Law is society's institution which articulates rules to govern legal and non-legal institutions. Rules of legal institutions aim to protect the citizen against discretionary and arbitrary power, ensure equality with others and guarantee procedural fairness. Impartial administration of the law through independent accessible courts and a democratic process of law-making, defines and enforces the limits and powers of state institutions and sets out the scope of legitimate state intervention in the affairs of its citizens. To the extent that the rule of law accomplishes this, a neutral legal order exists, capable of supporting the competitive market economy in the following ways: a) ensuring predictability and security of property rights and transactions
b) limiting arbitrary and discretional rational power of the state and its agents
c) maintaining the independence of the judiciary and at the same time curtailing judicial activism
and d) limiting the retroactivity of rules of law. Because of the lack of a formalized private sector in Africa, in many countries the State plays a major role in economic activity
it may supercede or qualify the market. This makes it even more important that the law should emphasize fair and efficient administration.