Top geopolitical trends and risks 2024

November 2024 TFG & Pangea-Risk Monthly Briefing

This research and analysis is provided by PANGEA-RISK and distributed in partnership with Trade Finance Global.

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Trump presidency implications for Africa

The economic nationalism that incoming US President Donald Trump promises will have a varied impact across the African continent. Undoubtedly, 2025 will see new approaches to trade dynamics, development financing, and security partnerships.?

It’s uncertain whether Trump will renew the African Growth and Opportunity Act (AGOA), which expires in 2025. The act provides eligible sub-Saharan African countries with duty-free access to the US market for selected products. Moving away from unexclusive agreements, South Africa, the largest beneficiary of the African Growth and Opportunity Act (AGOA), might risk losing its duty-free access to the US market due to its foreign policy positions regarding Russia and Israel, which some US officials perceive as conflicting with broader American global interests.

The proposed isolationist, “America First” economic strategies could indirectly affect African economies through potential increases in US inflation, driven by factors such as tariff increases, tax reductions, and domestic reshoring efforts. It also suggests potential reductions in foreign aid and a diminished commitment to climate resilience initiatives across the continent; the administration's sceptical stance on climate change could further complicate development and sustainability efforts in African nations.

The security front

Trump's apparent commitment to the Middle East and Ukraine means it’s unnlikely that the US will provide military assistance towards escalating insecurity in the Sahel Region. Perpetrated by insurgent groups under the governance of military juntas in Mali, Niger, and Burkina Faso, diplomatic relations between nations in the region and amongst their Western partners have substantially deteriorated—a trend unlikely to improve under a Trump administration.

In the Middle East, efforts to facilitate Saudi-Israel normalisation would remain a key diplomatic objective. Trump would likely endeavour to incentivise Saudi Arabia through commercial opportunities, arms sales, and targeted security assurances to encourage cooperation with Israel. However, Saudi leaders must navigate pressures concerning Palestinian sovereignty and the contentious issue of Israeli settlement expansion, amongst others.?

Trump's policy towards Iran is anticipated to maintain and potentially escalate the maximum-pressure sanctions regime, with minimal diplomatic engagement. This approach is designed to curtail Iran's economic capabilities, thereby limiting its regional influence, nuclear development prospects, and capacity to support allied militias.

Iran may respond to perceived threats by strategically deploying its regional proxies and advancing its nuclear programme: a confrontational stance could potentially destabilise the already fragile geopolitical balance in the Middle East.

COP29 bringing tensions to the fore

International climate finance negotiations at COP29 in Azerbaijan have revealed tensions between Western countries and emerging economies. Western nations are pressuring China and Saudi Arabia—both still classified as 'developing' economies—to increase their financial contributions to climate initiatives. China is leveraging the G77 group of developing countries to resist these demands, although the G20 has tentatively agreed to redefine 'developing' economy classifications, which could expand the pool of contributing nations.

Despite these negotiations, establishing a New Collective Quantified Goal exceeding $1 trillion annually from 2025 remains challenging. By 20 January 2025, a more comprehensive assessment is expected, aimed at helping members prepare for the potential commercial implications of the incoming administration across Africa, Asia, and the Middle East.

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