The re-election of Donald Trump as US president is likely to have an impact on the South African tech sector, from the point of view of trade, immigration, and global partnerships.
That’s according to local tech analysts ahead of the inauguration of Trump as the 47th president of the US on 20 January.
Trump’s re-selection was marked by significant uncertainty, both in his decision-making processes and the broader implications of his policies.
In his previous term, Trump was known for his unconventional approach to leadership and often bypassed traditional norms, creating unpredictability in domestic and international affairs.
His abrupt decisions, such as withdrawing from the Paris Climate Accord and renegotiating trade agreements, reshaped global alliances but left allies questioning America’s reliability.
Trump has already threatened to impose 100% tariffs and close American markets to Brazil, Russia, India, China, South Africa (BRICS) countries if they abandon the dollar for trade purposes.
Arthur Goldstuck, MD of World Wide Worx, notes that Trump’s re-election could result in stricter US immigration policy, which may reduce the outflow of skilled South African tech practitioners to the US, potentially benefiting the local tech sector by bolstering the SA talent pool.
He adds that an opportunity is also likely to emerge for remote work for US-based tech companies, if Trump’s policies limit migration while enabling virtual collaboration.
“Trade tariffs could see challenges in importing US technology or exporting tech-related products to the US, requiring diversification of both partnerships and products, in particular Africa-focused initiatives.”
According to Goldstuck, restrictions on technology transfer of the kind Trump previously introduced with regard to China could slow down advancements in South Africa's tech sector in emerging fields like artificial intelligence (AI) and quantum technology, but reduced dependence on US tech could also drive South Africa's tech sector to innovate locally, and develop indigenous solutions tailored to African needs.
“All of these impacts feed into the message that I push throughout my book, The Hitchhiker's Guide to AI, in which I argue that innovation in Silicon Valley is driven by opportunity, while across Africa it is driven by need,” he notes.
Increased pressure
For Mark Walker, IDC associate VP of data and analytics in the Middle East, Turkey and Africa region, if the US dollar continues to strengthen and the 10-year US Treasury bonds mature, then this will create pressure on South African organisations’ ICT budgets which are rand-based but calculated on US dollar costs.
“Furthermore, US isolationism and blacklisting of Chinese companies will have a knock-on effect on South African companies such as Naspers,” says Walker.
“On the positive side, South Africa already has strong relations with other BRICS countries, which are, in turn, ramping up their exposure in the local markets – expect Chinese ICT manufacturers and Indian IT Services suppliers to double down.”
Ofentse Dazela, director of pricing research at Africa Analysis, observes that Trump's administration has been characterised by trade tensions with major economies, notably China.
“Escalating US-China trade disputes could disrupt global supply chains and affect the availability and pricing of ICT components and technologies. Given that South Africa imports a significant portion of its ICT hardware, any global trade disruptions could lead to increased costs and supply shortages, impacting the local ICT sector's operations and profitability,” says Dazela.
Dobek Pater, director of business development at Africa Analysis, comments that the impact of incoming Trump on the SA tech sector will ultimately depend on the policies that the US government pursues under his presidency.
“In general, Trump has become very supportive of the tech sector and innovation. This may have a positive impact on stronger tech growth globally, including South Africa,” says Peter.
“As seen with the example of discussions between president Ramaphosa and Elon Musk, the US government may wish to engage with the SA government in broader discussions to expand co-operation, including the tech sector.”
Starlink possibility
Pater believes that once Starlink becomes legally available in SA, it will probably open up greater possibility to connect everyone to better quality broadband services.
“Bandwidth from Starlink connections could be reticulated in rural areas. With increasing broadband connectivity, the demand for e-services and tech products would grow in SA. However, this is a process that will take more than a year,” he states.
“If Trump pursues the tariffs route and decides to punish SA for the government’s often anti-US stance in the global public domain, then the SA tech sector could be negatively impacted through more expensive access to the US market for sales, and lower level of co-operation with US firms.”
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