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DealMakers AFRICA Q2 2025 issue
THORTS
Financing East Africa’s junior miners: bridging the capital gap
By Noreen Kidunduhu | Noreen & Co
How AI is revolutionising the M&A deal cycle
By Njeri Wagacha and Wambui Kimamo | Cliffe Dekker Hofmeyr
By Thandiwe Nhlapho | PSG Capital
Employment contracts in corporate mergers under Cameroonian law
By Joelle Zeukeng Azemkeu
Virtual Assets Regulation in Southern Africa: a regional comparative analysis
By Lerato Lamola, Tebogo Mapitse, Nawala Kamati, Joseph Waring, Nellie Tiyago and Oldivanda Bacar
CONTENTS
FROM THE EDITOR'S DESK
The total value of M&A deals captured for the continent during H1 2025 (excluding South Africa) was a mere US$4,66 billion, down 16% year-on-year, and 61% off the levels seen in H1 2022.
Deal volumes echoed this decline – down 21% on 2024 deal flow, and 68% off levels registered in 2022 (pg 4). Two deals in the energy sector topped the deal table by value for the period at $2,16 billion – almost half the total deal value for H1 (pg 6).
Analysis of private equity investment in Africa over the past four years mirrors this steady decline, amid challenges brought about by a mix of global macro pressures, regional risks, and shifts in investor strategy.
While not unique to Africa, rising global interest rates, a strong US dollar and geopolitical uncertainty have seen international investors retreat to safer, higher-yielding markets. For Africa, where private equity funds remain heavily reliant on offshore capital, this has translated into weaker fundraising and a more selective deployment of capital.
Currency volatility, energy insecurity, and political uncertainty in key economies such as Nigeria have added to the caution. African institutional capital remains underdeveloped, with African GPs heavily reliant of foreign backers. Subdued IPO markets, together with limited trade buyer activity, continue to constrain exit opportunities – a critical factor
in investor appetite.
Added to this has been the correction in technology and fintech valuations; these sectors were central to the surge in 2022. The shift in global sentiment and a redirecting of attention to more defensive opportunities in healthcare, agriculture, food value chains and logistics has cooled valuations and deal appetite, reflected in the lower deal volume.
However, on a positive note, the longterm story remains intact, and the cycle will turn. Africa’s demographic dividend,
rapid urbanisation, and the pressing need for investment in energy transition, infrastructure and healthcare continue to underpin opportunity. All that is needed is patient capital, and Africa’s fundamentals will ensure it remains firmly on the radar, with the current environment presenting entry points at more attractive valuations.
This year’s DealMakers AFRICA Women of 2025, released recently and carried in this publication, continues to grow. The unique and inspiring stories are rich with lessons: from overcoming doubt to navigating complex deals, from building credibility to mentoring others. The uplifting of women in the workplace isn’t just equity, it’s a catalyst for economic growth, innovation and lasting change across the continent. My grateful thanks go the firms in this feature for their continued support and participation.
THORTS
Financing East Africa’s junior miners: bridging the capital gap
Noreen Kidunduhu
For all the geological potential East Africa offers, the region’s junior miners remain caught in a familiar bind: promising assets, ambitious growth plans, but a stubborn lack of risk capital to bring projects to scale. Over the past three years, a handful of juniors with projects in Kenya, Tanzania and Ethiopia have tested the market, often relying on small equity placings, shareholder loans or piecemeal project-level deals to stay afloat. The result is a funding landscape that is still shallow and episodic, limiting the pace and scale of development.
Micro-raises and shareholder dependence
For most East African juniors, listings or dual listings on exchanges or their sub-markets is the most accessible route to capital. These are typically accompanied by small equity placements, often heavily reliant on existing shareholder support.
Noreen Kidunduhu
East Africa-focused Caracal Gold plc, for example, has leaned on this approach. Since 2023, the company has completed several modest equity raises, typically under £1 million each (RNS, April 2024). Proceeds have funded resource expansion and, more recently, restart plans following the suspension of production in early 2024. Yet Caracal’s market capitalisation hovers between £3-5 million (LSEG Market Data, 2025), underscoring the difficulty of scaling through micro-capital injections.
In Tanzania, Katoro Gold plc, an early-stage explorer in the Lake Victoria Goldfields, has walked a similar path. Its most recent £350,000 placing in Q2 2025 (AIM News, May 2025) follows a string of micro-placements stretching back to 2023, each just enough to fund incremental exploration and corporate overheads.
