Trump’s Potential Impact on Africa: A Second Term

As the US presidential election approaches, investors and African policymakers are assessing the potential implications of a second Trump presidency on the continent. Despite the challenges, there may still be opportunities for African countries to navigate the complex geostrategic landscape and emerge as winners.

Economically, Trump’s "Trumponomics" has three contradictory tenets. Protectionist and nationalistic impulses will dominate, leading to a potential trade war and disruptions to global supply chains. Laissez-faire economics, which stimulated growth in his first term, may not be repeated due to the country’s changed debt position. Monetary policy independence will also come under scrutiny, with Trump’s interference potentially undermining the Federal Reserve’s credibility.

Geopolitically, Trump’s ideas remain consistent with his first term, including isolationism, authoritarianism, and nativism. This could lead to an insular approach, antagonizing historical allies and making it harder to rally support against China and Russia. Climate change and global governance may also suffer, with Trump potentially withdrawing from the Paris Agreement and advocating for increased fossil fuel production.

So, what does this mean for Africa? Economically, the contagion from high inflation, dollar strength, trade friction, and a more insular outlook could have negative effects on the global economy, raising debt servicing costs and leading to bond yields, currency weakness, and rising cost pressures. Trade-wise, African states may be caught in the crossfire of an escalating trade war, with potential growth-dampening effects and disruptions to supply chains.

However, there may still be opportunities for African countries to succeed. Countries with a commercial mindset, such as Kenya, that can offer the US a return on investment and align with the US’ economic and security priorities, like the Democratic Republic of the Congo, will likely thrive. African states can only control what they can, and the winners will be those that pragmatically play to Trump’s ego and self-proclaimed dealmaker status.

In conclusion, a second Trump presidency will likely have significant implications for Africa, both economically and geopolitically. While there may be challenges, there are also opportunities for African countries to navigate the complex landscape and emerge as winners.