Legal and insolvency experts have urged Nigeria and other African countries to strengthen their insolvency frameworks by integrating alternative dispute resolution (ADR) mechanisms, fast-tracking judicial processes, and adopting cross-border cooperation strategies to attract investment and enhance economic resilience.

Speaking at a session organised by the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), judges and insolvency specialists outlined practical recommendations to make corporate rescue more efficient in the region.

Justice Onyekachi Otisi of the Court of Appeal emphasised that while Nigeria’s Companies and Allied Matters Act (CAMA) 2020 provides a robust legal framework for insolvency, procedural weaknesses continue to slow resolutions. She highlighted the heavy reliance on courts, which contributes to delays, inefficiencies, and high costs.

According to World Bank data cited at the event, insolvency cases in Nigeria take an average of two years to resolve, with costs amounting to 22 percent of the estate and creditors recovering only 27.8 cents per dollar.

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Justice Otisi recommended introducing ADR, especially mediation, at the pre-insolvency stage to reduce delays and lower costs.

“Before applications are made to the courts for endorsement of restructuring tools such as schemes of arrangement, voluntary arrangements, or administration, parties guided by insolvency practitioners should explore mediation,” she said. “This would ease tensions, minimise prolonged litigation, and ensure more efficient outcomes.”

She urged BRIPAN to push for policy reforms that would institutionalise ADR in insolvency cases, arguing that this would complement, rather than replace, the courts’ supervisory role.

Also speaking, Justice Alexander Owoeye of the Federal High Court stressed the need for Nigerian courts to play a more active role in promoting corporate rescue through Company Voluntary Arrangements (CVAs).

He noted that courts are central in ensuring that nominees supervising CVAs act within the law and in safeguarding creditors’ rights when disputes arise.

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However, Owoeye warned that insolvency matters are time-sensitive and should not be bogged down by delays. He called for new practice directions to fast-track insolvency-related cases and recommended specialised training for judges on the technicalities of corporate rescue mechanisms.

“If these measures are adopted, Nigerian businesses will be better positioned to survive financial distress and remain competitive,” he added.

From a regional perspective, Ugandan insolvency expert Kabito Karamagi highlighted the importance of cross-border cooperation, citing the failure of several multinational insolvency cases due to mistrust and weak legal frameworks.

The Managing Partner of Ligomarc Advocates, Kampala, Uganda, explained that only a handful of African countries, including Uganda and Kenya, have adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency.

Karamagi recommended that more African nations adopt and adapt the model law to facilitate judicial cooperation, joint hearings, and coordinated recovery strategies.

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“With the African Continental Free Trade Area driving increased cross-border business, insolvency risks will inevitably grow. We must build frameworks that ensure order, fairness, and value recovery for creditors across jurisdictions,” he said.

Adding to the discussion, Justice Chenda Kazimbe of Zambia stressed the importance of judicial case management in expediting insolvency matters.

He noted that Zambia has introduced administrative rules setting strict timelines, such as one year for insolvency petitions and 45 days for motions, to avoid backlogs.

He recommended that Nigeria and other African jurisdictions adopt similar case management approaches, encourage ADR in insolvency disputes, and invest in continuous training for judges and insolvency practitioners.

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In their closing remarks, the experts agreed that reforms must focus on three key areas: Institutionalising ADR in pre-insolvency and restructuring processes to cut costs and delays, fast-tracking court procedures through practice directions and specialised training for judges and strengthening cross-border insolvency cooperation by adopting international best practices such as the UNCITRAL model law.

They concluded that without these reforms, Nigeria and Africa risked scaring away investors and undermining business resilience. But with coordinated action, the continent could build an insolvency system that is “efficient, credible, and attractive to investors.”