While these equity raises provide essential lifelines, they limit project advancement and keep most juniors in a cycle of dilution and underfunding.
Consolidation as an exit
By contrast, larger, cash-generative African producers are taking a different approach to East African gold. Perseus Mining’s A$260 million acquisition of OreCorp in 2023 gave it control of the 3Moz Nyanzaga project in Tanzania, now one of the most advanced gold developments in the region. Perseus gained a pipeline asset it could fund directly from internal cash reserves (ASX announcements, September 2023). Subsequent early works at Nyanzaga have been financed entirely from operating cashflow, avoiding external debt or equity dilution (Q3 FY25 Results, June 2025).
This is an advantage few juniors can hope to match. As such, acquisitions are another viable option for undercapitalised juniors with quality assets.
Project-level funding
Some juniors in the region are also exploring project-level financing structures tied to offtake or prepayment arrangements. For instance, Katoro Gold has publicly disclosed ongoing discussions with potential offtakers to fund its next phase of resource drilling (RNS, 12 June 2025). Similarly, Caracal Gold is evaluating offtake-backed financing structures to support Kilimapesa’s restart plans (RNS, 28 March 2025).
While East Africa has yet to see a large-scale streaming or royalty deal for a junior mining project, the concept is gaining traction in boardrooms as successful stories emerge from other parts of the continent, like the Pan African Resources’ $20 million gold prepayment facility for its Mintails project in South Africa (FY24 Results, August 2024) that has shown how offtake-linked structures can bridge the pre-production funding gap.
Hybrid approaches and creative structuring
Ultimately, juniors will need to employ innovative and hybridised models to bridge funding gaps. Shanta Gold, an East African producer, offers a useful case study. In 2023, the company raised approximately US$20 million via a convertible loan note to advance drilling and feasibility work across its portfolio, including the West Kenya project (RNS, June 2023). Shanta continues to leverage its DSE listing and free cashflows from its New Luika and Singida operations for funding flexibility (Q2 Operational Update, July 2025). While Shanta benefits from production scale that juniors lack, its use of blended capital structures points to the kind of creative solutions others may need to pursue.
Another example is East Africa Metals, which is pursuing a project-generator model. Instead of focusing on fully developing a single asset, the company has built a portfolio across Ethiopia and Tanzania, advancing projects like Harvest and Adyabo. This model involves identifying and acquiring promising mineral properties to initially explore, and then optioning or selling these projects to partners. This approach reduces balance sheet strain while keeping the project pipeline moving.
DFIs may also play a bigger role in bridging the capital gap. Institutions like the African Finance Corporation and Afreximbank have shown increasing appetite for resource-sector infrastructure and development-stage funding, albeit more commonly for larger-scale projects. Their evolving mandates may open new pathways for East Africa’s juniors, particularly as projects advance toward feasibility stage.
Crossing the chasm
East Africa sits atop world-class gold geology and global demand for critical minerals and precious metals remains strong. Yet without access to deeper pools of risk-tolerant capital, be it private, institutional or strategic, many of the region’s juniors risk staying stuck in exploration limbo.
Bridging East Africa’s junior mining funding gap will require more than incremental raises and patchwork financing. It will require a structural rethink: greater use of project-level and hybrid capital, stronger engagement with strategic partners, and a more active courting of global capital willing to invest in the region.
Kidunduhu is the Founding Principal | Noreen & Co and is an ILFA Alumni
How AI is revolutionising the M&A deal cycle
THORTS
Njeri Wagacha and Wambui Kimamo
Artificial Intelligence (AI) is rapidly transforming the landscape of mergers and acquisitions (M&A). What used to be a slow, labour-intensive process involving countless hours of manual review is now becoming faster, more precise, and data-driven thanks to AI-powered tools. From deal sourcing through due diligence, negotiation and post-merger integration, companies are leveraging AI to gain competitive advantages and unlock greater value.
DEAL SOURCING AND TARGET IDENTIFICATION
One of AI’s most valuable contributions to the M&A process is its ability to identify and evaluate potential acquisition targets with speed and precision. According to McKinsey & Company, AI algorithms can analyse vast and diverse datasets, including financial records, transaction histories, news reports and social media content to highlight targets that align with strategic and financial goals. Beyond target identification, AI supports predictive analytics that allow legal and investment teams to forecast key performance indicators, revenue trends, ROI potential and market fluctuations, providing dealmakers with an opportunity to compare options and make data-driven choices.
