At first glance, the first few months of the second Trump administration appear to be less promising for its involvement with Africa, particularly with efforts to enhance energy access.
A few days after Donald Trump took office in January, he allowed cost-cutting Tsar Elon Musk to place the US International Development Agency “on the Wood Chipper.” Although some humanitarian spending is permitted to continue, Power Africa, a USAID initiative that has helped connect more than 37 million homes to electricity over 12 years, was one of the programs that were unexpectedly xed by the new administration.
Trump has also cancelled US loans for South Africa's Just Energy Transition Partnership. The loan agreed to fund a switch from coal electricity amid a strained relationship with Pretoria. Trump and his allies have amplified conspiracy theories about “genocide” that appear to be happening against the country's white population.
African countries are also lined up to take a major blow to Trump's tariff policies. If these were fully implemented after a 90-day hiatus following the initial tariff announcement in April, Lesotho would be the most intense country in the world. The kingdom of the country that Trump claimed in his speech to Congress that “no one has heard of” has faced 50% tariffs since July unless it can negotiate an exemption.
The photos look dark, but the practical impact that US cuts will have on Africa's efforts to strengthen energy infrastructure is not yet clear. Reductions can even provide the much-needed push for the continent to diversify its funding sources. And the idea that the US is turning away on the continent is not entirely accurate. In fact, many figures in the new administration appear to be eager to remain important players in Africa's energy sector.
Shake x
The idea that the US should support efforts to enhance energy access in Africa was never controversial under previous administrations, even during Trump's first term.
But now, the second Trump administration has introduced “an incredible level of uncertainty,” says Katie Auth, nonprofit energy policy director at the Growth Hub and former executive at USAID and Power Africa. She points to the expected closure of Millennium Challenge Corporation, an independent body that provides grants to countries committed to economic reform programs.
MCC staff were reportedly fired in late April, most of the agency's positions. Similar to USAID, the staffing level at MCC is set to drop to the minimum level permitted by law.
“It is not yet clear what will happen to anyone in Washington, D.C., the US approach to development finance, of course, in Africa,” the approval warns. “You're looking at a lot of project developers, African partners and waiting to see how this unfolds.”
She highlights future decisions regarding the future of the US Development Finance Corporation as an important test of the direction of US policy. The DFC, which was established during the first Trump administration, will require re-approval by Congress later this year. There is bipartisan support to ensure the agency continues, but in fact, the Trump administration wants to expand its role, suggesting that changing the DFC mission could be at a disadvantage for Africa.
“It's not clear whether African countries will become a priority for the Trump administration,” she says. “This is one of the big questions that will become clear as the DFC is reorganized and re-approved later this year. Isn't geopolitical priorities from the US government not necessarily have a direct connection?”
One possibility is that the improved DFC will focus more on investments in key mineral supply chains in Africa. Critical minerals have already been a priority for the DFC under both the first Trump and Biden administrations, with a series of investments to strengthen the infrastructure along the Angola and Dr. Congo's “Lobito Corridor.”
There is also support for the Republican community to turn DFCs into something similar to traditional sovereign wealth funds rather than developmental financial institutions. An executive order signed by Trump in February allows the DFC to invest in key domestic mineral production, suggesting that the agency's focus will move away from emerging markets.
Beyond assistance
As Africa appears to close the energy access gap in the end, US fundraising is not the continent's only headache as the recently launched “Mission 300” initiative sets an ambitious agenda of connecting 300 million people by 2030.
“What we need to meet is not only the gaps left by US programs, but also the potentially significant reduction in public European funding for Africa's renewable energy projects,” said Mostefa Ouki, a senior researcher at the Oxford Energy Institute.
“Private sector funding for energy projects plays a more dominant role, but this is extremely difficult for some African economies that cannot propose bankable energy projects.”
“Recent changes in US and European Development Aid funding and their negative impact on funding for clean energy projects in Africa are another awakening call for African policymakers to undertake appropriate reforms to the energy sector's investment environment and reduce their reliance on reducing development aid.”
“We've been working hard to get the most out of our business,” said Alasdair Maclay, managing director of Impact Invest Firm GSG Impact. “The organization has been reorganised, some organizations have been shut down, some projects have been shut down.”
But McCrae adds that mobilizing funds from within the continent is “more urgency.” He highlights how continental pension funds have traditionally been restricted to a highly conservative strategy for government bond purchases.
Investing in the local stock market. However, many countries are currently in the process of implementing reforms.
Nigerian pension regulators announced last month that they hope to diversify their pension funds into other investments. In particular, we highlighted infrastructure as an asset class that can provide commercially attractive returns over the long term.
Shift Focus
Efforts to attract more private capital from within and outside the continent for energy infrastructure are undoubtedly essential, but it is unlikely that the US will disappear completely from the continent. The White House is planning its first meeting since 2022, the US Africa Summit later this year.
Meanwhile, U.S. Energy Secretary Chris Wright pledged at the March summit that the US will continue to support energy access in Africa, adopt an agnostic approach to technology and be guided by reference to African partners.
One priority could be support for nuclear energy in Africa. Supporters say that small modular reactors, an early technology that allows for nuclear energy to be deployed on a smaller scale than nuclear power plants, are suitable for African countries such as Ghana and Kenya, who are eager to enhance nuclear power generation. US companies are leading the commercialization of SMRS, making this a natural field for US-Africa cooperation.
There are some indications that our enthusiasm for nuclear technology is affecting other fundraising organizations. The World Bank plans to approve changes to its lending rules so that it can support nuclear energy at its Executive Committee next month.
However, Auth is one of the skeptical skeptics that the new administration will prove its support for Africa's renewable energy. “I'm not sure they're really open to all the technology,” she says. Trump “hasn't put much emphasis on renewable transactions as much as previous administrations,” Auth said.
Drills, babes, drills
Other numbers are far more enthusiastic about how Trump and Wright reset their energy relations with Africa.
NJ Ayuk, executive chairman of the African Energy Office, an industry lobby group, argues that USAID's “bigest mistake” is to over-focus on renewables at the expense of other energy sources. “They missed the great opportunity to promote gas development,” he says, highlighting that they can play an important role in addressing the continent's clean cooking issues. “It was a strategic mistake. It was very, very ideological.”
In contrast, he welcomes the Trump administration's much more positive attitude towards fossil fuels. Trump allowed the US Export Transport Bank to reapprove a $4.7 billion loan for a stalled LNG project in Mozambique in March.
Ayuk also praised Wright, who was CEO of the fracking company before his appointment. “I think Chris Wright will fall as the biggest energy secretary the US has ever had. He's more attractive, his team is more attractive, he's embraced Africa more than the US energy secretary I've seen over the last 20 years.”
“We speak in the same language. For Africans today, it's very good to see Western leaders who speak our language.”
