Nigeria’s Response to the Transformation of International Trade
Introduction
The international trade architecture established in the post-World War II era is undergoing its most significant transformation since the Treaty of Westphalia established the principles of state sovereignty that underpinned modern international commerce. This article examines the seismic shifts reshaping global trade: the erosion of multilateral consensus, de-dollarization trends, the emergence of alternative trading blocs, and the rise of new economic powers. It analyzes their implications for Nigeria’s strategic positioning within the African Continental Free Trade Area (AfCFTA).
The analysis concludes that Nigeria faces a critical choice: to either passively adapt to these changes or to assertively lead the institutionalization of AfCFTA as a counterweight to fragmentation, positioning Africa as a coherent bloc in the emerging multipolar trading system. The article recommends urgent policy interventions including the appointment of a dedicated Trade Ambassador, the development of a comprehensive National Trade Policy Framework, and leadership in building supranational AfCFTA institutions modeled on European Union structures.
I. The Unraveling of the Post-War Trade Order
The contemporary international trade system emerged from the ashes of World War II, built upon three foundational pillars: the WTO, the Bretton Woods institutions, and the primacy of the US dollar as the global reserve currency. Today, these foundational pillars lie in tatters.
The WTO faces an existential crisis. Since December 2019, the Appellate Body has been non-functional due to US refusal to approve new appointments[1]. The failure of the Doha Development Round[2] after nearly two decades reflects irreconcilable differences between developed and developing economies. Faced with WTO paralysis, major trading powers have pursued preferential agreements outside the WTO framework, creating overlapping regulatory regimes that fragment rather than integrate global commerce.
Parallel to trade multilateralism’s erosion, the dollar-based international monetary system faces unprecedented challenges. The exclusion of Russian banks from SWIFT following the Ukraine invasion demonstrated that Western-controlled financial infrastructure could be weaponized for geopolitical purposes. This has accelerated efforts by China, Russia, India, and other nations to develop alternative payment systems. China’s digital yuan represents the most advanced central bank digital currency program among major economies. The BRICS bloc has discussed creating common currency or payment systems to settle intra-bloc trade.
New trading configurations are crystallizing around geopolitical alignments. The Regional Comprehensive Economic Partnership[3] creates the world’s largest free trade area, critically including China but excluding the United States. China’s Belt and Road Initiative, with over 150 countries involved and with investments exceeding $1 trillion, effectively constructs a China-centered trading network spanning Eurasia and Africa.
The African Continental Free Trade Area represents the world’s largest free trade area by number of countries, encompassing 54 African Union member states representing 1.3 billion people and combined GDP of $3.4 trillion. Yet implementation remains nascent, with significant challenges including non-tariff barriers, poor infrastructure, and limited institutional capacity.
The fundamental distribution of economic power has shifted dramatically. China’s GDP has grown from $730 billion in 1995 to over $17 trillion today, making it the world’s largest trading nation and the largest trading partner for over 120 countries. The combined GDP of the G7 has declined from 65% of global GDP in 1995 to approximately 43% today.
II. Drivers of Fragmentation
The expectation that economic integration would naturally produce political convergence has proven catastrophically wrong. The United States and China are locked in systemic competition across technological, economic, military, and ideological dimensions. The bipartisan consensus in Washington that China represents a strategic threat, reflected in legislation from the CHIPS Act to export controls on advanced semiconductors, demonstrates that trade policy has been subordinated to geopolitical rivalry.
The Fourth Industrial Revolution creates new dimensions of trade competition that existing international frameworks were not designed to address. The recognition that data represents critical economic and strategic value has produced divergent regulatory frameworks, from China’s data localization requirements to the EU’s GDPR to American reliance on private sector data governance. These incompatible frameworks fragment the digital economy.
While globalization produced aggregate wealth gains, its distributional consequences have generated political backlash that constrains continued trade liberalization. The concentration of globalization’s benefits among capital owners, highly educated workers, and residents of major cities, combined with displacement costs borne by manufacturing workers, has produced populist reactions that constrain governments’ ability to pursue further trade liberalization.
The energy transition necessary to address climate change creates new fault lines in international trade. The EU’s Carbon Border Adjustment Mechanism represents a new form of protectionism justified on environmental grounds. The transition to renewable energy and electric vehicles creates intense competition for lithium, cobalt, rare earth elements, and other critical minerals, fragmenting global markets.
III. Nigeria’s Strategic Position: Vulnerabilities and Opportunities
Nigeria’s integration into the fragmenting global trade system reveals significant strategic vulnerabilities. Despite decades of diversification rhetoric, petroleum and gas still account for over 80% of Nigeria’s export earnings and more than 50% of government revenue. The global energy transition threatens to structurally reduce demand for fossil fuels within the timeframe of existing Nigerian oil reserves, potentially creating stranded assets and revenue collapse.
Nigeria imports over 70% of manufactured goods consumed domestically. Manufacturing’s share of GDP has declined from over 10% in the 1980s to approximately 9% today despite population growth. Nigeria’s ranking of 131st out of 190 on the World Bank’s Trading Across Borders index reflects infrastructure deficits, regulatory complexity, and policy unpredictability that deter investment.
However, AfCFTA represents the most significant opportunity for African economic transformation since independence. A single African market of 1.3 billion people and $3.4 trillion GDP provides scale economies necessary for industrialization. A unified African trade bloc would represent credible negotiating weight in global trade discussions. Successful AfCFTA implementation could create millions of formal sector jobs across the continent.
Nigeria’s size, resources, and position create both unique opportunities and special responsibilities within AfCFTA. As Africa’s largest economy and most populous nation, Nigeria’s participation is essential for AfCFTA’s credibility and effectiveness. Early, aggressive implementation of AfCFTA provisions could position Nigerian industries to capture continental market share.
