THE AUTHORS:
Wesley Pydiamah, Partner at Eversheds Sutherland
Nicolas Jelonek, Associate at Eversheds Sutherland
Background
The Sahel is a region in Africa located to the south of the Sahara desert that stretches from the Atlantic Ocean in the West to the Red Sea in the East. In recent years, three countries in this region – Mali, Burkina Faso, and Niger – have experienced a significant degree of instability which has principally stemmed from governance and economic development challenges, and attacks from various Islamist insurgencies which their civilian governments had struggled to quell. All three countries appear among the five countries most affected by terrorism worldwide, according to the 2025 Global Terrorism Index.
This instability triggered a wave of successive military coups in these States, followed by the refusal of the military juntas that instigated them to relinquish power. The prevailing volatility was thus exacerbated. In fact, the broader region has informally been referred to as the ‘Coup Belt’, since the countries affected by this phenomenon form a continuous chain stretching between the east and west coasts of the African continent.
The first such coup took place in Mali in August 2020, resulting in the overthrow of President Ibrahim Boubacar Keïta. Following another coup in May 2021, General Assimi Goïta took power in that country.
In the context of a worsening security situation, an initial coup occurred in Burkina Faso in January 2022 in which President Roch Marc Christian Kaboré was deposed and Lieutenant Colonel Paul-Henri Sandaogo Damiba became president. The latter was himself overthrown in September 2022 by fellow military officer Captain Ibrahim Traoré, who has since led the country under military rule.
Finally, in Niger, President Mohamed Bazoum was overthrown by a military coup in July 2023, which resulted in General Abdourahamane Tchiani being proclaimed head of State.
All three countries were suspended by the Economic Community of West African States (“ECOWAS”) shortly after their respective coups. They responded by issuing a joint statement in January 2024 in which they announced their withdrawal from this regional body. The series of coups also led to the suspension of these three countries from the African Union. While all three juntas have pledged to suspend military rule and return to civilian rule, these plans have been delayed.
Shortly after their exit from ECOWAS, Mali, Burkina Faso, and Niger created an alternative regional cooperation institution – the Confederation of Sahel States (“AES”). Originally intended as a mutual defence pact, its scope has progressively broadened in an effort to fill the void left by ECOWAS and achieve greater integration. The AES now seeks to pool resources in order to build energy and communications infrastructure, establish a common market, implement a monetary union with a single currency, allow free movement of persons, facilitate industrialisation, and invest in agriculture, mines, and the energy sector.
Against this backdrop of instability, and while lucrative investment opportunities remain and net inflows of foreign direct investments continue to be positive in Mali, Burkina Faso, and Niger despite the wave of coups, various disputes have already arisen, and more are likely to be expected.
Recent Measures
For both ideological and budgetary reasons, the juntas leading the AES countries have recently started renegotiating and reevaluating relationships with Western and Chinese companies to assert greater control over their resources and operations in a variety of sectors. They have also started taking more forceful measures, including expropriations, nationalisations and the revocation of mining permits.
Resource nationalism is particularly prevalent in the extractive sector, which is highly strategic in view of the abundance of natural resources such as uranium, gold, and other precious metals in the region. For example, Barrick, a Canadian company, was engaged in a dispute with Mali since 2023 over:
- the division of economic benefits from one of its gold mines in the country;
- the blocking of its gold exports by the government;
- the repeated seizure by the government of the company’s gold stock by helicopter;
- the retroactive application of the country’s new mining code to current operations rather than just future projects;
- the detention of four of the company’s employees;
- the closure of its offices in Bamako;
- the issuance of an arrest warrant against its CEO; and
- the placing of its operations under provisional administration by a local court.
While ICSID arbitration proceedings were initiated, the parties subsequently reached a settlement resolving the dispute.
Similarly, the junta in Niger has taken various measures against Orano, a French State-owned nuclear fuel company with extensive uranium mining operations in the country. These measures include the blocking of uranium exports in 2023, the withdrawal of one of the company’s mining licences in 2024, and the taking of operational control and subsequent nationalisation of one of its subsidiaries in 2025. The company has initiated several contract-based ICSID (International Centre for Settlement of Investment Disputes) and CCJA (Common Court of Justice and Arbitration of OHADA) arbitrations in response.
In the banking sector, the military government in Burkina Faso nationalised the Libyan Foreign Bank’s 50% shareholding in Banque Commerciale du Burkina in 2024 as it had allegedly not provided adequate support to its joint-venture with the State.
In the telecommunications sector, Mali made Maroc Telecom’s local subsidiary pay a fee of US$ 272m to renew its operating licence. This amount was significantly greater than what its competitor Orange was charged for the renewal of its licence in 2017. Mali also subsequently increased its shareholding in Maroc Telecom’s local entity from 49% to 56%, thereby assuming control over it.
Finally, in the aviation sector, Air France was banned from operating in Mali, Burkina Faso, and Niger in 2023. Flights had still not resumed at the time of writing. A number of international arbitration proceedings have recently been initiated in response to these measures. As at the date of publication, at least three cases have been brought against Mali, one against Burkina Faso, and four against Niger in relation to measures taken following their respective coups.
