The rule of law is crucial for domestic direct investment and foreign direct investment, as it ensures the consistent application of laws, providing certainty and predictability about the legal system’s capacity to protect investors’ rights. Investors value a legal system where outcomes are not influenced by corruption or transactional engagement.
A fair application of laws promotes a business-friendly environment, fostering trade and commerce. Adherence to the rule of law is strengthened when laws can hold accountable those responsible for upholding judicial wisdom. Arbitrary, unfair, and uncertain application of laws can deter investors.
The suspension of the Chief Justice may have significant implications for investment interests if due process and procedures provided in the constitution have not been followed.
Also the suspension does not create an administrative and legal vacuum. Where investors find the rule of law in operation, they consider it as a conducive environment to operate. Investors may be concerned about inconsistent, arbitrary, and unfair application of laws which may impact long-term investment strategies and international agreements.
In the context of investors, the rule of law means access to justice without impediments, enforcement of judicial decisions, protection of investors’ rights, including property rights, and certainty of the legal system’s treatment of government, individuals, and the private sector.
Investments are attracted by an environment that respects the rule of law irrespective of personalities and puts in place necessary infrastructure and incentives both fiscal and environmental.
