THE CASE FOR AND AGAINST USE OF AN EXEMPTION SYSTEM TO INCREASE INVESTMENT IN AFRICA

Just as the case for invigorating trade and other relations with Africa may not be readily apparent to some, the case for revising those features of the U.S. tax system that disfavor investment in the sub-Saharan world is not intuitive. Although European countries, Mexico, Canada, Japan, and some developing nations, such as China, India, and Venezuela, have commanded partnerships with the United States, African nations have not. A continent of vast natural resources and a considerable labor force, Africa is nonetheless “one of the last regions … to enter the global economy.”

The African continent contains a total population of about 778,000,000. Sub-Saharan Africa includes two-thirds of that total, or 642,800,000, among forty-four countries. To date, the situation of much of Africa in the new economy has been that of aid recipient, region of civil and inter-nation strife, location of catastrophic natural disasters, scene of devastating illness, and situs of relentless poverty and shortened life expectancy. Implicit in President Clinton's campaign to eliminate debt of some of the poorest African nations was an acknowledgment of the critical needs of a population for which annual per capita gross national product ranges from $110 to $4,120. Although the debt relief initiative seems well-intentioned, it may have minimal positive impact on the lives of residents of sub-Saharan Africa. Actual provision of relief has been tied to enumerated improvements in infrastructure, including education, health care, transportation, and economic reforms, which fewer than a handful of nations may achieve in the foreseeable future.