IV. Strategic Imperatives for Nigerian Policy
Institutional Architecture for Trade Policy
Nigeria requires appointment of a dedicated Trade Ambassador reporting directly to the President, with Cabinet rank and clear mandate to provide strategic coordination. This position should chair an inter-ministerial Trade Policy Coordination Committee, lead Nigeria’s negotiations in AfCFTA and bilateral trade discussions, and develop Nigeria’s National Trade Policy Framework.
Nigeria also needs a Trade Policy Analysis Unit to conduct economic modeling of proposed trade agreements, analyze comparative advantages across sectors, and monitor implementation of trade commitments. The country requires a core cadre of trained trade negotiators with expertise in trade law, economics, and negotiation strategy.
National Trade Policy Framework
Nigeria requires a comprehensive National Trade Policy Framework that integrates trade, industrial, fiscal, and monetary policies toward clear economic transformation objectives. Specific, measurable objectives should include: reducing oil export dependence to below 30% of total exports by 2030; increasing manufactured exports to 40% of total exports by 2030; raising intra-African trade to 35% of Nigeria’s total trade by 2030; achieving manufacturing sector contribution of 20% of GDP by 2035; and creating 5 million formal manufacturing jobs by 2030.
Rather than generic trade liberalization, Nigeria needs targeted strategies for sectors with demonstrated or potential comparative advantage: agriculture and agro-processing, textiles and garments, pharmaceuticals, and digital services including fintech, e-commerce, and creative industries.
Trade Facilitation Infrastructure
Nigeria’s ranking of 131st in Trading Across Borders reflects structural impediments that undermine competitiveness. Essential reforms include port modernization with 24-hour operations and reduced cargo clearance times from current 20+ days to under 5 days, implementation of Single Window systems for trade documentation, risk-based customs inspections, and reduction of unofficial payments through digitalization and automation.
Leadership in AfCFTA Institutionalization
Nigeria must move from reluctant participant to assertive leader in building AfCFTA institutions. The establishment of the African Energy Bank demonstrates that African countries can mobilize resources to create specialized financial institutions. However, more must be done to build the full institutional ecosystem necessary for functional continental integration.
Nigeria should champion establishment of an AfCFTA Court of Justice with binding jurisdiction, an AfCFTA Trade Facilitation Authority to harmonize customs procedures, an AfCFTA Competition Authority to prevent monopolistic practices, and an AfCFTA Development Finance Mechanism to finance trade-related infrastructure and productive capacity development. The AfCFTA Court of Justice should be structured to complement the African Court of Justice and Human Rights, ensuring that trade disputes with human rights, environmental, or developmental dimensions are adjudicated within a coherent continental legal framework. Nigeria should further advocate for an AfCFTA Arbitration Centre modeled on ICSID and the LCIA, providing a neutral and enforceable mechanism for resolving commercial disputes between Member States, private investors, and state enterprises, while incorporating African customary commercial practices to give the system both global credibility and African legitimacy.
Institutional leadership requires financial commitment through increased contributions to AfCFTA operational budgets, secondment of experienced Nigerian officials to the AfCFTA Secretariat, offers to host AfCFTA institutions in Nigeria, and use of diplomatic capital to build coalitions supporting institutional development.
V. Conclusion
Nigeria, acting alone, cannot emerge as an economic power comparable to China, India, or the European Union. These powers achieved their positions through deliberate construction of regional economic blocs that aggregate market power and negotiate collectively with external partners. China leverages RCEP and the Belt and Road Initiative. India positions itself within BRICS. The European Union exemplifies economic integration through supranational institutions.
Nigeria’s path to genuine economic power lies in leading the construction of robust continental institutions that transform Africa into a coherent economic bloc. This requires strengthening the African Union, the Pan-African Parliament, the African Court of Justice and Human Rights, and the African Commission on Human and Peoples’ Rights, empowering them with binding authority and genuine enforcement mechanisms that coordinate effectively with regional economic communities like ECOWAS, SADC, EAC, and ECCAS.
This is the vision that Kwame Nkrumah articulated at Ghana’s independence and that Muammar Gaddafi pursued through the African Union’s transformation. Both understood that African strength could only emerge through African unity built on institutions, not rhetoric. Nigeria’s historic role in the 21st century is to complete what Nkrumah and Gaddafi began: the construction of a strong, institutionally cohesive Africa capable of defending African interests in a world organized around regional power blocs. This task requires leadership of historic proportions, leadership that transcends narrow national interests to champion continental transformation.
This call is not new, nor exclusively African. The late Reverend Jesse Jackson consistently championed Nigeria’s destiny to lead the continent, recognising that Africa’s global standing required a strong Nigerian anchor. That conviction was most recently affirmed at the highest level of global governance when, on 13 February 2026, UN Secretary-General António Guterres told Vice President Kashim Shettima on the sidelines of the 39th African Union Summit in Addis Ababa that Nigeria is uniquely positioned to lead Africa toward superpower status and backed Nigeria’s bid for a permanent UN Security Council seat.
The window for Nigerian leadership is closing rapidly. As other regions consolidate, as supply chains reconfigure, as standards are established by others, the costs of Africa’s continued fragmentation escalate. Nigeria must lead, not for Nigeria alone, but for Africa. Not through domination, but through institution-building. This is Nigeria’s burden and opportunity. History will judge whether this generation of Nigerian leaders possessed the vision and will to seize it.
Authors
Dr. Olisa Agbakoba SAN
Senior Partner, OAL
Collins Okeke
Partner, OAL