The American elections literally captured the attention of the entire world last week. Every major news agency diverted a bulk of its resources to giving us a minute by minute progress report of the electoral process in the oldest democracy on earth.
Few in Ghana understood the intricacies of the American Electoral College system, the significance of blue and red states or what it meant to win the house and the senate. Even fewer understood why a presidential election in a country separated from us by an entire ocean was so keenly monitored by our local media.
A super rich business tycoon becoming the 45th president of the USA can’t really affect our way of life as a people, or can it? Actually it can. The global economy is structured such that policy changes in North America can create ripples that travel across the world.
Some of the possible effects we will feel in Ghana as a result of Trump’s victory will be immediate, whiles others will follow later after his inauguration as president on 20th January.
Effects on Gold:
In the first few hours after Donald Trump clinched victory the price of gold rose to $1,337 an ounce, a five percent rise, because investors who feared the worst acquired gold as a safe asset. The price later fell below its pre-election price to $1,278 after he adopted a reconciliatory tone during his acceptance speech and continues to drop.
Trump also promises to spend heavily on infrastructure during his tenure in office. Such heavy spending will lead to inflation and a hike in interest rates. The price of gold is known to drop when interest rates are high hence the fortunes of gold under a Trump presidency aren’t looking good.
Ghana accrued US$3.21 billion dollars from gold exports in 2015 and is well on its way to earn a similar amount this year. A drop in gold prices under a Trump presidency could seriously affect Ghana’s total revenue from 2017 to 2021.
Effects on Remittances from Abroad:
Donald Trump has promised to crack down on all undocumented immigrants in the USA. The United States ambassador to Ghana has already hinted that Ghanaians who have overstayed their visas are likely to be expelled by a Trump regime.
There were 235,000 Ghanaians in the USA as at 2015. Of this amount, there are 3,500 Ghanaians on deportation orders already. It is likely Donald Trump as president will speedily deport these Ghanaians and go after other illegal Ghanaian immigrants as well.
Families in Ghana who depend on remittances from the affected Ghanaian illegal immigrants will lose financially. Also the total amount of dollars sent to Ghana from the USA will drop. In 2012 Ghanaians in the USA sent US$33 million dollars to Ghana.
Effects on Emigration:
During the campaign Trump promised to “keep immigration levels, measured by population share, within historical norms.” To achieve this, it’s estimated that the number of green cards issued will have to be halved. He also hinted at a possible temporal halt to the issuance of green cards.
For the year 2016 6000 Ghanaians were shortlisted out of a million applicants in the 2016 Diversity Immigrant Visa Programme (DV Lottery). Out of this 2,500 have qualified to enter the United States. If Trump tightens the rules, the total number of Ghanaians who get the opportunity to improve their family income by traveling to the USA will reduce.
Effects on Foreign Aid:
Trump alleges that aid given by America to third world countries gets squandered by corrupt governments. Trump also insists the USA needs money at home for internal development; hence he has vowed to drastically reduce American aid to other countries.
The United States gives US$430 million to Ghana annually as aid (statistics from 2013.) Projects in Ghana funded by US Aid are likely to stall if Trump goes ahead to reduce or cut aid starting from next year. The national budget will also take a hit.
In a nut shell, these are the foreseeable effects Trump’s policies can have on the Ghanaian economy. Fortunately Donald Trump has begun to show a willingness to drop some of his more radical plans. We can only hope for the best.