Bright prospects ahead with Biden – analysts
By Hilary Mare
ECONOMIC analysts have expressed optimism at the future economic prospects of Namibia when projected President-Elect of the United States of America, Joe Biden takes over the reins from Donald Trump early next year.
Biden won more than 73 million votes, the most ever for a US presidential candidate.
It is not just the USA that the election of a new president affects – a new leader in the White House can transform the country’s foreign policy and its approach to its friends and foes alike.
In this light and speaking to Confidente this week, economic analyst and managing director of Twilight Capital, Mally Likukela said that the Trump administration polarised the world and Africa was at the worst end of the stick.
“If Biden’s win means a reversal of the Trump administration’s stance on the world, then it’s a good thing for Africa and Namibia. We shouldn’t read too much into the reaction of the financial markets upon the news of a new president- such reactions are usually on the surface, the fundamental factors have not yet moved or changed.
“In terms of trade, the Biden win is a welcome development because it promises of a return to global engagement of the USA – something that could spur global trade and benefit small countries such as Namibia,” he said further stating that Biden’s promise to return the US into global engagement is also welcome because it could mean the continued support to humanitarian causes which Trump wanted to abandon.
Echoing these sentiments, another economic analyst, Klaus Schade highlighted that a possible Biden presidency will look positively different from the Trump presidency, at least in tone and style.
“Biden is expected to revive the US’ participation in multilateral organisations such as the WHO, the Paris Accord and play a constructive role in the WTO, which all will create a more conducive environment for global cooperation, trade investment and environmental protection.
“It is certainly advisable for the Namibian government and SACU at large to engage pro-actively with the US administration to explore areas of cooperation and increase investment and trade,” he said.
Schade also noted that it is expected that a Biden presidency will try to reduce trade tensions with China and the EU, which again would support a global economic recovery.
“The African Growth and Opportunity Act (AGOA) expires in 2025, but it remains to be seen whether the US is going to extend it once again or whether it will end. Namibia does benefit from AGOA for the beef exports, but otherwise we have not really exploited this opportunity.
“Other US support programmes such as PEPFAR have continued under Trump and are expected to continue further. Again, we do not yet know whether the US will try to curb the Chinese influence in Africa through a stronger engagement and investment on the continent. The prospects of the Africa Continental Free Trade Agreement, although it will take time to implement the tariff reductions and other parts, could provide incentives to invest on the continent,” extended Schade.
The rand hit a more than eight-month high against the dollar on Monday, as markets cheered Joe Biden’s election as the US president on hopes that a calmer White House could boost world commerce and that monetary policy would remain easy.
From R16.40/$ in early trade last week Tuesday, when it slid more than two percent as Trump won the key states of Texas and Florida, the rand ended at R15.58/$ on Friday, the best close since March 4 and 4.1 percent stronger than seven days earlier.
In the same light, the JSE All Share Index surged 2.92 percent to 55 225 points, while the Top40 Index inched up 2.97 percent to 50 762 points. The mining index also rose 2.54 percent to 49 005 points, while the banks index was 1.11 percent higher to 5 675 points. General retailers accelerated 4.07 percent to 4 177 points.