Today, Monday, January 20, 2025, Donald Trump will begin a second four-year term as U.S. president after securing a victory in the November 2024 elections.
Having held that position from 2016 to 2020, Trump is no stranger to the White House, but his return marks a critical juncture for global markets and the technology ecosystem, particularly in Africa.
His previous administration was characterised by significant shifts in U.S. domestic and foreign policies, which included the biggest corporate tax cuts in U.S. history, stringent immigration policies, and scepticism about climate change. These elements have the potential to shape the opportunities and challenges facing African startups.
Ahead of his inauguration, Techpoint Africa spoke to venture capitalists and startup founders to gauge their thoughts and expectations for the tech ecosystem.
Immigration policies could limit US-Africa collaboration
Immigration has been a cornerstone of Trump’s political agenda. During his first term, his administration imposed tough restrictions, including a temporary ban on H-1B visas. This time, while Trump has indicated support for skilled immigration, telling the New York Post that he is "a believer in H-1B," his broader stance on immigration suggests a focus on limiting pathways for both legal and illegal migration.
These policies could have profound implications for African startups. Stricter visa requirements may hinder African entrepreneurs from accessing U.S.-based resources, networks, and talent. Romain Diaz, CEO of Satgana, expressed concerns about visa restrictions affecting the ease with which African founders connect with U.S. investors. However, he noted a silver lining:
“The increasing global shift toward remote work and decentralised teams reduces reliance on physical migration, allowing African startups to collaborate with international partners virtually.”
Eghosa Omoigui, General Partner at EchoVC, pointed out that an "America-first" policy could see the U.S. cherry-picking top talent globally to build solutions focused on the domestic market. However, Diaz acknowledged that restrictions might inadvertently encourage African talent to stay on the continent, fuelling local innovation ecosystems.
Given the support Trump received from the tech community during the elections, H-1B visas may not see too many restrictions placed on them. However, should immigration be limited, Amaka Anku, Practice Head, Africa at Eurasia Group, sees its effects negatively impacting remittance to Africa, potentially affecting the startups that have recently set up shop in the sector.
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"If there are visa restrictions, it could [impact remittances], but the only mitigating factor is he's only going to be there for four years. Remittances are a long-term thing. People don't move today and start sending a whole lot of money back. There's basically a settling-in period, and so you're only going to see the impact on remittances from next year if there were to be restrictions, maybe even two years from now."
Corporate tax cuts and VC investments
During his first term, one of Trump’s signature policies was slashing corporate taxes to spur economic growth.
While the immediate benefits largely accrued to U.S.-based businesses, there is potential for ripple effects in Africa. Trump has pledged to extend these tax cuts in his second term, which could increase after-tax profits for U.S. investors and corporations, providing additional liquidity for venture capital at a time when venture capital investments in Africa are dwindling.
“With more capital available and U.S. corporates seeking global expansion, co-investments in African startups could provide strategic expertise alongside funding,” Diaz noted adding that Africa’s maturing ecosystem remains an attractive destination for investors.
However, as Omoigui noted, the flow of capital to African startups may depend more on macroeconomic factors like risk premiums and treasury yields than on tax policies alone.
The uncertainty around climate tech funding
Africa has seen a surge in climate tech funding over the past two years, driven by startups tackling renewable energy, waste management, and electric mobility. In 2024 alone, companies like BasiGO and Spiro raised $42 million and $50 million, respectively.
Trump’s historical stance on climate change, including his withdrawal from the Paris Agreement, raises concerns about whether his administration will prioritise environmental policies. Martin Freimüller, Founder and CEO of Octavia Carbon, acknowledges that a Trump presidency would pose significant challenges for climate tech globally, but adds that U.S.-based companies are likely to feel the greatest impact.
Maelis Carraro, Managing Partner of Catalyst Fund, admitted that this could dampen short-term momentum but remained optimistic about long-term prospects.
“President Trump’s scepticism towards climate change and intent to withdraw from international agreements like the Paris Agreement signal a deprioritization of climate initiatives. However, market demand for sustainable solutions and the global imperative to continue fighting climate change might continue to drive investments in this sector, in the US and Africa, irrespective of federal policies and Trump's disregard of the urgent need for climate action.”
Interestingly, Lee Zeldin, Trump’s pick to lead the Environmental Protection Agency, has acknowledged that climate change is real. This could signal a more nuanced approach to environmental policies different from Trump’s first term.
Anku adds that funding for climate tech initiatives is unlikely to see huge drops, with much of the funding coming from individuals who believe that climate change poses a huge threat.
Looking ahead
The next four years could redefine U.S.-Africa relations. Whether Trump’s policies hinder or foster collaboration remains to be seen, but the resilience and ingenuity of African entrepreneurs suggest they will find ways to thrive regardless of the obstacles.