I 
109TH CONGRESS 
2D SESSION 
H. R. 5480 
To promote economic diversification, entrepreneurship, and private sector 
development in Africa, and to promote partnerships among small and 
medium enterprises in the United States and the African private sector 
in qualified sub-Saharan African countries. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 25, 2006 
Mr. MCDERMOTT (for himself, Mr. LANTOS, Mr. RANGEL, Mr. PAYNE, Mr. 
ENGLISH of Pennsylvania, Ms. MCCOLLUM of Minnesota, Mr. JEFFER-
SON, Mr. BERMAN, Mr. DOGGETT, Ms. MILLENDER-MCDONALD, Mr. 
MEEKS of New York, Mr. MCNULTY, Mr. MCGOVERN, Ms. BORDALLO, 
Ms. WATSON, Ms. CORRINE BROWN of Florida, Ms. EDDIE BERNICE 
JOHNSON of Texas, Mr. GONZALEZ, Mr. MILLER of North Carolina, and 
Ms. JACKSON-LEE of Texas) introduced the following bill; which was re-
ferred to the Committee on International Relations, and in addition to 
the Committees on Ways and Means, Small Business, and Financial 
Services, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To promote economic diversification, entrepreneurship, and 
private sector development in Africa, and to promote 
partnerships among small and medium enterprises in 
the United States and the African private sector in quali-
fied sub-Saharan African countries. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘African Entrepreneur-
ship Act of 2006’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) According to the Organization for Economic 
Co-operation and Development (OECD), the econo-
mies of sub-Saharan African countries have reg-
istered their highest overall growth in eight years— 
more than five percent in 2004—due to rising global 
commodity prices, the expansion of production in oil- 
producing sub-Saharan African countries, and pru-
dent macro-economic policies. 
(2) While economic liberalization has reduced 
the involvement of governments of sub-Saharan Afri-
can countries in the economic sector, it has not re-
sulted in improved credit delivery to finance domes-
tic businesses, particularly small and medium enter-
prises in sub-Saharan African countries, in the pri-
vate sector. 
(3) Increasingly, governments of sub-Saharan 
African countries are making concerted efforts to in-
vestigate corruption, prosecute corrupt officials, and 
recover public funds through the creation of agencies 
such as the Economic and Financial Crimes Com-
mission in Nigeria, the Serious Fraud Office in 
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Ghana, the Federal Ethics and Anticorruption Com-
mission in Ethiopia, and the Anticorruption Com-
mission in Zambia. 
(4) A major challenge for sub-Saharan African 
countries is to productively invest their own capital 
to expand domestic business ownership and create 
employment, particularly for youth, in order to pro-
mote broad and sustainable economic growth and de-
mocracy. 
(5) While the microenterprise movement has 
shown itself to be an important generator of self-em-
ployment, research and experience throughout sub- 
Saharan Africa also have proven that small and me-
dium enterprises are the greatest catalyst for job 
creation, skills transfer, and wealth creation in sub- 
Saharan Africa. 
(6) Although small and medium enterprises in 
sub-Saharan African countries make up the largest 
portion of the formal economy in sub-Saharan Afri-
can countries, the average annual contribution of in-
vestments of such small and medium enterprises to 
growth in the gross domestic product of sub-Saha-
ran African countries by proportion declined from an 
average of 14 percent in the 1970s, to 13 percent 
in the 1980s, and to 12 percent in the first half of 
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the 1990s, while during the same period, the propor-
tion of gross domestic product investment by small 
and medium enterprises in other developing regions 
increased. 
(7) Many retail banks avoid lending to small 
and medium enterprises in sub-Saharan African 
countries or engage in predatory lending practices, 
considering such small and medium enterprises as 
presenting a high credit default risk and as costly to 
administer, and instead concentrate on providing 
credit to larger local or international firms or on 
holding high-yield government bonds. 
