While Hillary Clinton’s Democrat entourage had champagne bottles chilling on ice, her election campaign turned into a non-event. Shaken analysts had made the grave error of grossly underestimating the support Republican candidate, Donald Trump, was garnering and predicted the wrong outcome.
This has huge implications for Africa and South Africa, with Trump’s foreign policy stance about to turn the ripples into waves of change over the next four years.
This is according to Professor Chris Landsberg, SARChI Chair of African diplomacy and foreign policy at the University of Johannesburg (UJ), and senior associate at the UJ School of Leadership, in his opening remarks at a thought leadership discussion, ‘The Meaning of Trump for Africa’, at the UJ Bunting Road campus on 29 November, 2016, in partnership with Mail & Guardian Africa.
“I think the Trump era is going to be very colourful! He will develop a transactional foreign policy and we know he is a hard-nosed businessman who does not hesitate to fire people. It should be no surprise that there will be changes to foreign policy to ensure it benefits the United States,” continued Landsberg.
He also said that he does not believe the US African Growth and Opportunity Act (AGOA) is “going anywhere” and that he sees a future foreign policy based around defeating terrorism.
Fellow panelist Kuseni Dlamini, chairman of Aspen Pharmacare Holdings Limited, said that he sees this as a great opportunity for African business to do great things and definitely a time for introspection.
“We have always looked to Washington for success and now it is time for risk-taking. Standing on your own is very important,” said Dlamini. “Now have Trump, who does not care about Africa, so we must now look to ourselves. New York, for example, has become even more competitive than before and this requires African leaders to develop competencies and economies.
“Why are we not manufacturing here? The question to our countries is around ‘we welcome you, but what are you going to source from us?’
“It is now an unintended consequence of Trump that it is imperitive we go back to basics and estabish a firm base and a consolidation of African industrialists on a continent level.
“We should also consider that most companies in East Africa, for example, are trading more with the European Union (EU) than with the US. Africa globally is the only regional economy that is trading the least with itself but trading far more with former colonial masters.
“Trump intends building industrial development and go further to conquer global markets. We should be cognisant of the companies buying up other companies, such as India’s TATA buying Jaguar. The Japanese are also acquiring the crème de la crème companies, including those based in the US.
“We also must stop the short-term focus that sees BEE – there is more work to be done,” stressed Dlamini.
He said that AGOA is there as an incentive structure but believe it important to go beyond AGOA and look at how and where to penetrate markets, looking at every sector of the Far East, US, United Kingdom or any other country and have got to be in the US, Japan, China and win there.
“We have to think differently and beyond the obvious, such as in hospitality where we are outstanding. Thinking about how we penetrate the US, South African retailer Steinhoff International Holdings has just facilitated the purchase of Mattress Firm Holding Corporation, the biggest specialty bedding retailer in the United States, for $3.8 billion, which includes debt.
“We need to look at opportunities rather than threats and it is up to us to make ourselves worthy. In terms of politics, we need to build effective lobbying machines in Washington. We can really benefit in the resources space with Trump putting emphasis on infratructure. We have the resources with iron-ore, copper and more. In the commercial space, if Trump delivers on his infrastructure promise — and there is no reason to believe not, the market trusts him to deliver and we have seen that in stocks, including mining, going up.”
Dlamini said the challenge in the mining industry is it being highly competitive worldwide making efficiency and cost-efficiency vital, coupled to environmentally-friendly practices. He also stressed the need to Africa to develop its energy grids in order to be able to meet resource demand and manufacturing targets.
“We also cannot over-emphasise the importance of human capital and need to develop this critical area of importance. We need firm strategies to develop and grow,” conluded Dlamini.
“We are working without a lot of evidence at the moment,” continued Catherine Grant-Makokera, director at Tutwa Consulting Group. “Trump is an unknown, as [are] the personalities he is appointing to set up his administration.
“He has done a lot to talk about trade and investment and aid could see some kind of impact. In the global board game, Africa-US trade and investment is almost negligible in Washington and even that we had to lobby [for],” said Grant-Makokera.
“For the first time, there is now someone who will recognise the bad deals and there is lots of speculation among analysts. Can a president scrap a trade deal? Yes, and the reality is that congress has given away power to the presidency — thus Trump has power to give notice on trade deals.
“My opinion differs on AGOA, which could be seen by Trump as a bad trade deal. Sometimes the US runs a trade deal deficit with South Africa — that is a reality. The red light for me regarding AGOA is that America feels they are getting a far worse deal from Africa now and we are going to see us in a worse-off position in key areas.”
Grant-Makokera said that the US is the world’s third largest exporter and the leading importer and that Trump wants to change exports particularly addressing the US’s value-added tax disadvantage.
“While the WTO is pretty tight legally, this would require permits to partners being dropped. I don’t think we’ll see too much of this, and it can be disputed that [imports] may get busier.
“The relationship between the US and China under a Trump presidency will be interesting. China is pursuing its own trade agreements with more Asian and Asian-Pacific agreements.”
“I think the advent of Donald Trump raises more questions than answers,” said Professor Mzukisi Qobo, expert on South Africa’s political economy and international relations. He emphasised that we need to grapple with “the fact of where the world is going, the meaning of these changes and Donald Trump in the global context, such as Brexit.”
Qobo said that a key issue is how Africa will rise and respond to events as middle-class countries and urged looking at pressing global events.
Qobo characterised the recent climate as one where “there is a crisis of legitimacy of major powers, a crisis of values of countries, a crisis of confidence with powers suffering a crisis of fear and loss of hope especially in a world confronted with elements they cannot control, and there is a crisis of leadership.”
“This is the world we live in. I see little hope that AGOA will survive past 2025 – if it even gets there. Then we see the US generally retreating from Africa, except where there are concerns about security and terrorism.”
Qobo does not seem to see aid cuts as a huge threat, and suggested that aid to healthcare projects may remain unaffected. He said that Africa benefits from a mere 0.2 percent of America’s aid budget. While he believes this may not go up, managing aid may be taken over by NGOs.
“I certainly don’t think that we should be complaining or part of this emerging global whinging about Donald Trump,” he said. “We have behaved as if we are entitled to aid, but if other countries have managed after brutal economics, why can’t we?” he concluded.
Views from the discussion
There was robust discussion on the evening, with some participants
“I disagree when it comes to the notion of decline. The fact is the US has been in decline since 1945, but the sheer size of its economy now [means] it is not the same US in terms of numbers. The US is not declining in all aspects such as its military, which continues to grow. It still commands power to be reckoned with and is the leading global power. I think Trump is showing the world the crux between the elite liberal order that is in serious crisis and Trump represents that decline.” Dr David Monyae, co-director: Confucius Institute, University of Johannesburg.
“We know Trump waged a racist campaign but his bigotry went beyond race. He is a liar and he is in for the next four years unless he is impeached. He is a tribalist and whites have never thought of themselves as an ethnic group — and he does not like civil society, which sets a bad example for Africa. Plus we are all at risk in terms of Trump’s lack of commitment to addressing global warming. He is in environmental denial.” Professor John Stremlau, associate professor, University of the Witwatersrand.
“I think that we are going to see a continuation of counter-terrorism operations and that this won’t change significantly, mainly because there has been bipartisan support and [it is] not seen as an Obama legacy. There would also be a direct health effect if Trump cuts aid.” Sthembile Mbete, PhD candidate in the Department of Political Sciences