U.S. firms eye Africa trade, democracy
10:36 a.m. Sep 17, 1998 Eastern
By Darren Schuettler

NAIROBI, Sept 17 (Reuters) - U.S. Commerce Secretary William Daley said on
Thursday American interest in investing in Africa was high, but companies
wanted to see fewer trade barriers and better government before committing
their dollars.

Speaking to a business luncheon in the Kenyan capital, Daley said U.S. firms
in Africa were committed to riding out the emerging market chaos of recent
weeks, which has battered most African economies.

But concerns about trade and democracy issues would be high on the agenda of
a U.S. trade delegation Daley would lead to five African countries in early
December.

``They (companies) want to see governments taking steps that will help spur
private sector growth -- from stimulating investment to cutting trade
barriers and to more privatisation,'' Daley said in his speech.

``They want to see greater accountability, integrity and openness in
government.''

Despite Africa's abundant natural resources and hard currency-earning
commodities, investment there has slowed because of wars, civil unrest,
corruption and mismanagement, trade experts said. As a result, the
continent's share of world trade has halved in the past four decades.

The United States accounts for about seven percent of Africa's imports while
only one percent of U.S. exports goes there.

During President Bill Clinton's tour of Africa earlier this year, U.S.
officials touted the U.S. Africa trade bill going through Congress at
present as a key component in the government's ``trade not aid'' policy
towards African development.

But it would be difficult to win passage of the trade bill before the end of
the U.S Congress' current session which ends in three to four weeks, Daley
said.

``If Congress decides they can't act in this short period, we will be back
to the table early next year to push this,'' he later told reporters.

The commerce secretary said the issue of governance was discussed during his
private talks with Kenyan President Daniel arap Moi earlier on Thursday.

Daley said Moi assured him the government was making progress in resolving
these problems.

The commerce secretary said governance issues were at the heart of any
government's ability to lure foreign investment.

``Investors do not want to go to countries where you have corruption
rampant, human rights violations or you have democracy problems.''

Kenya is grappling with rampant corruption which has soured relations with
foreign investors and prompted aid donors to withhold much-needed funds.

Earlier this month the World Bank said it would cut aid to the east African
country because of past misappropriation and the poor state of Kenya's
economy.

The International Monetary Fund in July last year pulled a key $250 million
loan package due to governance and corruption concerns. The IMF decision
sparked a flight of foreign investors from Kenyan financial markets.

The commerce secretary's brief visit to Kenya was part of a three-nation
tour which included South Africa and Tanzania earlier this week.

Daley was to lead a trade delegation of 20 U.S. business leaders to Africa
this week, but the tour was cancelled in the wake of the U.S. embassy
bombings in Nairobi and the Tanzanian capital Dar es Salaam, killing over
260 people and injuring 5,000 others.

Daley laid a wreath at the bomb site in Nairobi earlier on Thursday and
pledged ``substantial emergency funds'' to aid victims of the blasts in both
countries. Daley told reporters a final figure had not yet been calculated,
but said the administration would submit a request to Congress soon.


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