Africa moves to regulate CSR: A new era for responsible business practices

As the conversation around sustainable development intensifies globally, African governments and regional blocs are increasingly recognizing the need to create regulatory environments that not only encourage but enforce responsible business practices through Corporate Social Responsibility (CSR).

Historically, CSR in many African countries has been voluntary, often driven by multinational corporations seeking to align with global sustainability standards. However, this approach has yielded mixed results, with many local communities citing tokenistic projects that lack long-term impact.

But a shift is underway, and in countries like South Africa, the Companies Act (2008) and the King IV Report on Corporate Governance have integrated CSR into corporate governance frameworks, urging companies to act in the interest of all stakeholders—not just shareholders. South Africa’s legislation is often hailed as a model, requiring companies to disclose sustainability performance and engage meaningfully with communities.

“CSR cannot be an afterthought or a PR stunt,” says Dr. Linda Wekesa, a Nairobi-based corporate governance expert. “It must be embedded in how businesses operate, and governments need to set the tone.”

In terms of regional momentum, the African Union’s Agenda 2063 includes a strong emphasis on inclusive growth and sustainable development, encouraging member states to adopt policies that promote ethical investment, environmental protection, and social equity. Several West African countries, including Ghana and Nigeria, have begun drafting CSR guidelines that could soon carry legal weight.

Meanwhile, in Ghana, the Minerals and Mining Act (2006) requires mining companies to submit CSR plans as part of their license application. Though not yet legally binding, new proposals from the Ministry of Trade and Industry aim to codify CSR obligations into law, with penalties for non-compliance. There is hope that, this would help government efforts at encouraging responsible mining across-board and also regulate the small scale mining sector.

“Nations must hold corporations accountable for their impact—positive or negative,” says Kwame Mensah, a legal analyst with the Ghana Institute for Economic Affairs. “Regulation doesn’t kill business; it strengthens the social contract.”

A study by Ibrahim et al. (2023) has highlighted the positive relationship between regulatory-backed CSR and firm innovation and financial performance, particularly in extractive industries.This has established a strong case for business regulation

The study argued that “a regulatory framework guiding CSR practices enhances accountability and fosters sustainable innovation.”

This is supported by findings from the United Nations Economic Commission for Africa (UNECA), which stress that regulatory CSR not only protects communities but also levels the playing field for local businesses.

African civil society organizations are also stepping up. In Nigeria, the CSR-in-Action Advocacy Group has launched the National Business and Human Rights Roundtable, lobbying for a binding CSR framework that protects community rights, particularly in oil-producing regions. A similar push can be made in oil producing regions across the rest of Africa.

“Voluntary CSR has failed to prevent human rights abuses and environmental degradation,” says Bekeme Masade-Olowola, the organization’s executive director. “It’s time to make CSR enforceable.”

As African economies grow and attract foreign investment, stakeholders argue that regulatory CSR can help align corporate activities with national development goals. While challenges remain—such as weak enforcement mechanisms and corporate resistance—momentum is building.

Surely, Africa’s future won’t be built on unchecked capitalism — it must be anchored in accountability, where profit walks hand in hand with purpose.