This reduces the risk of poor fit, and enhances strategic decision-making at the earliest stages of a deal. Additionally, AI platforms can assess softer factors such as corporate culture, customer overlap, and operational compatibility, helping organisations to anticipate integration challenges and prioritise the most promising opportunities.
DUE DILIGENCE AND TRANSACTION DOCUMENTS WITH AI AUTOMATION
Due diligence is often the most time-consuming and resource-intensive stage of an M&A transaction. Traditionally, legal and advisory teams manually review vast volumes of legal, financial and regulatory documents, a process that
Njeri Wagacha
Wambui Kimamo
can take weeks or months. The sheer complexity and volume of data can lead to delays, increased costs and missed red flags, with many high-profile M&A failures stemming from inadequate or rushed due diligence. AI technologies significantly accelerate document analysis by automating the extraction of relevant data from diverse sources, reducing the burden on human analysts and ensuring a more comprehensive and accurate analysis. Whether it’s spotting inconsistencies in contractual clauses, identifying compliance gaps, or highlighting unusual financial metrics, AI empowers deal teams to swiftly conduct deeper and more accurate assessments. As such, AI adoption is quickly becoming essential for private equity firms, legal teams, financial advisors and investment banks seeking a competitive edge in today’s high-stakes deal environment.
AI has emerged as a transformative tool in the preparation and management of transaction documents. According to a recent article by M&A Community, its benefits at this stage include:
i. Reduced manual effort: AI eliminates repetitive and time-consuming tasks such as document review, data extraction and preliminary analysis. This allows deal teams to shift their focus to higher-value activities, including interpreting insights and making strategic decisions.
ii. Accelerated timelines: AI enables rapid generation and review of transaction documents based on the clients needs, significantly reducing the time required to prepare, negotiate and finalise documentation, allowing deal timelines to move forward faster.
iii. Lower cost: automation of document review, drafting and data extraction reduces dependence on large legal or deal teams, lowering the overall transaction costs while minimising the risk of human error. AI also supports early detection of inconsistencies or missing provision in key documents, helping avoid costly oversight or post signing disputes.
SUPPORTING POST-MERGER INTEGRATION FOR SUCCESS
Ansarada has highlighted the use case for AI in post-merger integration to include:
i. Uncovering hidden synergies by analysing customer behaviour, market trends and internal capabilities, revealing new growth opportunities and suggesting innovative product ideas, optimal marketing and operational strategies, and proposing new business models, enabling integration teams to move beyond simply merging operations to driving a sustainable company.
ii. Generative AI can simulate numerous “what if” scenarios during post-merger integration, using historical data and predictive models to evaluate different potential strategies and their potential outcomes to help make informed decisions.
iii. Natural language processing tools can analyse employee communications and feedback to detect shifts in sentiment and flag potential morale issues early, allowing leaders to address concerns before they escalate.
CHALLENGES OF AI IN M&A
Despite its potential, several challenges hinder the adoption of AI in mergers and acquisitions. These include:
i. Data privacy: the deal cycle often involves handling sensitive and proprietary information about the target company. Firms using AI must implement stringent data protection measures, including data anonymisation and full compliance with relevant data protection regulations.
ii. Data inaccuracy: The effectiveness of AI systems is largely dependent on the quality of the data they analyse. When data is incomplete or contains errors, it can result in misleading analyses, which creates significant risks. This is especially relevant in the African context, which is discussed further below.
iii. High implementation costs: Deploying AI technologies often demands substantial financial resources, including investments in advanced technology, supporting infrastructure and specialised talent. These considerable initial expenses can pose significant barriers, particularly for smaller firms seeking to leverage these technologies.
Additionally, cultural and qualitative factors, such as leadership alignment, employee engagement and stakeholder relationships remain difficult for AI to fully evaluate, underscoring the continued importance of human judgment alongside AI insights.
THE AFRICAN CONTEXT
As AI becomes increasingly embedded in the M&A process, Africa faces the unique challenge of AI recolonisation, due to the reliance on foreign-developed AI technologies. Most AI tools used across the continent are created and controlled by entities outside Africa, often trained on non-African data, and developed with limited understanding of local markets. In the M&A context, this creates a significant barrier, as tools that are not trained on African-specific data are less likely to deliver accurate insights. To overcome this, there must be a deliberate effort to develop locally relevant AI capabilities supported by robust, context-specific data infrastructure. This is not simply a technical requirement, but a strategic imperative for unlocking AI’s full potential in identifying suitable acquisition targets, assessing risks accurately, and guiding post-merger integration within Africa’s M&A landscape.
