As the days approach for President Donald Trump’s inauguration on January 20, 2025, it is becoming increasingly clear what the US economic policies under his leadership might include. The creation of the Department of Government Efficiency (DOGE), headed by Elon Musk, has sparked debates about cutting government spending and fighting waste. Among those proposals is a suggestion by DOGE advisor Ron Paul that foreign aid should be “eliminated.” This proposal is based on the argument that such aid takes money from the poor and middle class of the United States and benefits the elites of developing countries—a claim that, while overly simplistic, is not entirely unfounded.

For African nations, where dependence on foreign aid, especially from the United States, is high, this proposal is a major game-changer. While some analysts dismiss the possibility of a complete withdrawal of such aid as unlikely, the reality is that African governments should prepare for significant cuts. The Trump era has taught us one key lesson: “Never say never.”

Foreign Aid Conflict:

Ron Paul’s argument echoes criticisms of foreign aid as a tool that often benefits domestic elites rather than empowering the masses. For decades, African nations have relied on foreign aid to fund critical sectors such as health, education, and infrastructure. If the Trump administration were to significantly reduce aid, it would force many African governments to rethink their fiscal strategies. Such changes could expose the vulnerabilities of systems that rely heavily on foreign funding, and push governments to seek alternative sources of revenue.

In addition, the likelihood of U.S. resources being directed toward projects that provide clear benefits to U.S. investment will increase under Trump. Programs like Prosper Africa, which focus on private-sector-led partnerships rather than traditional aid, could continue. However, these programs are designed to serve U.S. interests first, which will require African governments to demonstrate measurable economic value in their engagement with the United States.

Trade Wars and Their Impact:

President Trump’s second term is expected to reignite global trade tensions, particularly with China. While the direct targets of the trade war may not include African nations, the continent will certainly feel the effects. Inflation in the United States, caused by trade restrictions, could lead to higher interest rates as the Federal Reserve tries to stabilize the economy. This poses a major challenge for African countries, many of which rely heavily on the US dollar to service their growing debt. Rising borrowing costs could add to financial pressures, leading to economic instability.

Moreover, Trump’s proposal to impose a 10 percent tariff and income tax on all imported goods would disrupt trade flows. The African Growth and Opportunity Act (AGOA), the cornerstone of the U.S.-Africa trade relationship, has already been extended for just one year instead of the usual ten years, reflecting a shift in U.S. trade policies. African countries should prepare for a post-AGOA era, where access to U.S. markets will require bilateral negotiations under non-preferential terms.

Preparing for the “Entrepreneur” Economy

The Trump administration’s trade-friendly approach requires practical responses from African governments. Countries that can provide economic or security benefits to the United States, such as Kenya or the Democratic Republic of Congo, stand a greater chance of securing preferential deals. To address this environment, African nations must adopt a business-oriented approach, presenting themselves as partners that can deliver measurable investment benefits.

These changes require African governments to rethink their economic strategies. Long-term reliance on traditional aid is unsustainable and leaves countries vulnerable to external political changes. Instead, African countries should focus on developing strong and self-reliant economies that can withstand external shocks. This includes improving domestic revenue collection, improving public financial management, and creating an enabling environment for private sector growth.

Regional Cooperation: A Key Path to Economic Freedom and Resilience:

One of the most important steps African governments can take to prepare for the Trump economy is to strengthen regional cooperation. The African Continental Free Trade Area (AfCFTA), which promises to create a $3 trillion market, offers a unique opportunity for the continent to reduce its dependence on external partners. By implementing the AfCFTA quickly and effectively, African countries can unlock the full potential of intra-African trade and investment.

Regional cooperation offers several benefits. It helps countries diversify their trading partners, reducing their vulnerability to external shocks. It also stimulates industrialization, making African firms more competitive in the global marketplace. In addition, a strong and united Africa is better placed to negotiate favorable terms with external powers, including the United States.

Rethinking Africa-US Relations:

While Trump’s policies may seem counterintuitive at first, they also provide an opportunity for African governments to rethink their relationship with the United States. Rather than viewing the United States solely as a source of aid, African nations should engage with the United States as a strategic partner. This requires identifying areas of mutual interest, such as energy, technology, and infrastructure, where cooperation can bring benefits to both sides.

Programs like Prosper Africa show that there is still room for productive cooperation, provided African nations can align their priorities with U.S. economic and security interests. By taking a business-oriented approach, African governments can emerge as valuable partners in advancing U.S. global goals while ensuring investments that advance domestic development.

The Way Forward:

The Trump economy presents both challenges and opportunities for African governments. The potential for reductions or elimination of US foreign aid underscores the importance of building self-reliant economies. Trade tensions and the decline of trade agreements like AGOA underscore the need for African nations to diversify their economic partners and strengthen regional cooperation.

Ultimately, the long-term solution to Africa's economic challenges lies in its ability to harness its abundant natural resources and human capital. By strengthening regional cooperation, implementing the AfCFTA, and engaging with external partners on an equal footing, African nations can pave the way for sustainable development.

In this new global environment, the winners will be those who adapt quickly and wisely. African governments must take deliberate steps to prepare for the unexpected circumstances of the Trump era, turn challenges into opportunities, and ensure that the continent’s economic future is in its own hands.

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