Trump Coming Up Trumps

Donald Trump won the US presidential election which was held on 5 November 2024 and will soon be sworn in as the 47th president of the United States. The US equity markets received this Republican victory remarkably well, while European and Emerging markets were less optimistic and closed down on the day. The election results have however also sparked some questions as to precisely what his presidency will hold for the US and for the rest of the globe.???

During his previous tenure he started investment schemes in Africa such as Prosper Africa which assisted US firms to invest in Africa.? These projects have invested around N$180 billion in Africa to date.? So not all was bad for Africa the first time round, but we could be in for a tough ride based on some of his comments made during his presidential campaign.??

AGOA is the African Growth and Opportunities Act of the US and was inaugurated by former President Bill Clinton in 2000.? The purpose of the act was to allow sub-Saharan African countries access to the US market without charging any tariffs.? Namibia has been part of AGOA which allows Namibia to export some 6,400 Namibian products to America without levying a tariff on it. There are 32 countries in Africa that benefit from this including Namibia, Botswana, Angola, South Africa, Zambia and Mozambique to name but a few.? Some fear that this deal will face significant scrutiny from the upcoming Trump administration, perhaps not immediately, but at the expiration of AGOA next year. One comment that emerged from the Trump camp was a universal 10% levy on all African imported goods.??

Another aspect is the suspension or reduction of aid to Africa. America has already donated more than N$60 billion to Africa this year. But there are concerns that Mr Trump, known to have more of a protectionist outlook, may be inclined to withdraw these commitments.?

Immigration issues have also received its fair share of comments from Mr. Trump.? Last year alone 58,000 migrants were recorded from Africa – people fleeing war, persecution and poverty.? Mr. Trump is expected to put a significant stop to the influx of immigrants from all quarters.?

Mr. Trump's less strict fiscal policy may be regarded by some as inflationary over the longer term. A key input to global inflation is the price of oil, and while US oil producers may be looking forward to less regulations on crude production, Trump has also vowed to put more sanctions on Iranian and Venezuelan oil, which in turn could push up oil prices globally.??

The Fed is likely to continue to reduce interest rates in the US unless inflationary headwinds begin to emerge.? While all is not easy to predict, what is certain is that there will be interesting times ahead.? The US Dollar is likely to become more volatile, due to a combination of a reignition of trade war with China and tougher economic conditions. Economists are still predicting a US recession, which historically triggers stimulus and weakens the US dollar. Trump’s reactions to the current conflicts in the Middle east and Ukraine could either cause massive escalation or peace, only time will tell.?