POLITICS, APATHY AND ECONOMIC WOES DIM AFRICAN HOPES FOR US INCENTIVES

POLITICS, APATHY AND ECONOMIC WOES DIM AFRICAN HOPES FOR US INCENTIVES

A sagging domestic economy, election-year politics and the U.S. business community's general apathy toward Africa are bound to stall an African business group's attempts to gain trade and investment incentives from the United States, analysts here said.

The African private sector also is competing for U.S. government and business attention with other capital-starved regions that have stronger political constituencies in Washington, the analysts said."Africa is off the radar screen as far as the conventional institutional investor is concerned," said William Moses, a senior analyst at Investor Responsibility Research Center Inc., of Washington, D.C. "It's unlikely that more attention will be focused on Africa when there's not that much money to spend and it's a risky area to put money into."

A delegation from the African Business Round Table, a group of Africa's top entrepreneurs, met with key U.S. officials in Washington last week. Their visit included testimony before Congress, where they asked for some of the same trade and investment breaks the United States has extended to Latin American and Caribbean nations.

Members of the group's executive committee who testified before a joint subcommittee of the House of Representatives called for the type of tax incentives and trade measures afforded U.S. trading partners under the Caribbean Basin Initiative. They also asked the United States to set up a $500 million multilateral investment fund that would provide loans and grants for projects to help boost Africa's private sector.

C. Payne Lucas, executive director of Africare, labeled the round table's work "rather revolutionary." For the first time, he said, Africa's private sector is demanding accountability from its public officials and trying to take politics out of the country's economic development.

Africare, a non-profit organization in Washington, D.C., raises public and private sector funds for development projects in nearly 30 African countries.

"A month ago, I think there would have been some promise. There's a whole brand new frontier of opportunities in Africa," Mr. Lucas said. "But it's difficult to get action now . . . The domestic (U.S.) problems mean no one will listen to Africa's problems."

Mr. Lucas and others agree that any emerging interest among U.S. investors is overshadowed by the recent changes in Eastern Europe and the former Soviet Union.

"There's competition for U.S. resources from the former Soviet Union to the Pacific," said Carol Lancaster, a visiting fellow at the Institute for International Economics, of Washington, D.C. "The interest for Africa has evaporated."

Others say the trade and investment initiatives will stand a better chance if African-Americans are able to build a political constituency to create support for Africa.

"Perhaps if black Americans take it up as an issue," said Michael Clough, a senior fellow for African studies at the Council on Foreign Relations in New York. "But right now, the chances (of passage) are slim to none."

Analysts add that Congress, facing angry constituents hurt by the ongoing U.S. recession, are unlikely to push for additional foreign aid or preferential trade measures for Africa. And any efforts by the Bush administration to push for preferential trade treatment is further complicated by the faltering Uruguay Round of international trade liberalization talks under the General Agreement on Tariffs and Trade (GATT).

"There isn't much of an ability to push for regional approaches, other than the (proposed) North American free-trade agreement, unless there's clarity in GATT," said James Berg, executive director of the Overseas Private Investment Corp. "The timing of the elections is less important than the Uruguay Round."

GATT is the Geneva-based body that sets rules for most of the world's trade. Disputes over agriculture are threatening to derail the current Uruguay Round of negotiations.

Mr. Berg said the Bush administration generally supports the creation of multilateral funds that foster private sector development. The African round table pointed to the $1.5 billion multilateral fund that is part of President Bush's Enterprise for the Americas Initiative as an example of U.S. efforts in this arena.

But Mr. Berg said even if the Bush administration created a multilateral fund tomorrow, funding would have to wait until next year as the 1993 fiscal year budget is already before Congress. Congress also would have to approve any additional appropriations.

LEADING SITES OF US INVESTMENT IN AFRICA AS OF END-1990

Egypt $1.45 billion

Gabon $463 million

Angola $380 million

Cameroon $277 million

Libya $246 million

Nigeria $210 million

Ghana $173 million

Cote d'Ivoire $143 million

Kenya $99 million

Guinea $85 million

Source: Bureau of Economic Analysis, U.S. Department of Commerce