CONCLUSION
As we enter the era of Industry 5.0, marked by closer human-machine collaboration, AI is set to become an essential partner in the M&A process. Rather than replacing professionals, AI tools are designed to amplify human judgment, streamline decision-making, and unlock deeper strategic insights across every stage of a transaction. In leveraging AI in the M&A process, maintaining human oversight is crucial to ensure the validity and accuracy of AI-generated insights. In this early stage of AI adoption, practitioners must take full responsibility for thoroughly reviewing and verifying all analyses and findings produced by AI before finalising any deal. Successful integration will depend on how effectively organisations combine AI’s analytical power with human experience and intuition. Those who adopt this balanced approach will be better positioned to navigate complexity, reduce risk, and create long-term value in an increasingly competitive deal environment.
Wagacha is a Director and Kimamo a Trainee Lawyer | CDH Kenya
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THORTS
Leveraging mergers and acquisitions for strategic growth: unlocking synergies and seizing opportunities
Thandiwe Nhlapho
Companies often face the choice of deciding to grow organically or through mergers and acquisitions (M&A). Although organic growth typically involves less risk, it takes longer; while growing by acquiring or merging businesses enables targeted and faster growth, but entails risk. While different approaches can be utilised for growth, this article focuses on M&A as part of a growth strategy.
M&A can be a powerful strategy for business growth, particularly for a company aiming to gain access to new customers, expand its geographic markets and/or advance its competitive edge. For instance, an acquirer may be looking to obtain a new product line, add more facilities, or gain expertise and intellectual property as part of its growth.
Thandiwe Nhlapho
The example of Disney, through its acquisition of leading production companies like Pixar, Marvel, Lucasfilm and 20th Century Fox, over time, shows that a well-planned and executed M&A strategy can be highly effective in yielding business growth. Notable African examples include MTN Group, which has grown significantly through strategic acquisitions and mergers across Africa and the Middle East, and Shoprite, which has expanded its footprint across Africa through both organic growth and strategic acquisitions, becoming one of the largest grocery retailers on the continent.
A company embarking on M&A must be intentional and prepared, as bringing two businesses together – from conceptualisation and pre-deal engagements to valuation, execution and post-merger integration – is an enormous endeavour. Therefore, several factors, including those discussed below, must be considered for a successful acquisition or merger as a growth strategy.
During the pre-deal due diligence phase, it is crucial for the deal team to comprehend where synergies and integration opportunities exist within the businesses. Furthermore, the related complexities, timelines and costs to implement the transaction need to be understood to enable the business to make informed decisions during the deal approval process.
LEVERAGING SYNERGIES
Synergies are of the utmost importance when utilising M&A to generate growth. M&A, if initiated as part of a planned growth strategy, can result in synergies that offer value creation for both parties. From a cost-cutting perspective, parties could take advantage of overlapping operations or resources by consolidating them. But beyond this, effective strategic synergies can alter the competitive balance of power and create opportunities to change market dynamics in a company’s favour.
Companies can take advantage of revenue synergies, such as cross-selling products or services. In addition, when the products or services of the two companies complement each other, the merged entity can offer more comprehensive solutions to its customers. This was seen in Microsoft’s acquisition of LinkedIn, where the latter’s professional network complemented Microsoft’s suite of productivity tools. A notable African example includes Access Bank’s Acquisition of Diamond Bank in Nigeria, which combined Access Bank’s corporate banking strengths with Diamond Bank’s retail and digital banking capabilities. This acquisition enabled cross-selling of products to a broader, more diverse customer base, and accelerated digital adoption.
Beyond financial metrics, it must be considered how the acquisition aligns with the acquirer’s long-term growth strategy. When performing a valuation of the target, the acquirer needs to factor in synergies without overestimating their impact, while taking into account potential risks. Synergy projections should be based on a detailed understanding of both businesses’ operations. For instance, can the acquirer eliminate redundant functions without impacting service quality? Is there a real opportunity to cross-sell, or are the markets too different?
OPPORTUNITIES FOR GROWTH BY FILLING IN GAPS
When the marketplace changes in response to external factors or regulatory development, it can create a gap in a company’s critical offerings. It may then be a prime opportunity for a company to engage in M&A to address such gaps and remain competitive in the market.