Investor Protections
Foreign investors confronted with measures such as those described above may rely upon enforceable rights derived from investment contracts (A), investment protection treaties (B) and/or the domestic legislation of the host State (C).
Investment Contracts
Investment contracts are international commercial contracts between an individual foreign investor (or a group of foreign investors) and a State or State-owned entity. Although these contracts are very heterogeneous, they are particularly common in the natural resources sector. They typically contain a number of substantive protections and a dispute resolution clause that most often refers disputes to international arbitration under the ICSID, ICC (International Chamber of Commerce), or UNCITRAL (United Nations Commission on International Trade Law) rules.
A distinctive feature found in many investment contracts is the stabilisation clause, which, if well drafted, shields a foreign investor from adverse legislative or regulatory changes for a defined period by stabilising or freezing the law of the host State at the moment the contract is signed, or by guaranteeing that the economic equilibrium between the parties will be preserved. The purpose of such clauses is to provide greater certainty and predictability to the foreign investor. Indeed, foreign investors often commit significant capital towards long-term projects, and changes in legislation or regulatory frameworks, such as a tax increase, can materially alter the economics of a project. It should, however, be noted that compensation for breach is much more likely to be ordered than specific performance, as tribunals are often reluctant to encroach on the host State’s sovereign prerogatives.
In principle, investment contracts prohibit the State party from terminating or making unilateral changes to the terms of the investment contract absent the mutual consent of the parties. The current instability in the Sahel provides fertile ground for these clauses to come into play, as military governments may be tempted to renege on contractual commitments and amend national legislation. In Mali, for instance, General Assimi Goïta recently promulgated a new mining code which introduced major changes, such as the possibility for the State to take a stake of up to 30% in new projects and the abolition of certain tax exemptions, which could trigger the stabilisation clauses in certain mining contracts and lead to disputes between foreign investors in the mining sector and the State.
Investment Protection Treaties
Investment protection treaties are bilateral or multilateral agreements concluded between an investor’s country of origin and a host State. They are intended to promote and protect investments made by investors from one party in the territory of another and thus reduce the political and legal risks associated with investing abroad. They typically set out an array of legal standards, some of which are of particular relevance to investors seeking to navigate the volatile operating climate in the Sahel. A hallmark of these treaties is that they most often contain an investor-State dispute settlement mechanism, which allows investors to sue host States directly by means of international arbitration (typically under the ICSID or UNCITRAL arbitration rules). This allows investors to have their cases heard by a neutral and depoliticised international tribunal as opposed to the domestic courts of the host State.
At the time of writing, Mali is a party to eight bilateral investment treaties (“BIT”) that are in force, Burkina Faso maintains a network of 14 such treaties, and Niger is bound by three of them. In addition, all three countries are parties to the OIC Investment Agreement (1981) (although Niger has only signed, not ratified, the treaty). The OIC Investment Agreement is a multilateral investment protection agreement that was concluded in 1981 under the auspices of the Organisation of Islamic Cooperation.
Fair and equitable treatment (“FET”) is one of the most emblematic protections available to qualifying foreign investors (see for example Article 2(1) of the Germany-Burkina Faso BIT (1996)). Breaches of this standard can take many forms, including denial of justice, frustration of the investor’s legitimate expectations, coercion, harassment, arbitrary conduct, and discrimination.
Many of the measures detailed in Section II above are motivated by the juntas’ hostility to the West. Investors from countries like Russia, China, and Turkey thus stand to benefit, with partners being preferred on the basis of nationality. Such conduct may open the door to FET claims as it is generally accepted that discrimination can amount to a breach of the FET obligation.
Most investment protection treaties also contain provisions that deal with expropriation (see for example Article 4 of the Mali-China BIT (2009)). These clauses typically prohibit the taking of a foreign investment when this is not done for a public purpose, on a non-discriminatory basis, with due process, and upon the payment of adequate compensation. They can be useful in a context of increasing resource nationalism, with the juntas openly expressing their desire to assert greater control over the natural resources of their respective countries.
Another key standard of protection in the volatile Sahelian context is full protection and security (“FPS”), which is a common fixture of most investment protection treaties (see for example Article 3(1) of the Germany-Niger BIT (1964); Article 2(2) of the Mali-UAE BIT (2018); Article 3(2) of the Turkey-Mali BIT (2018)). FPS clauses typically impose an obligation on the host State to refrain from harming investors and/or investments through acts of State organs or acts otherwise attributable to the State and to protect investors and investments from actions of private parties. It also imposes a duty on the host State to provide a satisfactory response if an incident has already occurred. It should however be noted that the FPS standard does not confer absolute protection upon foreign investors. It is merely an obligation of reasonable efforts and diligence, and tribunals will often take into account the fact that developing countries have more limited resources.
Against the backdrop of persistent and intensifying Islamist attacks since the military juntas took power and ordered the departure of French and US troops, and where ever-greater swathes of their respective territories are no longer under the control of their often underequipped militaries, it is probable that the FPS standard will be invoked by foreign investors in the near-term.
