The continued relevance of customary law for the regulation of the daily lives of Africa's citizens poses serious governance challenges to sovereign states, such as how best to regulate customary dispute settlement. While confronted with largely similar problems, the South African government proposed to enhance and regulate the position of its traditional courts, whereas Malawi has opted for the creation of hybrid local courts that combine characteristics of regular state courts and customary fora to be the main avenue of customary law cases. This paper analyzes the strengths and weaknesses of both approaches and displays how the two countries’ historical and political contexts enable and constrain their regulatory choices in the field of customary dispute settlement, as well as influence the risk and benefits of the various options. In this respect, the political power of the traditional leaders is a significant determinant.