Trump: The real work begins now, will Africa feature? - CNBC Africa

Trump: The real work begins now, will Africa feature?

Financial

by Chris Gilmour, Investment Analyst, Barclays Wealth & Investment Management 0

Photo: Shutterstock

So here we have it; Donald Trump is the US President-elect and will be inaugurated in Washington DC on Friday January 20 2017. Against all odds, he not only secured the Republican nomination earlier this year but also defeated Democratic stalwart Hillary Rodham Clinton.

In itself it is an extraordinary feat but for someone from outside the political establishment, it seemed to be virtually impossible. But now the real work begins and he will be tested to the limit in his capacity as the most powerful person on the planet.

And that is probably the key to Trump’s success; his unique brand of obnoxious, politically incorrect and anti-establishment rhetoric obviously appealed to the marginalized in American society i.e. the former steelworkers in the so-called “rust-belt” states whose jobs have long ago migrated to China and elsewhere. It wasn’t difficult to identify them on international news feeds, as they were only too happy to be seen in public supporting their hero.

This perhaps disguised a different type of voter; the “closet Trump voter”- the voter who was ashamed to admit in public that he or she supported Trump and yet in the privacy of the ballot box were only too happy to draw their cross against his name.

There is precedent for this type of behaviour, first of all in the UK General Election of 2015, when Conservative Party supporters obviously felt stigmatised by voicing their support for the Conservative Party in opinion polls and secondly in the “Brexit” referendum in Britain in June 2016, when the Leave voters hid their light under a bushel for fear of being victimized for even suggesting leaving the European Union. In both instances, the opinion polls got it horribly wrong and the seeming underdogs won. As they did, with Donald Trump.

But Trump now inherits a huge responsibility, one that he may not be prepared for. His attention will have to be directed first and foremost with an inward focus to the deeply fractured American society. The country is hugely divided and a deep healing process will be required in order to get the buy-in of the majority of the population. That will take time.

He has promised a lot and it is doubtful whether many of his outrageous proposals such as erecting a wall between the US and Mexico, or immediately banning immigration of Muslims into the USA, will ever be accomplished. But he has to tread a very difficult path here, as many people voted for just such things, as horrendous, distasteful and impractical as they are. Once again, it will take time to please this segment of the population.

One of the most positive, albeit expensive exercises on which his administration will need to embark on is a wholesale rejuvenation of the creaking infrastructure in the US. Trump raised this issue in the election campaign, highlighting how shameful American airports appear alongside their emerging economy peers. Of course this may be difficult to achieve against a backdrop of a debt to GDP ratio approaching 120%.

Trump will need to surround himself with advisors who have a good track record and the will to begin implementing policies that make sense. Foreign policy will be one of his biggest challenges and like his predecessors in the White House, he will be given precious little time to prepare.

This leaves Africa.

The African continent has been struggling economically in the past year or so, with growth having come tumbling down from 6% forecast in 2014 to the current forecast of 1.5%. It will not be surprising, given the other pressing, mainly domestic issues which Trump will have to address in his first couple of years, if Africa slides to the very back burner.

Financial markets and emerging market currencies plummeted on the realisation of a Trump victory but have rebounded quickly. These are some of the best barometers of what may or may not happen as a direct result of political events.

Most people on Wednesday 9 November were walking around in utter disbelief on hearing the news of Trump’s victory. It is perhaps reflective of our rapidly evolving world that change is our only constant.

Donald Trump is an unknown quantity…a maverick…and somebody who appears to have the potential to do some really stupid things. But this may not necessarily be the case if sanity prevails. We also sometimes forget how little real power is vested in the office of the President of the US. There are many checks and balances embedded in the American constitution and the latitude for a manic to “press the nuclear button” is, in fact, limited.

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