For instance:
• a telecommunications provider might acquire a regional operator with a spectrum licence to fast-track its 5G rollout in key urban hubs;
• a company may react to shifts in consumer preferences. By way of example, an FMCG company may acquire a plant-based food manufacturer in response to an increasing demand for vegan products, while also benefiting from a lower carbon footprint compared to traditional meat-based offerings;
• new environmental regulations may require companies to adopt greener technologies. A company could address this by acquiring a business that owns the necessary technology, to enable it to be compliant; and
• changes in trade policies, such as tariffs or import restrictions, can necessitate strategic acquisitions to localise production.
GO BIG OR GO HOME?
On the contrary, smaller deals are often the sweet spot. It is not always a choice between going big or going home; in fact, smaller deals often have a higher likelihood of success due to several key factors. These deals often succeed because they are strategically focused, involve clear synergies, and are easier to integrate. They might also have reduced financial risk. The financial commitment in smaller deals is generally lower, reducing the overall financial risk for the acquiring company. As part of its growth strategy, a company may engage in small, strategic acquisitions to acquire innovative startups, enhancing its product offerings and remaining competitive without the risk and complexity of larger deals. However, even small-scale transactions are not a “slam dunk” and may involve risk.
THE DOWNSIDE
While M&A may bring significant benefit, it comes with inherent risks and requires careful planning and execution to maximise the chance of success. Despite a solid M&A strategy, many deals fail in their implementation.
History shows that M&A deals can destroy value, instead of creating it. Daimler-Benz’s acquisition of Chrysler was intended to create a transatlantic automotive powerhouse. However, the deal suffered from cultural differences and strategic disagreements, leading to significant financial losses. Daimler eventually sold Chrysler at a substantial loss. Cultural integration must be prioritised to prevent disruptions and maintain operational efficiency. Different corporate cultures can create friction that impedes integration. When looking at potential M&A targets, it is important to assess a company’s strategy, values, leadership style and decision-making processes.
Companies pursuing growth through M&A in Africa must also take into account a range of broader strategic and operational considerations beyond the transaction itself. A key consideration is the regulatory and political environment of the target jurisdictions. Africa is not a homogenous market. Each country presents unique legal, compliance and governance frameworks that can materially impact deal feasibility and execution timelines. Regulatory approvals, foreign ownership restrictions, local content requirements and competition laws must all be navigated carefully.
In addition, macroeconomic factors such as currency volatility, inflation and fluctuating interest rates introduce further complexity into deal structuring and valuation. These dynamics can affect not only the purchase price, but also the ongoing financial performance of the combined entity post-acquisition. As such, acquirers should consider incorporating robust hedging strategies, and conduct comprehensive sensitivity and scenario analyses as part of their financial modelling. Properly anticipating and planning for these variables is critical to achieving sustainable value creation from cross-border M&A on the continent.
A thorough due diligence investigation is paramount to ensure the envisaged growth is sustainable. It can also inform the valuation of the target. Furthermore, developing a post-merger integration plan with actionable steps and clear timelines is crucial.
CONCLUSION
Each company and each deal are different, whether large or small. The use of corporate advisers familiar with the African M&A landscape is essential to tailor the advice to an individual situation because, when executed correctly, there is little that can beat M&A for long-term growth and value creation.
Nhlapho is a Corporate Financier | PSG Capital
Employment contracts in corporate mergers under
Cameroonian law
THORTS
Joelle Zeukeng Azemkeu
The inherent dynamism of corporate life can lead companies to undergo transformations during their existence, and these changes inevitably carry significant legal consequences for the organisation and functioning of the company. Specifically, as part of its strategic vision, a company may decide to restructure in order to adapt to possible economic changes, remain competitive,(1) and maintain or improve its market position. Among the various forms of restructuring is the merger.
Under OHADA commercial company law, a merger is defined as “the operation by which two or more companies come together to form only one, either by creating a new company or by absorption by one of them.”(2) The Uniform Act on Commercial Companies and Economic Interest Groups (AUSCGIE) thus draws a traditional distinction between the creation of a new company by several existing ones (merger by formation of a new company) and the absorption of one company by another (merger-absorption). (3)
Joelle Zeukeng Azemkeu
Although distinguished in Article 189 of the aforementioned Uniform Act, both types of mergers are governed by the same legal regime. The principal consequence of such a legal operation is the universal transfer of the assets and liabilities of the absorbed company to the absorbing company.(4) As such, both the assets and liabilities of the absorbed company are transferred to the new or absorbing entity. Another legal effect is dissolution without liquidation: the absorbed company disappears in favour of the entity that acquires its assets.
