The phenomenal spread of privatization initiatives in sub-Saharan Africa since the 1980s created the impression that public infrastructure divestiture is a shortcut to economic growth and development. This has proven not to be the case due to the lack of enabling institutional prerequisites. It appears the case that while much faith is put in the potency of the free market, little thought is generally given to the institutions required for markets to perform their function. Accordingly, this paper discusses some of the embedded institutional failures that have made free-market development policies a mirage in many sub-Saharan African countries. Principally among these are corruption and government failures. To check these, it makes more sense to re-direct attention to the sources of failure rather than the free market ideological thrust.

Heavy debt burdens and corruption have not only had a debilitating effect on development but also undermined efforts at economic recovery and market‐enhancing initiatives in many African countries. Africa is the world’s most aid‐dependent and indebted region of the world. Much of the resources that could have been ploughed into investments are used to service debts and/or misappropriated by corrupt leaders – with all the attendant negative perceptions of Africa’s business environment. Therefore, in developing a “business plan” for Africa’s economic renascence, corruption and debt management and mismanagement (by both lenders and borrowers) need to be put squarely on the agenda. Against the backdrop of the currency of opinion for debt relief, this paper highlights the institutional processes that underlie the misallocation and misappropriation of original receipts, policy dynamism of their management and the overall market impact.

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One of the overarching goals of many African countries since the past two decades has been the rapid move towards integration with the global economy. This is evident through far‐reaching macroeconomic and political reforms now taking place in these countries. However, despite the aggressive lurch towards market‐driven transformations, results on the ground have been less than satisfactory – arising largely from a myriad of implementation failures. It appears that while much emphasis is put on the potency of a free market‐driven transition, there is little understanding of how particular institutional arrangements shape and determine the success (or failure) of market/economic reforms. This paper adopts an institutional approach to analyse the transition challenges facing Africa. It concludes that countries in Africa are facing tumultuous problems in achieving sustainable growth, largely because the market‐driven transition programmes are rooted in economic orthodoxy that is anti‐institutional and, therefore, ill‐equipped to deliver desired results. Paradoxically, this appears to be the case with the UN Millennium Development Goals. Improved results in achieving the goals and, indeed, the broader market reform efforts are possible if planners and policy makers are able to root their planning processes within the contextually embedded institutional environment.

Purpose: This paper discusses some of the contending issues in the legal environment of business in Sub‐Saharan Africa (SSA) as they relate to Foreign Direct Investment (FDI). Given that ‘fear of national laws’ has been consistently cited as a major factor inhibiting foreign investments in the region, this paper argues that ‘arbitration/alternative dispute resolution’ (A/ADR) offers a strategically complementary adjudicative system to mitigate this adverse perception. Design/methodology/approach: Based on a synthesis of the literature, the paper, first, outlines the emerging A/ADR‐driven trends in global business. From this premise, it focuses the market transition challenges facing SSA and identifies the disparate regional legal systems, with their backgrounds and origins in common, civil and Islamic laws, as primary issues of concern. Findings: Apart from lacking uniformity in application, the legal strictures have made the resolution of legal and contractual obligations much more cumbersome and expensive, thereby discouraging significant FDI flow to SSA. Research limitations/implications: The need to secure the confidence of investors by reforming the law and the adjudication process appears compelling. However, the socio‐cultural considerations that should naturally embed effective arbitral protocols are not addressed in this paper. Originality/value: A/ADR mechanism is not presently a key feature in the legal environment of business in SSA. However, it is likely to prove a more functional adjudication process than the procedural formalities of litigation. By its characterization, this approach promotes the creative implementation of a “home‐grown” frame work for commercial dispute resolution, thus avoiding the drudgeries of litigation but at the same time providing the needed catalysts for enabling FDI.