(8) This approach harms the prospects for sus-
tainable private sector development by ignoring the 
necessity of a bottom-up capital formation—a key 
factor in creating jobs which is necessary to reduce 
poverty and income inequalities. 
(9) Governments of sub-Saharan African coun-
tries must develop the fiscal policies, economic insti-
tutions, legal frameworks, labor market protections, 
commercial infrastructures, and lending practices to 
create and manage competitive business environ-
ments for investors in small and medium enterprises 
in sub-Saharan African countries. Further, small 
and medium enterprises in sub-Saharan African 
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countries must acquire the business skills, expertise, 
and capital financing necessary to manage successful 
businesses. 
(10) The innovative trade capacity building ef-
forts underway with African nations through the 
United States Agency for International Develop-
ment’s Regional Trade Hubs enable African econo-
mies to become better integrated into regional and 
global markets to take advantage of trade opportuni-
ties afforded by the African Growth and Opportunity 
Act (19 U.S.C. 3701 et seq.). These efforts can be 
further augmented by providing technical assistance 
to small and medium enterprises, to help diversify 
and grow the economies of sub-Saharan Africa. 
(11) The experience of United States private 
volunteer organizations shows that deliberately tar-
geting the capacity of small and medium enterprises, 
including farmers’ cooperatives and rural businesses, 
to access and participate in local, national, and re-
gional markets effectively builds the capacity of 
small and medium enterprises to participate in ex-
port markets. 
(12) A World Bank study estimates that coun-
tries chiefly exporting a single commodity, such as 
oil, may be 22 times more likely have a civil war 
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break out than a country with a diverse mix of ex-
ports. 
(13) By the year 2015, it is estimated that 25 
percent of United States oil imports will originate in 
sub-Saharan Africa, making the political and eco-
nomic stability of the region of paramount impor-
tance to United States national security. Recent in-
cidents of violence and the recurrent disruption of 
oil production, including, for example, in the Niger 
Delta of Nigeria, highlight the need to work closely 
with local communities to create jobs and spread the 
benefits of the global economy to local residents. 
Many oil corporations have established local content 
programs to provide contracting opportunities to in-
digenous business leaders, but many of these busi-
ness people lack the skills necessary to benefit from 
the highly profitable business projects available to 
them. 
SEC. 3. SENSE OF CONGRESS; DECLARATION OF POLICY. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that in an increasingly competitive global environ-
ment driven by transformations in technology, commu-
nications, transportation, finance, production, labor mar-
kets, sub-Saharan African countries should develop a 
strong and diverse private sector, particularly small and 
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medium enterprises, to be full participants in the global 
economy. 
(b) DECLARATION OF POLICY.—It shall be the policy 
of the Government of the United States to make available 
for private sector development in sub-Saharan African 
countries professional, technical, and other resources for 
capacity-building for retail banks and small and medium 
enterprises, including farmers’ cooperatives and busi-
nesses, to promote entrepreneurship and economic and ex-
port diversification, to expand the formal sector, and to 
increase trade under the African Growth and Opportunity 
Act (19 U.S.C. 3701 et seq.) of exports from Africa to 
the United States and trade among sub-Saharan African 
countries. 
SEC. 4. AFRICAN ECONOMIC DIVERSIFICATION FINANCING 
RATE. 
(a) IN GENERAL.—Subsection (c) of section 4611 of 
the Internal Revenue Code of 1986 is amended— 
(1) in paragraph (1), by striking ‘‘and’’ in sub-
paragraph (A), by striking the period and inserting 
‘‘, and’’ in subparagraph (B), and by adding at the 
end the following new subparagraph: 
‘‘(C) the African Economic Diversification 
Fund financing rate.’’, and 
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(2) in paragraph (2), by striking ‘‘and’’ in sub-
paragraph (A), by striking the period and inserting 
‘‘, and’’ in subparagraph (B), and by adding at the 
end the following new subparagraph: 
‘‘(C) the African Economic Diversification 
Fund financing rate is, with respect to a petro-
leum product, the column 1 general rate of duty 
under the Harmonized Tariff Schedule of the 
United States that applies to such petroleum 
product.’’. 