This automatic and universal transfer raises the issue of contracts entered into intuitu personae with the absorbed company, particularly employment contracts that are still in force at the time of the merger. Given the principle of privity of contract set out in Article 1165 of the Cameroonian Civil Code, which states that “agreements produce effects only between the contracting parties and do not prejudice third parties,” one might be tempted to conclude that employment contracts would cease to have effect following a merger, as they were entered into based on the specific qualities, both objective and subjective, of the absorbed company and its employees.
However, Article 42 of the Labour Code provides otherwise:
“Where there is a change in the legal situation of the employer, notably by succession, sale, merger, transfer, transformation of business, or incorporation, all employment contracts in force on the date of such change shall continue between the new employer and the company’s staff”. (5)
1. Termination of such contracts can only occur under the terms and conditions laid out in this section.
(a) The above provisions shall not apply:
• When there is a change in the company’s activity;
• When the workers express, before the competent labour inspector, their wish to be dismissed with the payment of their entitlements, prior to the modification.
(b) The cessation of the business, except in cases of force majeure, does not exempt the employer from complying with the provisions of this section. Bankruptcy and judicial liquidation are not considered cases of force majeure.
2. The employment contract may, while in effect, be modified at the initiative of either party.
a) If a substantial modification is proposed by the employer and rejected by the employee, any resulting termination of the contract shall be attributed to the employer. It shall be considered abusive only if the proposed change is not justified by the interests of the company.
b) If a substantial modification is proposed by the employee and rejected by the employer, the contract may only be terminated by a resignation submitted by the employee.”
This article means that in the event of a merger, all employment contracts in force remain valid and are transferred to the new employer. As such, Articles 1165 of the Civil Code and 42 of the Labour Code appear to offer conflicting solutions, raising the question of which provision should prevail under Cameroonian law. The answer lies in a well-established civil law principle: special rules override general ones. Therefore, in accordance with this legal maxim, the fate of employment contracts in the event of a merger is their automatic transfer to the new entity.
This leads to the broader question of whether Cameroonian law effectively protects the parties to the employment contract during mergers. To address this issue, we will evaluate the protection offered both to the employee and the employer. While it is clear that the employee enjoys enhanced protection (1), this comes at the cost of a more limited protection for the employer (2).
1. Enhanced Protection Of Employees In Corporate Mergers
Through Article 42 of the Labour Code, the Cameroonian legislator has clearly reaffirmed the principle of freedom of contract, which is central to Cameroonian labour law. As a result, employees are not passive victims of the merger of their employing company. Their employment contracts continue under the new employer, offering protection through continuity. This ensures that employees are not automatically dismissed as a result of these structural changes, and that their employment relationships are simply transferred to the successor employer.
Furthermore, the merger places a legal obligation on the absorbing company to uphold the contract under its previous conditions, thereby shielding employees from sudden professional instability.
Beyond ensuring job security, the legislator also allows workers to opt out of this continuity by requesting their dismissal and the corresponding entitlements.
While these rights significantly protect employees during mergers, they also, however, dilute the protection available to the employer. (6)
2. Weakened protection of employers in corporate mergers
In employer-employee relationships, the employer is generally seen as the dominant party. Consequently, in the context of mergers, despite the employer often being the primary beneficiary, their legal protection is weakened.
The employer’s economic activity is sacrificed on the altar of contractual freedom for the employee. The latter can choose whether or not to continue the employment relationship, whereas the employer is legally bound to continue executing contracts. Worse still, the employer must pay severance to any employee who chooses to leave.
It is difficult to anticipate the number of employees who may choose to leave during merger negotiations. Similarly, the employer may be forced to allocate a highly speculative budget for potential departures - an economically burden-some scenario.
A recent example in Cameroon illustrates this reality: Mediterranean Shipping Company reportedly lost 400 employees following the acquisition of Bolloré Africa Logistics’ operations, with the employees invoking Article 42 of the Labour Code. Such a situation inevitably leads to financial turmoil.
3. Call for a rebalancing of interests in corporate mergers
Given the above, the solution offered by the legislator in Article 42 of the Labour Code is not attractive for investors. In our view, lawmakers should consider introducing a merger indemnity to encourage employees to stay in their positions. (7)
Employers should also leverage their creativity to implement incentive measures aimed at persuading employees to maintain their contractual relationship, and thus stabilise company operations. For instance, employers could involve employee representatives in the merger negotiations, to help avoid circumstances that could lead to mass resignations and thereby jeopardise business continuity.
