Sterling Law Kenya and Isaac Bizumuremyi, Managing Partner at Lex Chambers.
From legislation to lending
Dianah Njeri Mureithi challenged whether modern movable collateral laws and electronic registries are genuinely changing lending practices. Despite progress in jurisdictions including Rwanda and Ghana, do lenders trust movable assets as security, or do they still prefer land?
The discussion highlighted persistent challenges around registration, perfection and the valuation of assets such as receivables and intellectual property. The message: legal reform must translate into practical confidence.
Enforcement is where security is tested
Isaac Bizumuremyi examined the journey from borrower default to creditor recovery. Statutory notices, injunctions, valuations and court proceedings can all delay enforcement, leaving lenders waiting to turn security into cash.
The panel explored the delicate balance between protecting borrowers’ rights and ensuring creditors have effective remedies, including the impact of insolvency proceedings on secured creditors. Procedural compliance, it was clear, is critical.
What makes African security bankable?
Patrick Didier Nukuri considered how international lenders and development finance institutions assess security across African jurisdictions. Their confidence depends on more than legislation: effective courts, reliable registries and a demonstrable track record of enforcement all matter.
Comparisons between OHADA and common-law systems added a cross-jurisdictional perspective, while discussion turned to alternative risk-management structures, including guarantees, offshore accounts, security agents and international arbitration.
Closing the confidence gap
The panel also examined how enforcement uncertainty influences transaction documents, often prompting lenders to seek multiple layers of security – from land and debentures to personal guarantees and cash collateral. But who ultimately bears the cost of that additional protection?
The session closed with a challenge to identify the reforms that would make the greatest difference, whether in legislation, court processes or collateral registries.
The takeaway was clear: Africa needs more than modern secured transactions laws. It needs systems that make security enforceable, predictable and trusted. That confidence is fundamental to unlocking investment, expanding access to finance and supporting sustainable economic growth.