An illustrative situation can be found in the recent fate of Chinese investments in Niger’s oil sector. In 2008, the government of Niger signed a production-sharing agreement with the state-owned China National Petroleum Corporation (“CNPC”). That deal led CNPC to construct and operate a refinery and a nearly 2,000 km-long pipeline from the Agadem oil field to the coast of neighbouring Benin. This pipeline, which was the fruit of an investment of approximately US$ 2.3bn by CNPC, was damaged by anti-junta rebels in June 2024 and was targeted again the following month. In addition, in July 2024, three CNPC employees were kidnapped by Islamist militants near the border with Burkina Faso, leading the company to temporarily suspend its operations and incur losses of US$ 9m per day. This pipeline was reportedly sabotaged once again in January 2025, and two further CNPC employees were abducted in March 2025. These events occurred against the backdrop of the military government expelling three Chinese oil executives from the country, claiming tax arrears, ordering the termination and expulsion of Chinese employees, threatening further sanctions and expropriations, and demanding supplementary advance payments for forthcoming oil exports.
Another example was observed in Mali in January 2026, where jihadists attacked the Morila gold mine – a facility in relation to which the US’ Flagship Gold Corp signed an investment agreement with Mali’s State-owned mining company in 2025. The insurgents notably fired at and burned equipment and took seven employees hostage before subsequently releasing them.
Domestic Legislation of the Host State
In the absence of an investment contract and/or investment treaty coverage, it may remain possible to turn to domestic legislation. Indeed, Mali, Burkina Faso, and Niger have all enacted investment laws which offer a certain number of substantive protections and provide for the recourse to arbitration to varying degrees.
The Malian investment law of 2012 applies to domestic and foreign investors (Article 2) who comply with an investment approval procedure and are not active in the banking, finance or telecommunications sectors or in fields governed by sector-specific codes (such as the mining sector) (Article 3). It protects foreign investors from discriminatory treatment (Article 6), nationalisation and expropriation without compensation (Article 7), and also contains a free transfer provision (Article 12). Disputes between foreign investors and the State under this instrument can be referred to ad hoc, ICSID, or OHADA arbitration (Article 29).
In Burkina Faso, the country’s investment law of 2013 coexists with its investment code of 2018. The 2018 investment code contains a number of standards of protection, including national treatment, fair and equitable treatment, full protection and security, non-discrimination (Article 12), and free transfer (Article 13). It also grants access to ICSID or CCJA arbitration (Articles 38 and 39). However, in order to benefit from the protections offered by the Investment Code, an investment approval procedure must be complied with (Article 7).
Burkina Faso’s 2013 investment law is broader in scope. It notably guarantees rights of free transfer and non-discrimination (Article 5) and contains a comprehensive expropriation clause (Article 18). It also provides that the State is to put in place an institutional and regulatory framework intended to guarantee the security of investments and investors (Article 14). The dispute settlement provision in this law is very accommodating as it notably provides for ICSID arbitration, arbitration administered by the PCA (Permanent Court of Arbitration), and regional arbitration (Article 17).
Finally, Niger’s investment code, as adopted in 2014, covers approved investments made in a wide array of sectors, including agriculture, manufacturing, renewable energy, mining (in instances where the country’s mining code and oil code do not apply), chemicals, and hospitality (Article 4). Investors covered by this legislation are notably shielded from nationalisations and expropriations without compensation (Article 6) as well as from discriminatory treatment (Article 12). Both ad hoc and ICSID arbitration are also provided for (Article 47).
Furthermore, in view of the strategic importance of the mining sector to their respective economies, Mali, Burkina Faso, and Niger have all recently adopted new mining legislation, and some of these instruments may be relied on to access arbitration. For instance, Article 217 of the new Malian mining code refers disputes between mining rights holders and the State in relation to matters governed by the mining code either to the Malian courts, to arbitration under the aegis of a regional arbitration institution, or to international arbitration (if this latter option is provided for in the establishment agreement).
ABOUT THE AUTHORS
Wesley Pydiamah is the Global Co-Head of Eversheds Sutherland’s International Arbitration Group and Deputy Head of the firm’s Africa Group. He has acted as counsel and advocate for governments, state entities and private multinational companies in dozens of arbitrations and in a number of high-profile cases under a range of arbitration rules including inter alia ICC, ICSID, UNCITRAL, LCIA, PCA, and SIAC. Wesley also has significant experience in public international matters and proceedings before international tribunals such as the Iran-US Claims Tribunal in The Hague. His practice spans a number of industries, notably the telecoms, energy, mining, automotive, construction, and financial sectors. Wesley’s regional focus is on Africa and the Middle East.
Nicolas Jelonek is an associate in Eversheds Sutherland’sInternational Arbitration and PublicInternational Law group. He advises corporations and States in relation to internationalcommercial and investor-State arbitrations conducted under the ICC, ICSID, and UNCITRAL rules. His practice also includesassisting clients in annulment proceedings before the Frenchcourts. He has represented clients across a broad range of sectors, including the energy, mining, automotive, construction, and financial industries.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