Naturally, the elimination of certain roles, duplication of positions, and disruption to team cohesion can result in social tensions, which must be addressed through appropriate negotiations and measures to mitigate both their impact on employees and the risk of investment loss. Human resources remain a pillar of corporate survival and a guarantee of return on investment for the absorbing company.
Finally, the legislator could consider limiting employees’ rights to unilateral dismissal during mergers, in order to prevent the employer from being unduly penalised through excessive severance costs and organisational chaos, especially when the original goal was to enhance competitiveness.
Azemkeu is a lawyer at the Cameroon Bar Association and is an ILFA Alumni
1. R. Sy, Restructuring Operations of Commercial Companies under OHADA Law: The Case of Mergers, published on 26 June 2024, www.village-justice.com, accessed on 1 July 2025;
2. See Article 189 paragraph 1 of the Uniform Act on Commercial Companies and Economic Interest Groups;
3. B. Mator, Mergers of Companies under OHADA Law, Ohadata D-04-19;
4. Ibid.
5. This solution is identical under the labour laws of Niger, Burkina Faso, Mali and Chad. The Cameroonian and Nigerian versions are identical.
6. N. Ekome, Implications of Business Transfers on the Execution of Employment Contracts in Progress in Cameroon, www.village-justice.com, published on 11 July 2017, accessed on 2 July 2025;
7. In February 2023, in Cameroon, 400 employees of Bolloré Transport & Logistics requested to be dismissed under Article 42 of the Labour Code, following the transfer of the company’s African operations to Mediterranean Shipping Company;
THORTS
Virtual Assets Regulation in Southern Africa: a regional
comparative analysis
Lerato Lamola, Tebogo Mapitse, Nawala Kamati, Joseph Waring, Nellie Tiyago and Oldivanda Bacar
Lerato Lamola
Tebogo Mapitse
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Nawala Kamati
The digital revolution is reshaping the global financial landscape, with virtual assets emerging as a powerful force in how financial transactions are conducted. Also referred to as digital assets or crypto assets, virtual assets represent digital representations of value that are fundamentally transforming the financial sector.
In Africa, this transformation is particularly significant. The continent is well-positioned to harness fintech solutions to improve financial inclusion and expand access to essential services. Digital payments offer clear advantages, such as safety, convenience, cost-efficiency and transparency.
Southern Africa offers a compelling case study of how various jurisdictions are responding to the rise of virtual assets. Webber Wentzel (South African firm), in collaboration with its relationship firms in Botswana (Bookbinder Business Law), Namibia (Engling, Stritter and Partners), Eswatini (Waring Attorneys), Zimbabwe (Scanlen and Holderness) and Mozambique (ABCC), has put together a comparative analysis, exploring the regulatory landscape, to understand how virtual assets are being defined, regulated and integrated into the financial system.
DEFINING VIRTUAL ASSETS: REGIONAL VARIATIONS
While there is broad recognition across the region of the importance of virtual assets, definitions differ notably from country to country.
South Africa refers to virtual assets as ‘crypto assets’, describing them as digital representations of value not issued by a central bank, capable of being traded, transferred or stored electronically. These assets are used for payments, investments and other utilities, typically secured using cryptographic techniques, and based on distributed ledger technology (DLT). Crypto assets are not legal tender and do not qualify as money in South Africa.
Botswana adopts a comprehensive definition that includes any digital representation of value that can be digitally traded or transferred, used for payment or investment, or distributed through DLT. However, it explicitly excludes digital representations of legal tender and securities regulated under its Securities Act.
Namibia’s approach is closely aligned with regional standards, defining virtual assets as digital representations of value that can be transferred, stored or traded electronically using DLT. It similarly excludes fiat currencies and regulated securities.
Zimbabwe takes a different path by treating virtual assets as a type of security under its Securities and Exchange Act, while also referencing the FATF definition.
Mozambique opts for a straightforward definition, identifying virtual assets as digital representations of value that can be stored, traded or transferred digitally, and used for payments or investments.
REGULATORY STATUS: DIVERSE APPROACHES
The region presents a mix of regulatory maturity. South Africa, Botswana, Namibia and Mozambique have implemented clear regulatory frameworks for virtual assets. Eswatini has yet to introduce specific legislation, though its 2024 Anti-Money Laundering and Counter-Terrorism Act mandates that supervisory authorities establish frameworks for regulating virtual asset service providers (VASPs).
