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Trump presidency: What is Africa’s economic future?

The American people, in one of the most shocking U.S elections in mod- ern political history, elected  Donald

  1. Trump to become the 45th pres- ident of the United States, in a stunning upset that reverberated around the world.

The Triumph for Mr. Trump, the brash billionaire real estate developer and for- mer reality television star, has been called

unprecedented and historic – and indeed it was. Neither the media nor political analysts foresaw or predict- ed the chain reaction his campaign would have and how he would shake the foundation of the 2016 election. Regardless, after a polarizing and hard fought campaign; now comes the business of actually running the biggest economy on the planet. As is the case with any change of admin- istration, the US President-elect will try to make good on his campaign promises to the voting public, which are expected to potentially change the way the US relates with the rest

of the world.

Not surprising, some of his sig- nature issues at the heart of his campaign have sparked debate and caused tension around the world and certainly in Africa too. Principally, there has been worry and criticism of how the US foreign policy will look like under Trump’s administration.

The US has a major influence on the globe economically, financially and politically; and it is due to Trump’s “radical plans” that many believe that global markets should prepare for a bumpy ride.

During his campaign he high- lighted that he is keen on making “America great again” by redirecting focus from the global arena and dwell majorly on the American econ- omy, being extremely stringent on immigration laws and deporting illegal immigrants, renegotiating global trade deals he terms as punitive to the  US  economy,  and Wiping out extremism.

Indeed, there is a whole range of relatively outlandish statements that Trump said during his campaign that if they were to come to pass, could create some pretty dramatic business and economic consequenc- es for Africa.

Additionally, because of global- ization – Africa can expect to feel the ripple effects of whatever change in policy or upset to the status quo that will come with the Trump’s presidency. In spite of it all the African Union is convinced that the US President- elect will not change important eco- nomic partnership deals with the continent when he takes office next year.

Speaking on the matter, AU Economic Affairs Commissioner, Anthony Mothae Maruping, says that Africa has many cooperating partners at the moment that could help the continent if Trump reverses any trade agreement.

He  cited the  partnership with Japan through the Tokyo International Conference on African Development (TICAD), the Forum on China-Africa Cooperation (FOCAC),

Africa- Arab league partnerships, among other partnerships with India and Korea. So as the dust settles on the 2016 American presidential election, the question is – Is the US going    to disengage or reengage with the world?

What role will a more inward looking America play in the world and more specifically in Africa. Following Trump’s dismissal of Africa as a region of interest to the US, many across the continent are worried that he will terminate the economic policies and initiatives that benefit the African markets such as power Africa – a President Obama initiative and the African Growth and Opportunity Act

(AGOA), which gives a range of exports from Sub-Saharan Africa including Kenya, duty-free access to the US.

Oil accounts for the majority of shipments under AGOA, not to men- tion the $4 billion in non-oil ship- ments to the US under the program

– making it a vital economic lifeline for the continent. But how long will a Trump administration maintain this tax-free access to the US markets?

Judging from Trump’s agenda, it is unlikely that such policies favour- ing Africa will be a  top  priority  for the incoming US administration given their negligible impact on US jobs.

With over 96 investment proj- ects in Africa  worth  USD  6.9bn  as  at  2015, the  US  remains  to be the single largest investor in AfricaHowever, as per Trump’s policy, his 7-point plan to rebuild the American economy involves fighting for free trade. This involves withdrawal from the Trans-African partnership and the renegotiation of trade agree- ments to better suit the American worker.

This shift away from openness toward protectionism on a global scale will squeeze trade flows.

Trade is good for growth because it exposes firms to those overseas, lifting competitions and sharpening the incentive to be effi- cient.

Trade also facilitates the exchange of new technologies and best practices.

Growing global trade is therefore very good for lifting productivity, which is the only sustainable source of improving living standards espe- cially in Africa.

