5657094847_91936ce2a2_z.jpgEconomy Elections & Institutions 

The New U.S. President and African Trade

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By Mitchell Prather

During the 2016 presidential primaries, while the United States media has been obsessed with who said what to Megyn Kelly, the world has looked on with amusement at Republican Party infighting. Those of us in Africa, however, have been wondering what the outcome of this election might mean for the continent. Will Trump put up trade barriers to shore up jobs at home? Will he reduce foreign aid? What about his approach to climate change? Will Clinton approach foreign affairs differently as president than she did as secretary of state?

Trump has been quoted on record as saying, “It is necessary that we invest in our infrastructure, and stop sending foreign aid to countries that hate us.” This is perhaps good news for Africa, as these countries don’t have a reputation of hating America. Trump clearly has strong views on China and continues to flip-flop on policy issues such as sending aid to the Middle East. From an African perspective, this may be perhaps a case of “no news is good news,” as the region often stays below the political radar.

U.S.-African relations are complex and mutually beneficial, a reality that has not gone unnoticed by the Republican Party. In February, President Obama signed the Electrify Africa Act of 2015, which establishes a comprehensive U.S. policy to improve access to affordable and reliable electricity in sub-Saharan Africa for at least 50 million people by 2020.

Why is this important? Whoever enters the White House in 2017 will quickly come to understand that this bill, like many others, provides American companies with opportunities for investment. Widening access to electricity for 50 million people means American companies like General Electric have opportunities for engaging in major infrastructure development, shipping their expertise and equipment, creating jobs back home, and receiving huge investment returns. Of course, the fine details of such policies will almost certainly never be featured in presidential debates.

This bill is exciting in other ways, too. It encourages the president to develop an appropriate mix of electricity sources, including fossil fuels, and to leverage international support for these activities. That means taking U.S. energy expertise to Africa, where companies can have a meaningful, long-term stake in African infrastructure development. Will Trump’s advisors tell him to become more involved in Africa when his rhetoric (so far) has been focused so heavily on “bringing jobs home”? The Obama administration has pursued greater trade with Africa—so a Hillary Clinton presidency would already have the experience and insight to understand the mutual importance of American-African trade.

It might be safe to presume that a President Clinton would understand that a plethora of major American companies already have bases in Africa, using these locations as hubs between the U.S., Europe, and the Middle East. Additionally, a president who already has experience with foreign affairs must surely appreciate that many African countries represent a geographically and economically viable route along the East-West corridor.

American firms also benefit from being able to manufacture in a market with cheaper labor and lower overhead costs. Now, Trump might not like that bit of the equation (he is outspoken when it comes to the impact of cheap labor in Mexico), but a nuanced conversation about the huge capital inflows that will come America’s way may settle his nerves. Good advice from experienced civil servants and an understanding of the major economic benefits of increased trade with Africa would likely be attractive to an experienced businessman such as Trump.

Based on Trump’s business experience, as president he may move quickly to replicate the enormous success of businesses already doing well in Africa. American companies with thriving branches on the continent include Dow Chemicals, General Electric, MasterCard, and Wrigley’s. These Kenyan-based companies were celebrated during President Obama’s visit to the Global Entrepreneurship Summit in 2015. Obama chose Kenya as the country to host the sixth annual summit last year because he understood the increasing importance of American-African trade. He also understood that America has skills, expertise, and equipment that can be beneficial to African countries.

Africa also has a fast-growing youth population and a burgeoning middle class with an appetite for high-quality American goods. The Deloitte Consumer Review, in its report “Africa: A 21st Century View,” states that in 2013 there were over 375 million middle class Africans, a figure it says will rise to over half a billion by 2030. In terms of companies looking to take advantage of this trend, the document says, “Africa is not suffering from a lack of demand but sometimes from a lack of supply.”

Recent statistics from the Office of the United States Trade Representative show that around 120,000 American jobs are directly reliant on American exports to Africa, which have increased fourfold. This is strong evidence greater American-African trade ties will create more jobs for American citizens.

While a Trump presidency might ultimately continue to promote trade with Africa, it may be fair to assume that a Clinton win might be a smoother transition, as she was present when the U.S. government signed the Trade and Investment Framework Agreements with the East African Community in 2008. In 2015 there was a significant uptick in U.S. courting of African trade in the form of a special mission that visited Kenya in late June 2015, led by Secretary of Transportation Anthony Foxx and Assistant Secretary of Commerce for Global Markets Arun Kumar. The delegation included representatives from 14 of America’s biggest companies in the energy, transportation, agriculture, and service sectors. It isn’t a coincidence that trade deals and delegations such as these took place under the Obama administration when Hillary Clinton was the Secretary of State.

We are likely to see business as usual with a Clinton presidency. It’s a safe bet. Indeed, hers may even be an administration that ramps up the American-African trade relationship in response to economic slowdown in China. However, Trump could recognize that sending U.S. companies to Africa is a good strategic move that creates jobs back home. Would Trump surprise us by using his CEO-like approach to embrace and enhance U.S. trade with what is one of the fastest growing regions in the world?

Time will tell. Away from the headlines and sound bites, the next American president will have little choice but to focus on Africa as a major export market and source for U.S. jobs. Whoever sits in the Oval Office will reap the benefits of the growing ties between the U.S. and the African continent—and those are headlines that both the government and the American people will appreciate.

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Mitchell Prather is managing director at Djembe Communications. 

[Photo courtesy of US Army Africa]

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