(b) APPLICATION OF AFRICAN ECONOMIC DIVER-
SIFICATION FUND FINANCING RATE.—Section 4611 of 
such Code (relating to environmental tax on petroleum) 
is amended by adding at the end the following new sub-
section: 
‘‘(g) APPLICATION OF AFRICAN ECONOMIC DIVER-
SIFICATION FUND FINANCING RATE.— 
‘‘(1) IN GENERAL.—The African Economic Di-
versification Fund financing rate shall apply only to 
petroleum products entered into the United States 
directly from a beneficiary sub-Saharan African 
country described in section 506A(c) of the Trade 
Act of 1974. 
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‘‘(2) TERMINATION.—The African Economic 
Diversification Fund financing rate shall not apply 
after December 31, 2011.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 5. AFRICAN ECONOMIC DIVERSIFICATION FUND. 
(a) CREATION OF TRUST FUND.—Subchapter A of 
chapter 98 of the Internal Revenue Code of 1986 is 
amended by inserting at the end the following new section: 
‘‘SEC. 9511. AFRICAN ECONOMIC DIVERSIFICATION FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the ‘African Economic Diversification 
Fund’, consisting of such amounts as may be appropriated 
or credited to the African Economic Diversification Fund. 
‘‘(b) TRANSFER
OF CERTAIN TAXES.—There are 
hereby appropriated to the African Economic Diversifica-
tion Fund amounts equivalent to the taxes received in the 
Treasury under section 4611 (relating to environmental 
tax on petroleum) to the extent attributable to the African 
Economic Diversification Fund financing rate under sec-
tion 4611(c). 
‘‘(c) EXPENDITURES.—Amounts in the African Eco-
nomic Diversification Fund shall be available, as provided 
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by appropriation Acts, only for purposes of making the 
following expenditures— 
‘‘(1) DEPARTMENT
OF
AGRICULTURE.—Ex-
penditures related to personnel and technical assist-
ance provided by the Secretary of Agriculture, 
through the Foreign Agriculture Service, for the 
purpose of— 
‘‘(A) developing and facilitating value- 
added agricultural processing activities, as de-
termined by the Secretary of Agriculture, in 
qualified sub-Saharan African countries, 
‘‘(B) developing a comprehensive plan for 
the expansion and diversification of agricultural 
trade between qualified sub-Saharan African 
countries and the United States under the Afri-
can Growth and Opportunity Act and among 
sub-Saharan African countries, 
‘‘(C) arranging trade and investment mis-
sions to qualified sub-Saharan African countries 
to generate joint venture investment and joint 
venture marketing agreements between farmers 
in the United States and qualified sub-Saharan 
African countries, and 
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‘‘(D) improving market access for United 
States agricultural products and equipment in 
qualified sub-Saharan African countries by— 
‘‘(i) strengthening the capacity of ag-
ricultural producer organizations in quali-
fied sub-Saharan African countries to iden-
tify agricultural equipment and supply 
needs, 
‘‘(ii) working with United States fi-
nancial institutions to increase the number 
of such financial institutions that cooper-
ate with the Supplier Credit Guarantee 
Program, 
‘‘(iii) working with financial institu-
tions in qualified sub-Saharan African 
countries to remove obstacles that inhibit 
fuller implementation of the Export Credit 
Guarantee and Intermediate Export Credit 
Guarantee programs, and 
‘‘(iv) facilitating access for ports of 
entry and warehouse facilities in qualified 
sub-Saharan African countries to the Fa-
cilities Guarantee Program. 
‘‘(2) SMALL BUSINESS ADMINISTRATION.—Ex-
penditures related to carrying out the 21st Century 
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