Zimbabwe occupies a more transitional space. While virtual assets are not yet comprehensively regulated, the Securities and Exchange Act and supporting regulations apply, with the Financial Intelligence Unit (FIU) playing a key role in shaping future frameworks.
LEGISLATIVE FRAMEWORKS AND ENFORCEMENT MECHANISMS
Each jurisdiction has taken a distinct legislative approach. South Africa regulates crypto assets under the Financial Advisory and Intermediary Services Act, with the Financial Sector Conduct Authority (FSCA) responsible for enforcement, and its Financial Intelligence Centre taking responsibility for the anti-money laundering supervision and enforcement.
Botswana has enacted the Virtual Assets Act No. 3 of 2022, with oversight provided by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA).
Namibia has introduced one of the most detailed frameworks through the Virtual Assets Act No. 10 of 2023, supported by a suite of rules covering advertising, capital requirements, client disclosure, custody of client assets, cybersecurity, risk management and more. The Bank of Namibia is the designated regulator.
Mozambique relies on a combination of notices and laws, including Notice No. 4/GBM/2023, dated 14 September, on VASP registration and anti-money laundering regulations, all enforced by the Bank of Mozambique.
Joseph Waring
Nellie Tiyago
Oldivanda Bacar
LICENSING REQUIREMENTS AND MARKET ENTRY
Licensing is required in most jurisdictions, though the structure and complexity vary.
• South Africa requires a Financial Services Provider (FSP) licence.
• Botswana mandates a Virtual Asset Business (VAB) licence.
• Namibia offers six distinct licence types, ranging from token issuance to custody, wallet services and advisory roles.
• Eswatini requires VASPs to obtain a licence under the AML legislation.
• Mozambique requires VASPs to register with the central bank.
PHYSICAL PRESENCE AND OPERATIONAL REQUIREMENTS
Rules around physical presence also vary. Botswana and Namibia require licensed entities to maintain a physical presence. South Africa, Eswatini and Zimbabwe do not impose such requirements. Mozambique falls somewhere in between, requiring foreign VASPs to comply with local registration and compliance obligations without mandating physical presence.
FINANCIAL REQUIREMENTS REFLECT VARYING DEGREES OF REGULATORY DETAIL.
• South Africa mandates that crypto asset FSPs maintain sufficient financial resources to meet liabilities as they arise.
• Botswana requires VAB licence holders to maintain liquid assets equal to half of estimated gross operating costs for the following 12 months, plus base capital as determined by NBFIRA.
• Namibia sets the most detailed requirements, with minimum capital thresholds ranging from basic working capital to NAD 2.7 million for marketplace operators.
No jurisdiction in this analysis imposes local ownership requirements on VASPs. However, changes in ownership typically require regulatory approval, particularly where significant shareholding is involved. All regulated jurisdictions impose ‘fit and proper’ standards on shareholders and directors to ensure appropriate levels of competence, integrity and professional conduct.
ANTI-MONEY LAUNDERING AND COMPLIANCE OBLIGATIONS
A consistent feature across the region is the classification of VASPs as accountable institutions under anti-money laundering laws. This requires them to register with financial intelligence units and implement compliance frameworks covering customer due diligence, suspicious transaction reporting, and measures to combat money laundering, terrorist financing and proliferation financing.
Southern Africa is steadily developing a cohesive regulatory environment for virtual assets. While countries are at different stages of regulatory maturity, there is a clear trend toward comprehensive oversight that balances innovation with consumer protection and financial stability.
South Africa, Botswana, Namibia and Mozambique have made notable progress, while Eswatini and Zimbabwe are laying the groundwork for future regulation. The emphasis on anti-money laundering compliance across the board reflects a shared regional commitment to safeguarding financial systems while enabling technological advancement.
As the virtual asset ecosystem evolves, regulatory convergence across the region is likely, particularly around best practices and international standards. This emerging regulatory clarity is positioning Southern Africa as a promising environment for the responsible development and adoption of virtual assets.
For a more detailed analysis and jurisdiction-specific insights, download the full Virtual Assets Regulation in Southern Africa document here.
Lamola is a Partner | Webber Wentzel,
Mapitse a Partner | Bookbinder Business Law,
Kamati a Partner | Engling, Stritter & Partners,
Waring a Partner | Waring Attorneys,
Tiyago a Partner | Scalen & Holderness and
Bacar a Partner | ABCC