Should a Trump presidency see barriers to trade erected, it would make doing business with those abroad more difficult and costlier. It would be a backward step that could act as a drag on potential growth of Africa. In recent years, both China and India have emerged as more important export destinations than the US. Additionally, a large share of agricultural and manufactured goods go to the EU.

As such, if the US imposes tariffs on imports from, say, China, that could have a bigger impact through reduced demand for African com- modities, than any loss of prefer- ential access to the US markets for African countries.

 

Possible Positive Effects

The US emphasises on democracy and proper governance and is known to sever relationships with authori- tarian nations. Due to their influence in the global arena, the US has also imposed sanctions on several coun- tries deemed to be undemocratic.

With regard to Kenya, the US has always been keen on democracy and as witnessed during the 2013 elections, President Obama allowed for the democratic process to prevail

while emphasizing that Kenya had to uphold its international obliga- tions and respect international jus- tice. This pressure meant that the newly elected Kenyan President and his Deputy had to face the ICC and get cleared before the international community.

Trump once said “Look at African countries like Nigeria or Kenya for instance; those people are stealing from their own government and going to invest the money in foreign  countries.

From the government to the opposition, they only qualify to be used as a case study whenever bad examples are required”.

Basing on his statement, in order for the US to even consider collabo- rating with Africa, we will be forced to address graft. This just might be the nudge Africa needs to finally eradicate corruption for good.

 

How Africa Can Engage Trump There is certainly a lot of speculation on what the Trump administration will mean for Africa, but if we are to achieve our goals as a continent then we must find a way to work with the new American administration.

We should not sit and wait to see what Trump has in store for us; instead we should look for ways in which to sustain the relationship that has existed between Africa and America.

We must not behave as though Africa is inconsequential in global affairs – as cliché as it sounds; we have plenty of unrealized potential and value to add to the world.

No matter whom you are as president of the US, in the end you still have to do things that maximize the American global interest. As far as I know; Africa is a very important global interest for the US in terms of trade and as a source of natural resources.

Gradually President Trump will have to come to the  realiza

tion that developing a foreign policy that places Africa in its proper con- text is very important for the success of the US as a global leader.

We as a continent have a role to play in this; in that a lot of knowl- edge will need to be imparted about what Africa is to Donald Trump along with the rest of the world.

Of course he knows Africa, but he might need to get more knowl- edge from a business perspective on what Africa needs and what it has to offer.

This is essentially where we come in. Let us ask ourselves very fundamental questions – how can we as Africa present our case and desires? What value propositions do we bring to the table?

This is not the time to panic rather it is the time to plan on how we can get involved and how we can do business differently to warrant the attention and interest of the US and the world in general.

If we are ready to roll our sleeves and work, then this is an opportune moment to really expose our truth – what we know about Africa and in so doing, finally give our continent a voice.

After all, Mr. Trump is a business man, and six of the fastest growing economies in the world are in Africa. Therefore, he cannot do without Africa; he cannot do without all those groups he alienated during his campaign. I think he remorse- fully showed this on the night of his victory speech where after a dark and grueling campaign, he prom- ised unity. He went ahead to assure the world community that while his government would always put America’s interest first, he expects to have great relationships with other nations and deal fairly with everyone. Irrespective of this rec- onciliatory message, I believe what Africa needs to do, is to prepare for the worst case scenario. This would mean that the Trump  presidency would focus first on American national interest and not necessarily on global interest, and not necessari- ly, therefore on African interests.

Moreover, if there was ever a time that Africa should start thinking of African solutions to African prob- lems, the time is now.

Through all of this, one thing we should keep in mind is that the US has a very strong institutional structure with checks and balances that makes it very difficult for one person to simply come in and change the entire country.

However, as Robert Godec, US Ambassador to Kenya said regarding the matter – in political campaigns, there is always a lot of rhetoric and hyperbole. Now that the elections are through, we just have to wait and see how the campaign-trail rhetoric translates to actual policies.

The article has been contributed by: Martin Dias CEO-FAPCL GROUP Email: md@fapcl.com.